Overall, the 57-page 2010 report (once again prepared for Fulbright by Greenwood Surveys) offers relatively good news for outside litigators. The respondents, 275 of whom are from U.S. companies and 128 from U.K. businesses, predict an increase in litigation volume over the coming year: In the U.S., 93 percent of those surveyed expect litigation volume to stay the same or tick upward; 97 percent of the U.K. respondents share that view.
In fact, the survey notes, litigation has actually been on a slow rise since a reported decline in new filings in 2006 and 2007. Last year, 87 percent of the survey’s U.S. respondents faced new litigation, up from 83 percent in 2009. Moreover, 53 percent of all respondents initiated a suit in the last year, up from 48 percent in the preceding survey.
“The results this year versus last show that volume is up,” said Stephen Dillard, the head of Fulbright’s global disputes practice. “It’s not a large uptick, but it’s up.”
Interestingly, for all of the talk of corporate belt-tightening in the economic downturn, the survey indicates that law departments continue to spend heavily on litigation. (The survey included 94 respondents from companies with gross revenue under $100 million; 101 from companies grossing between $100 and $999 million; and 174 respondents from businesses with gross revenue over $1 billion). Twenty-eight percent of all the corporate counsel in the survey said they plan to increase their litigation budgets this year. Only 16 percent reported a planned decrease. Thirty-one percent said they increased litigation spending over the last year; 21 percent said they cut spending.
“The budgets keep going up,” Dillard said. “We see that the matters that are actually filed are more sizable….One big case can cost a lot more than several smaller ones.”
The survey’s most valuable information for outside firms is probably in respondents’ predictions of where they expect to see more litigation. This year, Dillard told us, the smart money should be on regulatory and Foreign Corrupt Practices Act defense, as well as other internal investigations. Although companies in all sectors continue to report that labor and employment and contract litigation comprise a large percentage of their dockets, they’re increasingly likely to turn to outside counsel for all sorts of investigations. (Of U.S. respondents, 43 percent said they’d retained outside counsel for a government investigation in the last year, and fully a third reported that they expect to face an increased number of regulatory proceedings next year.)
“Last year the prediction was that regulatory matters, internal investigations, and FCPA would increase. That’s what happened,” Dillard said. “Regulatory concerns are at the top of the list going forward. They seem to have replaced bankruptcy.” (Twenty-one percent of the respondents overall said they plan to increase spending on regulatory matters; only 13 said they plan to spend more on bankruptcy.)
We asked Dillard why Fulbright ponies up the money to conduct the survey every year. He said the information the firm gets from the corporate respondents (and kindly shares with the rest of us) is worth the investment. “We use it to project where our needs are going to be,” he said. “After last year’s survey we put a lot of resources into our internal investigations and FCPA practices. This year’s results tell us that effort was justified.”
Editor’s note: An earlier version of this story incorrectly reported the total number of respondents and the number of U.K. respondents. We also referred to the report as a 216-page document. The raw data underlying the report does, in fact, comprise 261 pages. But the publicly available report is 57 pages. We regret the errors and confusion.