Morrison on Metrics: Synthetic Indices

What some people call "synthetic indices" combine (synthesize) several related measures into a single number - the index. For example, everyone knows the Consumer Price Index: The aggregated and weighted prices of a basket of common goods and services.

In the law department context, to illustrate, we could envision a synthetic index of "corporate IP prowess," constructed from (1) the number of patents applied for in a year, (2) R&D spending as a percentage of revenue, (3) the number of references in the annual report to innovation and intellectual property, and (4) licensing revenue from patents. For a group of companies, if you could collect those four related measures from each of them, put them on a comparable scale such as deviation from the average, and sum them, you would create an index of corporate IP prowess.

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Rees Morrison

Rees Morrison, Esq. is the founder of General Counsel Metrics, LLC. Based in Princeton, NJ, Rees has for the past 25 years consulted solely to...

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