Posted Aug 18, 2009 12:22 pm CDT
Litigation usually increases during recessions, but this one appears to be different.
Several surveys show that litigation is flat or declining, the National Law Journal reports. One of the major reasons, the story says, is that general counsel don’t want to spend money on litigation, partly because they fear the increasing cost of electronic discovery.
“Right now, general counsel are trying to operate in zero-risk mode, and this is something we have not seen in many, many years,” said Michael Rynowecer, president of the BTI Consulting Group, in an interview with the publication. A survey of general counsel at Fortune 1000 companies by BTI found that legal departments spent an average of 1 percent less on litigation during the first half of this year.
Elizabeth Scully, a partner at Baker Hostetler experienced in e-discovery, told the NLJ that the discovery process is much more expensive than just a few years ago. “It makes logical sense that the cost associated with e-discovery may be one of the things changing the numbers.”
The article cited this evidence of a declining appetite for litigation:
• New civil filings in federal courts dropped more than 2 percent in fiscal 2008.
• The Hildebrandt International Peer Monitor Economic Index found demand for litigation services in the top 200 law firms was flat in the year’s first quarter.
• An Altman Weil survey late last year found that 75 percent of general counsel faced 2009 budget cuts.