Litigation Trends: Lawyers See “Bet the Company” Cases Increasing

Topics: Business Development & Marketing Blog Posts, Client Relations, Law Firm Profitability, Law Firms, Litigation, Midsize Law Firms Blog Posts

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It’s become old news that demand for litigation services at law firms has been declining for the past several years now; and unfortunately, the first few months of 2016 has done little to reverse that thinking.

On the litigation front, law firms face pressure from both more sophisticated and well-staffed corporate legal departments that are keeping more work in-house, and alternative legal service providers who are taking away the day-to-day legal tasks that are more easily commoditized and automated.

This resulted in overall flat demand for law firm services in the final quarter of last year, and to the dismay of litigation lawyers, it was their practice area that was keeping the damper on demand. For example, litigation demand at AmLaw Second 100 law firms dropped 6.7% in the fourth quarter, according to Thomson Reuters’ Peer Monitor.

But what’s behind these numbers? If you dig into the depth of demand, there are some observable trends that may shine a light on where litigation is heading for the rest of this year and beyond as well as identify areas where firms may find some strength in the litigation practice.


On the litigation front, law firms face pressure from both more sophisticated and well-staffed corporate legal departments that are keeping more work in-house, and alternative legal service providers who are taking away the day-to-day legal tasks that are more easily commoditized and automated.


  • Smaller Litigation Firms Excel — While there has been a strong focus among clients on avoiding litigation through arbitration and being more proactive in avoiding litigation situations altogether, it’s still true that clients will continue to need litigation services. And not surprisingly, much more litigation work has been going to smaller firms that are litigation specialists. According to Thomson Reuters Monitor Suite, about one-third of all litigation matters filed in US federal district courts since 2010 has been handled by small law firms with between two and 15 attorneys, and only 11% was handled by larger firms with more than 250 attorneys.
  • “Bet the Company” Work Increasing — While early demand statistics are showing that 2016 could see the first increase in litigation spending since 2011, overall volume is down, resulting in fewer matters. That means, much of the expected work is high-rate, “bet the company” type of litigation matters. Indeed, such work actually tripled last year and continues to show strong resiliency so far in 2016, according to numbers supplied by BTI Consulting Group. Those firms that can best convey to clients their specialty in handling this type of litigation — by accurately outlining to clients the costs, time and likely outcomes involved in such matters — have the best chance to secure these mandates.
  • Once Hot IP & M&A Litigation May Be Declining — Litigation matters in the Intellectual Property area saw rapid volume growth of almost 20% between 2010 and 2013. In the ensuing two years, however, that volume has declined and is expected to fall again this year, resulting in an expected 6% decline since the end of 2013, which was helped along by some court rulings that have had the result of curbing frivolous lawsuits. On the M&A front, a filing of a lawsuit following the announcement of a merger or acquisition was commonplace. (A stunning 95% of all announced deals had a lawsuit filed on them in 2014.) However, a crackdown on M&A-related litigation by the Delaware court system, where much of US corporate law gets aired, has driven that litigation rate down to 22% in less than two years.
  • Clients Depending on Fewer Law Firms — After years of increasing the number of law firms relied upon for litigation work, corporate clients trimmed their roster by four firms in 2015, according to BTI. That means clients are spreading their legal work out to a smaller number of firms, making each individual legal mandate more value and much more difficult to secure.

The common thread in all these trends, of course, is that demand for law firms’ litigation work is still positive, even as the landscape has changed. Those law firms — large or small — that can best take advantage of the changing landscape by navigating the choppy waters of hyper-competition and evolving client needs will thrive in today’s litigation practice area.