For Litigators, a Different Kind of 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. Litigation, a number of recent surveys show, isn't really all that more active than it was before the recession. The Hildebrandt International Peer Monitor Economic Index -- a quarterly survey of legal market conditions -- reported in May that demand for litigation services among Am Law 200 firms was flat during the first quarter of 2009 compared with the same period in 2008. A Hildebrandt study released in January found that demand for litigation services in 2008 dropped by 3 percent compared with 2007 -- a result the study's authors called "surprising." Boston-based BTI Consulting Group surveyed general counsel at Fortune 1000 companies in May and found that legal departments on average spent 1 percent less on litigation during the first half of 2009 compared with one year earlier.

Average spending on intellectual property litigation dropped even more, by nearly 8 percent, said BTI President Michael Rynowecer. BTI's findings were in line with recent data from the Stanford Law School IP Litigation Clearinghouse indicating that intellectual property litigation has dropped off. The clearinghouse reported that the total number of patent infringement filings fell by more than 8 percent in 2008 compared with 2007, and the decrease has been steeper so far in 2009.

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Source: law.com
By: Karen Sloan