More than one-third of general counsel in a recent survey said the number of legal disputes their companies have been involved in increased during the last 12 months. And only 7 percent said they'd seen a decrease.
The "Litigation and Corporate Compliance Survey," conducted by business consultants AlixPartners, is based on a survey of more than 100 general counsel at companies with annual revenues of $250 million or more, primarily in the United States.
Louis Dudney, managing director at AlixPartners, said in a statement, "General counsel must deal with not only the potential damage that litigation may inflict but also defending these lawsuits, which can be costly and detract from day-to-day activities."
The survey confirms the rising trend reported in February in the "9th Annual Litigation Trends Survey" by the law offices of Fulbright & Jaworski.
And with increased litigation comes higher legal costs reported by most companies in the AlixPartners survey. One in 10 companies said they were involved in a "bet-the-company" lawsuit in the past year.
The good news for in-house lawyers is that some 27 percent of companies said they are increasing the size of their legal departments to help deal with the disputes.
In other findings, the report said:
• A whopping 84 percent of corporate legal departments are trying several ways to lower legal costs, including keeping more work in-house, using alternative fee arrangements, and resorting to alternative dispute resolution.
• Contract and intellectual property disputes were the most common types of legal actions.
• Some 55 percent of respondents said alternative fee arrangements are important.
• Many companies were considering enhanced compliance programs as well as better compliance tools to mitigate risks.
• Some 25 percent of respondents have increased use of outside counsel, especially for mergers and acquisitions and internal investigations.
Dudney concluded, "Litigation and the threats associated with commercial disputes remains a critical issue facing companies and their executives today … [and] can have far-reaching implications for companies and their long-term business objectives."
Sue Reisinger is a reporter for Corporate Counsel, a Legal affiliate based in New York. •