This issue began with a conundrum. Over the last half-decade the law firms of The Am Law 200 have grown increasingly dependent on revenue from their litigation departments. Once the shabby servants of mighty corporate department masters, litigators have become co-equals-a law firm’s indispensable hedge against economic downturns and a steady source of income even in good times. Over and over, in reporting the 2005 Am Law 200, we heard managing partners attribute their firms’ good fortune to booming litigation practices.

Yet we also heard clients chafing at litigation costs. (And like everyone in America, we heard opportunistic politicians raging at trial lawyers, neglecting to mention that defense lawyers get paid even in cases they don’t win.) Outsourcing and electronic discovery aids, the increased use of paralegals and contract attorneys, corporate consolidation of sprawling dockets: All were supposed to be improving litigation efficiency. So how could law firms still be making so much money from trying cases? Wasn’t there, as Douglas McCollam wonders in “The Future of Time” on page 64, still the eternal question of an inherent conflict between law firms charging by the hour for litigation services and the clients paying for those services?

The short answer is: Not if the client has any sense. In “The Fix Is In” on page 54, Heather Smith analyzes the relationships between three such sophisticated clients and the law firms they’ve selected to handle large chunks of their dockets. Each contract is structured differently, but all three assure that law firms profit by saving their clients money. We also discovered that Am Law 200 firms are learning that they can profit by making their clients money. In “A Piece of the Action” on page 46, Carlyn Kolker writes about a new litigation trend: big firms handling cases-especially intellectual property matters-on contingency. Kolker looks at Baker Botts, a Texas traditionalist that has embraced, cautiously, the risk inherent in contingency billing.

In “The Loan Arrangers” on page 74, we write about a recent development on the other side of contingency-fee cases. There’s now a small but growing industry of litigation venture capitalists-companies that make multimillion-dollar loans to plaintiffs firms, providing them with the financing to pursue litigation they otherwise couldn’t afford. The loans are too risky for conventional banks, but for the savvy among these litigation finance companies-some of which were started by lawyers-the returns justify the danger. Lloyd Constantine, the plaintiffs lawyer who obtained $3 billion in a 2003 antitrust class action settlement with Visa International Service Association and Mastercard Incorporated, didn’t have to resort to such a loan, but as Paul Braverman writes in “A Modest Proposal” on page 162, Constantine’s long wait for his $220 million fee shows why some of his brethren do.

We asked an array of litigators, general counsel, and law professors to put litigation costs under the microscope in sidebars that appear throughout this issue, starting on this page. Such eminent thinkers and practitioners as Dan Webb, Stephen Susman, W. Mark Lanier, Richard Blumenthal, and William Ohlemeyer address the question of why litigation is so expensive and propose ideas that overturning tradition in order to make it less so. Curbing discovery overkill is one obvious solution, but our contributors offer plenty of others.

We also use a telescopic lens to look at the economics of litigation. “A Line in the Sand,” our story about the unmaking of a mass tort, examines the decision of some pharmaceutical defendants to spend more money fighting selected cases than settling them-just to send a message about drug company resolve in the face of a litigation onslaught. It begins on page 24. And on page 34 Matt Fleischer-Black profiles DaimlerChrysler assistant general counsel Steven Hantler, a man devoted to curbing what he considers the excesses of plaintiffs lawyers. Hantler, with his company’s full support, has chosen to make his stand in the courtroom, where DaimlerChrysler has vowed to fight what it deems “frivolous” cases, whatever the cost.

Hantler is among the most ardent of a new generation of tort reformers. Some of their other tactics can be discerned in our charts on page 45, which detail the rising contributions that businesses have made to state supreme court contests. One way or another, Hantler and his fellow true believers are committed to changing the system. Whether it actually needs changing is the question at the heart of Amy Kolz’s story about the debate between two eminent scholars of punitive damages. See “Go Figure” on page 78.

Finally, we offer Andrew Longstreth’s dissection of one of the biggest cases of recent years: The WorldCom securities class action, in which plaintiffs lawyers recovered an astonishing $6.1 billion for investors in the bankrupt company. “Breaking the Banks,” beginning on page 10, is a compelling account of how a coalition of the bluest-chip banks in the country, defended by the bluest-chip law firms, fell apart under the pressure of a relentless opponent. The coalition was said at one point to be paying New York’s Skadden, Arps, Slate, Meagher & Flom more than $10 million a month in the WorldCom case. Did the banks get their money’s worth? Read Longstreth’s story to find out.