Fulbright & Jaworski 2009 Litigation Trends Survey: U.S. Companies Experiencing New Litigation Wave, Anticipate More To Come.

NEW YORK -- Companies are seeing a litigation wave that corporate counsel expect to swell in the coming year, according to respondents of the 2009 Fulbright & Jaworski L.L.P. Litigation Trends Survey.

Corporate counsel say they are steeling themselves for a big year of litigation with 42% of U.S. respondents anticipating an increase in legal disputes their companies will face in the next 12 months. That is up from 34% of last year's respondents. The expectation comes during a year when 83% of U.S. respondents reported that new litigation has been commenced against their companies in the past year, up from 79% last year.

In the year to come, respondents from large-cap companies reported the highest expectation of litigation, with 52% forecasting an increase in legal disputes, while 47% of public company respondents foresee a jump in disputes. The economy was cited as the primary reason for these expectations by 38% of U.S. respondents and 34% of U.K. respondents.

More than one-third of companies say the economic downturn has resulted not only in an increase in their litigation caseloads, but also their use of alternative fees. Tighter cost control, more than anything else, is the most important way in which the economic crisis has affected litigation management, respondents say.

"Generally, litigation rises in an economic downturn as regulators tend to step up enforcement, laid-off workers head to court and companies need to file more suits in order to collect on money owed," said Stephen C. Dillard, head of Fulbright's global litigation practice. "Perhaps most telling about this year's results is that companies across the spectrum expect no substantial decreases in any area of litigation."

This is the sixth year that Fulbright has polled corporate law departments in the U.S. and U.K. on the state of global litigation. The survey, initially launched by Fulbright in 2004, is the largest canvas of corporate counsel on litigation issues and trends.

Litigation: Where Has it Gone? Where is it Going?

Companies agree on what is bothering them most. From small-cap to large-cap, from private to public, from the U.S. to the U.K., the main problems are the same: In light of the downturn, companies face big increases in bankruptcy, contracts and labor/employment litigation. More modest increases have been cited in intellectual property, insurance and regulatory actions.