• 1 Increase client satisfaction by demonstrating your mastery of metrics. If you are a relationship partner overseeing a range of matters for a major client, it not only behooves you to grasp and speak fluently about earnings per share, return on assets and other corporate statistics, but also about ratios such as those between inside legal costs and external spending. If comparative metrics matter to inside lawyers, then learning such metrics should matter to you as their external counselor. Client satisfaction interviews suggest that, typically, what general counsel want most is for their outside lawyers to “understand my business.” How better to demonstrate deep knowledge than to be fluent with key business benchmarks?
• 2 Combat pressures on billing rates and push for expansion of work. Everyone in a law firm intimately understands hourly billing rates, but they should have equal facility with the counterpart figure: fully loaded internal costs associated with inside counsel — typically around $200 an hour if all costs are considered in the calculation. Partners should understand what goes into this well-known legal department benchmark, and they should be able to do a back-of-the-envelope calculation for any client that provides them with a few bits of requisite information. All you really need to know is the internal budget and the number of lawyers in the department. If you know these numbers, you can more astutely talk about the differential between your billing rates, i.e., the variable cost to the corporation, and the fixed costs of its inside lawyers. In-house lawyers who have a misconception that you and your colleagues cost two or three times what they cost — a common misperception — will have reason to rethink your contribution.
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