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Litigation costs soar, Fulbright claims

Posted by: Laurence Simons 27/02/13

In-house lawyers had their hands full over the course of 2012 as litigation costs soared and regulatory investigations reached a five-year high, according to a new report from global law firm Fulbright.

After a one-year decline, litigation jumped to 2010 levels as companies on both sides of the Atlantic initiated and faced more lawsuits in 2012 than they did in 2011, the study found.

This has been partly incited by the fact that US firms are facing the toughest regulatory environment they have dealt with since the 1930s, while conditions in the UK are also forcing businesses to keep abreast of a number of litigatory changes.

Otway B Denny, the head of Fulbright's global disputes practice, said: "Ever since the financial crisis, our litigation trends survey has found respondents confronting increased regulatory scrutiny."

With auditors now putting on their white gloves to examine the furniture and kicking off if they find even a speck of dirt, the metaphorical dusting carried out by in-house legal professionals needs to be more thorough than ever.

Some companies are even calling in outside counsel to deal with regulatory issues - 60 per cent of US firms and 72 per cent of UK companies did this at least once over the last 12 months.

"As litigation rebounded in 2012, more companies, particularly in energy, health care, and manufacturing, experienced an increase in government and regulatory investigations," Mr Denny added.

This could be seen as old news now, given that general counsel have been coping with a vast increase in workload and a slight decrease in budget for the last year or more, and soldiering on bravely, only recompensed by an increase in their bonus packages and a more prestigous corporate position (if there's only one complimentary mint left, they get it).

However, Fulbright also indicated that in-house lawyers are unlikely to see any reduction in the amount of regulatory tape they need to wade through in 2013 - on the other hand, the situation is to become even more complex.

Some 92 per cent of respondents to the company's survey predicted that the number of legal disputes their firms will face to rise or stay the same in the next 12 months, while a quarter of US businesses anticipate more regulations to come into place in 2013.

On the bright side, lawyers will soon be replaced by super-intelligent computers and able to pursue their dream of buying a houseboat and selling fresh vegetables from it.