2008 Legal Department Spending and Staffing Benchmarks

1. 2008 Legal Department Spending and Staffing Benchmarks Customized Report for ACME Co. Preliminary Report: October 9, 2014 www.gcr.executiveboard.com

2. Table of Contents ii

3. Overview of GCR Benchmarking About This Report This report compares your company’s 2007 legal department spending and staffing metrics to those of peer companies. Metrics are shown in US$. GCR performs all survey aggregation and analysis, ensuring the security of the collected data. At your request, a representative from the GCR quantitative research team would be happy to discuss these findings with you and make recommendations for follow up. Please note that this report may contain instances in which certain data are not displayed. This is either because your company did not respond to that question or because the sample size is too small to make a meaningful comparison. To ensure statistical significance and anonymity of respondent data, this report does not display results where there are less than seven applicable company responses. Related Services Hand-Picked Comparisons – You may select a benchmark group of seven or more participating companies with which you would like to be compared for a customized data cut. Please reference the participant listing on page 27 of this report to select your comparison companies. Peer Referral Service – You may nominate other companies to which you would like to be compared. GCR will contact these companies on your behalf. Instant Online Resources – You have access to additional online budgeting and forecasting tools. See the benchmarking section of the GCR member Website, www.gcr.executiveboard.com, for more information. Additional GCR Benchmarking Services Lawyer and Paralegal Compensation Benchmarking See if your department’s compensation practices are in line with peers. Business Alignment Survey Identify gaps in Legal and client perceptions of legal department priorities and performance with this Web-based survey. Outside Counsel Management Benchmarking Compare your company’s outside counsel management practices with those of peers. Send an E-Mail to GCRQuant@executiveboard.com for any additional legal department benchmarking questions. iii

4. What this means: Your reported Total Legal Expenses are roughly in line with the companies in your peer group. Your expenses are above the median and below the third quartile, which means that at least 25% of companies in the peer group have higher expenses. What this means: Your reported Outside Legal Expenses are slightly less then the median for your peer group. This means that more than half of the companies in your peer group have higher outside legal expenses. GCR has extensive resources to help identify opportunities to reduce Outside Counsel costs. Part 1: Executive Summary for ACME Co. 2007 Reported Revenues: US$1,500,000,000 Peer Group for this Executive Summary: Companies with Between US$ 1-3 Billion in Revenues (Comparisons to other companies by industry and by department size appear later in this report.) Total Legal Expenses Reported Total Legal Expenses as a Percentage of Revenues: 0.537% Median Total Legal Expenses for Peer Companies : 0.503% Reported Total Legal Expenses: $8,050,000 Inside Legal Expenses What this means: Reported Inside Legal Expenses as a Percentage of Revenues: 0.255% Median Inside Legal Expenses for Peer Companies : 0.185% Your reported Inside Legal Expenses are higher than the third quartile. This means that 75% of companies in your peer group have lower Inside Legal Expenses. Reported Inside Legal Expenses: $3,975,000 Outside Legal Expenses Reported Outside Legal Expenses as a Percentage of Revenues: 0.272% Median Outside Legal Expenses for Peer Companies : 0.374% Reported Outside Legal Expenses: $4,080,000 1

5. What this means: Your reported number of legal assistants is low. Fewer than 25% of companies have fewer legal assistants per lawyer. Increasing the ratio of legal assistants to lawyers would free up lawyer time and improve overall efficiency. Outside Counsel Hourly Cost What this means: Your reported Outside Counsel Hourly Costs are roughly in line with the companies in your peer group. Your average hourly costs are above the median and below the third quartile, which means that at least 25% of companies in the peer group pay a higher hourly cost. Part 1: Executive Summary for ACME Co. (Continued) 2007 Reported Number of Lawyers: 18 Lawyers per US$B in Revenues Median Number of Lawyers per US$ Billion in Revenues for Peer Companies : 4.35 What this means: Reported Number of Lawyers per US$ Billion in Revenues: 12.00 Your number of lawyers per US$B in revenues are higher than the third quartile. This means that 75% of companies in your peer group have fewer lawyers per US$B in revenues. Legal Assistants per Lawyer Reported Number of Legal Assistants per Lawyer: 0.33 Median Legal Assts. per Lawyer for Peer Companies : 0.43 Reported Number of Legal Assistants: 4 Reported Outside Counsel Hourly Cost: $200 Median Outside Counsel Hourly Cost for Peer Companies: $193 2

6. Part 2: Legal Department Spending Total Legal Expenses (Percentage of Revenues), 2007 Total legal expenses are defined as all inside and outside legal expenses, excluding damages, settlements, fines, and penalties. ■ACME Co.’s value: 0.537% 5

7. Part 2: Legal Department Spending Inside Legal Expenses (Percentage of Revenues), 2007 Inside legal expenses are defined as the subset of total legal expenses not paid to outside service providers such as law firms. Where participants have provided the necessary data, adjustments have been made to reflect differences in department cost allocation practices. ■ACME Co.’s value: 0.255% 6

8. Part 2: Legal Department Spending Breakdown of Inside Legal Expenses The Roundtable defines Inside Expenses as the sum of Legal Salary, Bonus,and Benefits, Legal Overhead, and Legal Technology Expense. To accurately display the proportion of inside expenses that are allocated to each item, on average, companies that did not report on all three of these metrics were excluded from this chart. 7

9. Part 3: Legal Department Staffing Legal Department Size, 2007 The legal department size metric is defined as the sum of lawyers, legal assistants/paralegals, and other staff that work in the legal department. 19

10. Part 3: Legal Department Staffing Number of Lawyers, 2007 ■ ACME Co’s Value: 18 Lawyers

11. Industry Revenue Band (in US$ Billions) Geography Legal Department Size (Number of Lawyers) Appendix B: Survey Respondent Demographics

12. Appendix C: Legal Department Structure (Continued) Senior Executives to Whom the Chief Legal Officer Reports N=139 Non-Legal Functions Falling Within the Chief Legal Officer's Set of Responsibilities N=139