Texas-based companies are facing fewer and fewer lawsuits and the lawsuits they are facing are costing them less, according to a new survey of corporate general counsel by Norton Rose Fulbright.
An overwhelming majority of corporate in-house lawyers in Texas, however, say they are increasingly worried that cybersecurity attacks and data breaches will lead to a significant amount of litigation in the future.
Then there is this unsurprising statistic: General counsel keep saying they plan to employ more alternative fee arrangements with their outside law firms, but there is no evidence that is happening.
The Norton Rose Fulbright 14th Annual Litigation Report found that the largest percentage of litigation facing Texas businesses actually involve contract disputes with other companies.
Labor and employment lawsuits and personal injury claims ranked second and third, respectively.
Texas corporate lawyers say the number of regulatory matters they faced in 2018 remained essentially the same as the year before, but the worry about future regulatory actions declined slightly, according to the survey by the Houston-founded law firm.
“I found it surprising that general counsel saw a decrease in the number of civil lawsuits they are facing,” said Gerry Pecht, a Houston lawyer who leads the Norton Rose Fulbright global litigation practice.
Pecht said that the decline is the result of businesses employing more litigation-preventing instruments in their toolbox.
Energy companies surveyed said that 56 percent of their litigation docket involved contract disputes with other companies.
Norton Rose Fulbright litigation partner Adam Schramek, who has worked on the firm’s litigation study since it was started in 2004, said there are several surprises in this year’s results.
“The amount of legal spend is down a good bit from last year,” said Schramek, who also serves as president of the Austin Bar Association. “Companies spent $1.2 million in litigation costs per $1 billion in corporate revenues, which is down from $1.5 million.”
The report found that 32 percent of Texas general counsel said they want to use alternative fee arrangements involving future litigation, but only two percent of companies said they used AFAs more last year.
Seventy percent of the companies’ outside legal spend was paid through the billable hour.
The category with the biggest difference between 2017 and 2018 is data privacy.
“The amount of concern by businesses over cybersecurity hacks and subsequent litigation is extraordinary and real,” Schramek said. “Two-thirds of companies feel more exposed than they did a year ago.”