Lawyers who practice business and corporate litigation could be looking at significantly more work in the near future.
That’s because 35 percent of corporate counsel at some of the country’s largest corporations are predicting an uptick in disputes in 2020, according to a recent survey. Just two years ago, only 25 percent of them expected more litigation.
Another finding: corporations may not be doing all they could to mitigate their risk of litigation.
Those are two takeaways from the 2019 Litigation Trends Annual Survey.
“The 15th annual Litigation Trends survey has identified two major trends that began impacting the industry more intensively in 2019 and are predicted to accelerate in 2020,” according to the report, which canvassed 287 corporate counsel. “More organizations than ever before expect dispute volume to rise in the year ahead, and they are putting in place more preventative measures to manage the increased risk. Despite the increase in proactive risk mitigation, the findings show that companies are still underutilizing one of the most effective measures available – embedding lawyers in business operations.”
Read the Executive Summary of the 2019 Litigation Trends Survey here. Read articles about the survey in the ABA Journal and Law360.
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2019 Litigation Trends Survey
“This sharp rise in the litigation forecast should be received by businesses as a major red flag, signaling the need to prepare for potentially turbulent times ahead,” according to the survey’s executive summary.
Two steps corporations can take to lower their litigation risk: (1) embedding lawyers in business operations, and (2) early case evaluation and resolution. Neither has gained significant traction, according to the survey.
Here are some other takeaways:
- Businesses spend an average of $1.5 million on disputes per $1 billion in revenue.
- 45 percent have embedded lawyers inside their business operations in the last year, the same percentage as in 2018.
- 66 percent use early case resolution and evaluation, a dip from 68 percent in 2018.
- 35 percent expect disputes to rise going forward; only nine percent predict dispute volume will drop.
- 38 percent say regulators are becoming more interventionist; 17 percent say they were becoming less so.
- 17 percent expect to increase the size of their in-house legal teams; only two percent plan to cut back.
- Less than 50 percent feel more exposed to cybersecurity and data protection issues; 11 percent feel less exposed.
- 64 percent said an economic downturn tends to increase litigation volume.
- The most popular methods to lower the risk of disputes: training and seminars; proactive review of contracts; and strict internal controls, policies and reporting.
What are the Most Common Disputes?
Labor and employment cases are the most common disputes brought against companies. These have shown a marked increase in volume from 2018 to 2019. IP and patents disputes increased slightly in 2019, as did professional malpractice claims.
Here are the types of litigation respondents said were pending against them in the past 12 months:
- Labor and employment – 49 percent (42 percent in 2018)
- Contracts – 42 percent (41 percent)
- Personal injury – 18 percent (19 percent)
- IP/Patents – 18 percent (15 percent)
- Product liability – 13 percent (12 percent)
- Environmental/toxic tort – 10 percent (8 percent)
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