In-House Litigation Officers Making Do With Shrinking Budgets and Lean Staff

Lisa Shuchman

Corporate Counsel

12-27-2012

As companies face mounting litigation and ever-changing regulations, chief litigation officers are playing an increasingly important role in corporate America. Despite the rise in litigation costs and despite growing concerns about regulations and potential risk, however, the size of their legal staffs is stagnant and the size of their legal budgets is shrinking.

These are some of the findings of the “2012 Chief Litigation Officer Data Survey” [PDF], recently released by Consero. The results are based on 48 responses from attendees of the company’s November 2012 invitation-only Corporate Litigation Forum, held in San Antonio, Texas. While the non-scientific sample is small, the collected data provides insight into the state of the litigation environment at U.S. corporations. All of the survey participants are chief litigation officers at Fortune 1000 companies.

“With the constant threat of litigation and government investigations and regulations, everyone is anticipating more strain and stress,” said Consero’s CEO Paul Mandel, “but no one expects to see an increased investment in litigation overhead.”

According to the survey, 66 percent of participants indicated that their staff size remained unchanged from 2011 to 2012. An estimated 27 percent said their staff size increased, and 7 percent stated that their staff size decreased. The average staff size increased by just over 1 percent, the survey found.

Money, of course, is a key factor in determining how well litigation departments can handle their mounting duties. The surveyed participants had litigation department budgets that ranged from less than $500,000 to more than $100 million. Most respondents said they managed budgets of between $5 million and $50 million, according to the survey.

But with continued concerns about the economy and a trend toward corporate belt-tightening, litigation department budgets are not growing, and many companies are asking their chief litigation officers to do more with less. Only 28 percent of the participants indicated their budget size had increased from 2011 to 2012, compared to 31 percent who said their budgets decreased. The average budget change was a drop of 2.1 percent.

On a more positive note, an overwhelmingly large percentage of chief litigation officers surveyed said they have sufficient access both to the company general counsel and to the CEO. A total of 96 percent of respondents said they had sufficient access to those senior officers, and 86 percent said they report directly to the general counsel.

In addition, the majority of chief litigation officers surveyed—85 percent—indicated they are satisfied with the level of resources available to manage their departments effectively.