January 24, 2012
For litigation professionals, 2012 is already shaping up to be a year of “more” – more lawsuits, more regulatory investigations, more discovery disputes and more demand for experts in a range of specializations. The one area where “less” will predominate will be in spending, as corporate clients continue efforts to rein in legal spending.
We have no crystal ball, but based on our analysis of trends, we offer these 10 predictions for how litigation will play out over the coming year.
1. Litigation will steadily increase throughout 2012
In 2011, litigation was down slightly, but the majority of companies expect to see more litigation in 2012, according to the annual Fulbright Litigation Trends Survey
. For larger corporations, the most active areas of litigation continue to be labor and employment and contracts, followed closely by intellectual property cases.
2. E-discovery disputes will snowball
No one needs a crystal ball to see that increasingly voluminous mountains of electronic documents in litigation will lead to increasingly voluminous numbers of discovery disputes. Clients are fed up with the costs. Litigators are fed up with the smokescreens and delays, and judges are fed up with abuses of the process. A corollary is that, as the number of e-discovery disputes increase, there will be greater demand for experts in search, statistics, analytics and the like.
3. Regulatory investigations will ramp up
The vast majority of companies expect to come under greater scrutiny from government regulators in 2012, the Fulbright survey reports. The reason they give for this is stricter regulation, not least of which is the so-called Volcker Rule that takes effect in July 2012. Part of Dodd-Frank, the rule places new restrictions on trading by financial institutions.
4. Cloud computing will take off
Cloud computing is already taking off among lawyers for various applications, from law practice management to document storage. Use of the cloud has been further propelled by virtually unanimous ethics rulings from several states endorsing it. In 2012, the cloud will play a much greater role in litigation, especially in e-discovery, because of its scalability, economy and ease of use.
5. Experts in social media will be more in demand
Social media is fast becoming a field of forensics expertise unto itself. Facebook, Twitter, Flickr, blogs and all the other forms of social media are virtual warehouses of evidence. From philandering spouses to confidence-breaching executives, everyone seems to be over-sharing online. Even security-conscious companies cannot fully protect their communications. For courts and litigators to sort through it all, they will require greater numbers of experts in social media and technology.
6. Judges will take increasingly hard lines
Judges are mad as hell and they’re not going to take it anymore. They have no patience for frivolous claims, meritless motions or disregard for rules of court and evidence. Just recently, a federal appeals court affirmed a $4.7 million award
of attorney and expert witness fees against a company that filed a patent lawsuit and relied on “junk science” evidence. This was no aberration. Sanctions are up in e-discovery disputes, courts are more aggressively weeding out baseless claims, and judges are showing no tolerance for needlessly taking up their time.
7. IP litigation will be a hot practice area
As companies begin to recover amid a still-faltering economy, many will see their IP as their most rock-solid assets. A key priority in 2012 will be protecting IP from infringement or theft and enforcing IP licensing and other rights. Unfortunately, even as IP litigation becomes a key priority, courts have done little to clarify disputed legal issues. Many believe that patent reform legislation, signed into law last September, did little but create new issues to litigate. All of that means that 2012 is likely to bring plenty of litigation over IP.
8. Banking and finance will also be hot
With Dodd-Frank continuing to play out and the Volcker Rule set to take effect later this year, 2012 is sure to see an increase in cases involving banking and financial institutions. Initially, many of these matters will be regulatory investigations. Those will help breed enforcement litigation, class-action lawsuits, and other actions against these institutions.
9. Corporations will clamp down on spending
Litigation spending is out of control and litigation budgets continue to rise. As they’ve been doing for several years now, corporations will continue to demand greater accountability and more transparent pricing from outside counsel. In 2012, corporate clients will take greater control than ever before over spending decisions, selecting products and services in-house and mandating their use by outside counsel.
10. Federal rules reform will focus on e-discovery, not experts
When the Committee on Rules of Practice and Procedure of the U.S. Judicial conference convened its mini-conference on preservation and sanctions last September, it was a harbinger of a sort. For the foreseeable future – and certainly for 2012 – any talk of reforming the federal rules will focus on e-discovery. That means the rules governing experts are likely to be left alone, especially given that major revisions to FRCP Rule 26
took effect barely more than a year ago.
Those are our predictions. Now let’s hear yours. Add a comment below and tell us what you think is likely to happen on the litigation front this year.