In-House Counsel

Rees Morrison?s Morsels #89 ? additions to earlier posts

By Rees Morrison

R&D spending is seven times total legal spending. For the ?Global Innovation 1000,? as defined in an article from strategy + bus., Iss. 53, Winter 2008 at 60, R&D spending as a percentage of sales amounted to 3.7 percent in 2007. Since 0.5 percent is a fairly figure for total legal spending, then the R&D-to-legal spend ratio is about 7.5 to one. These huge companies, with revenues in 2007 of $13.2 trillion, might have had higher legal spending if only because of their technology and innovation intensiveness (See my post of Aug. 21, 2008: total legal spending as a percentage of revenue (TLS/Rev) with 9 references and one metapost; April 6, 2008: benchmark law against other staff groups.).

Pessimism about the efficacy of bonus payments to law firms. A number of my posts have taken up various aspects of law-firm bonuses. I have come to doubt their efficacy. Click here for my article in PDF format.Download 08-08-08 Rees Morrison Bonuses NY LJ

A mathematical step that allows cross-industry comparisons of benchmarks. ?To enable meaningful comparisons across industries, we indexed the R&D spending levels and financial performance metrics of each company against its industry group?s median values.? strategy + bus., Iss. 53, Winter 2008 at 66, explains this step and I think it means to divide each company?s metrics on spend and financial performance by the median figure for their industry group. Doing so would index each company relative to its peers, so all companies share a common measurement (See my post of Jan. 1, 2006: explanation of normalized data.). This step would improve benchmark reports.

In Germany, how the loser in a litigation bears the fees of the other party. In Germany, statutory court and attorney?s fees are fixed by law, and depend on the value of the matter in dispute. This statement comes from Focus Europe, Winter 2009 and an ad by Haarman. In a ?first instance lawsuit of Euro 1,000,000, the court fees are Euro 13,368 and the attorney?s fees are Euro 11,240.? What is most important for law department budgets is that ?Attorney?s fees exceeding the statutory fees are not borne by the losing party? (See my post of Oct. 22, 2005: insurance proceeds in a loser-pays jurisdiction; May 31, 2005: insurance where the loser pays the other side?s fees; May 10, 2006: why US litigation hasn?t spread to Europe; and Aug. 21, 2006: Florida?s experience with loser pays.).

In-house counsel abroad and a tax break. The I.R.S. allows for a foreign earned income exclusion, which means American citizens working abroad who meet certain conditions can get their first $87,600 tax free.? I trust the NY Times, Nov. 23, 2008, at BU 9, completely for tax advice. Sounds like a windfall for ex pats! (See my post of Oct. 10, 2005: ex pats and relo pay; Nov. 8, 2005: ex pats mean more than money; March 13, 2008: high pay for ?international lawyers? may be swelled by ex pat surcharges; April 8, 2007: ex pat benefits; Nov. 16, 2008: five questions to ask about first international posting; June 15, 2008: US companies with significant foreign revenue have many overseas lawyers; and Jan. 11, 2008: reasons to locate a lawyer overseas.).

Full post as published by Law Department Management on January 12, 2009 (boomark / email).