Litigation Picking Up? Forum

[Anonymous User]

Have there been any signs that litigation will continue to be steady and/or pick up with the supposed recession? I’ve heard slightly positive things from my lit-strong firm in NYC. Then, there’s also the Dem presidency and investigations work stream that apparently is happening/should happen?

I’ve always heard litigation does well/is counter-cyclical, but haven’t seen too many ATL or Law.com articles discussing it for this era. Just seeing the usual transactional slow-down articles.

[12YrsAnAssociate]

My experience from the great recession is that litigation does not necessarily pick up during recessions, and that because of firm and client budget issues, litigation practice groups can also be adversely impacted by recessions--e.g., more clients delay payment and firms will cut litigation groups back some too if needed to meet financial goals. But litigation is nonetheless far more stable during a recession than deal work is.

[Anonymous User]

Have there been any signs that litigation will continue to be steady and/or pick up with the supposed recession? I’ve heard slightly positive things from my lit-strong firm in NYC. Then, there’s also the Dem presidency and investigations work stream that apparently is happening/should happen?

I’ve always heard litigation does well/is counter-cyclical, but haven’t seen too many ATL or Law.com articles discussing it for this era. Just seeing the usual transactional slow-down articles.

Depends a lot on the scope of the lit practice. Stuff that is regulatory or white collar focused is typically seen as pretty robust to the business cycle because if you’re facing a big regulatory issue or potential corporate criminal liability, you don’t fuck around regardless of the short term economic outlook. General commercial lit is relatively more cyclical because more of it is discretionary for the client. Other practices (securities, IP, etc) have their own dynamics and the pace of work will likely depend on the particular positioning of certain firms and practices.

[Anonymous User]

Have there been any signs that litigation will continue to be steady and/or pick up with the supposed recession? I’ve heard slightly positive things from my lit-strong firm in NYC. Then, there’s also the Dem presidency and investigations work stream that apparently is happening/should happen?

I’ve always heard litigation does well/is counter-cyclical, but haven’t seen too many ATL or Law.com articles discussing it for this era. Just seeing the usual transactional slow-down articles.

Depends a lot on the scope of the lit practice. Stuff that is regulatory or white collar focused is typically seen as pretty robust to the business cycle because if you’re facing a big regulatory issue or potential corporate criminal liability, you don’t fuck around regardless of the short term economic outlook. General commercial lit is relatively more cyclical because more of it is discretionary for the client. Other practices (securities, IP, etc) have their own dynamics and the pace of work will likely depend on the particular positioning of certain firms and practices.

This is mostly true, but I wanted to add that lit can sometimes be counter-cyclical. Company-v.-company IP lit can work that way. When markets are growing, companies often just duke it out with competitor(s) for those new sales. But if the market contracts and they can't offset lost sales by winning market share from competitor(s), then why not just go after the competitors' profits instead?

[Anonymous User]

General commercial lit is relatively more cyclical because more of it is discretionary for the client.

IME very little of biglaw commerical lit is discretionary; companies don't decide when to get sued and companies that go to biglaw to become plaintiffs aren't going to stop doing that in a slow time because it can drive revenue and because SoLs mean they can't wait indefinitely. But based on the economy, they might be more cost-conscious in firm selection, in billing guidelines/hours caps for various stages of the case, or in the speed that they decide to settle.

The first two weigh against biglaw being busy; the last one weighs in favor, I think, because some clients will decide not to settle and wait for the economy to improve before taking a hit in a settlement (or even a loss at trial), betting that the judgment will come when they have more cash flow.

[Anonymous User]

Interesting. I was curious as well given that my lit department has been really busy. I’ve also seen more lateral lit postings than usual, but idk.

[objctnyrhnr]

My concern is Re clients being way more concerned about costs due to cash flow, being difficult about hours spent and billing rates, and then settling like pre disco.

So yeah maybe companies and individuals are more litigious against companies during bad times, but I’m just not sure that it results in more billable hours being available.

[Anonymous User]

Wouldn’t bankruptcy lit then just get busy?

[Lacepiece23]

My concern is Re clients being way more concerned about costs due to cash flow, being difficult about hours spent and billing rates, and then settling like pre disco.

So yeah maybe companies and individuals are more litigious against companies during bad times, but I’m just not sure that it results in more billable hours being available.

I started practicing in 2015 and it was really shitty. It was close enough to the Great Recession and everyone cut bills like crazy. I think the most likely scenario is that companies will demand the same amount of work or more at a reduced price, which will then be passed down to associates to deal with.