NLJ: Litigation Recession?
The hoped-for litigation surge hasn't materialized, and the fear is that this economy has changed the old rules
What happened to the wave of litigation that was supposed to swamp corporate America in 2009?
A year ago, as the economy began its freefall, corporate law departments were preparing for an all-out assault by plaintiffs. Some 34 percent of in-house counsel polled as part of Fulbright & Jaworski's annual Litigation Trends Survey said they expected to face more suits against their companies in the coming 12 months -- a significantly higher percentage than in the previous year. That result made sense: Recessions usually breed litigation.
The early numbers for this recession are showing something quite different.
A survey of general counsel by Altman Weil in late 2008 found that 75 percent of general counsel had their budgets cut in 2009. The average decrease was 11.5 percent. "It's not down 2 or 3 percent. It's double digits," said Susan Hackett, senior vice president and general counsel for the Association of Corporate Counsel. "They can't afford litigation. There's a real sense of, 'Make this go away quickly and quietly.'"