Good morning!
Corporate counsels are accustomed to handling all kinds of legal struggles, from labor disputes to regulatory compliance issues. But their workloads are increasing, and the year ahead promises to dish out even more legal drama.
The vast majority, (82%) percent of corporate counselors say their organizations were involved in at least one lawsuit in 2024, according to a recent survey of 400 in-house legal professionals (most of whom play a leading or co-leading role in litigation at their companies), from global law firm Norton Rose Fulbright.
Dealing with legal disputes is also becoming a larger issue for many companies. Last year, 34% of corporate counselors reported an increase in employment and labor disputes, with the most growing concern being discrimination and harassment issues.
Companies are also having a more difficult time reaching settlements, with 82% saying it’s become more difficult. And around 70% of respondents reported being involved in at least one regulatory proceeding in 2024, compared to 61% in 2023 and 50% in 2022. The legal process has also become more expensive. The average litigation spend for companies with $1 billion or more in revenue in 2024 was $4.3 million, up from $3.9 million in 2023, the study notes.
The trend of heavier corporate legal workloads doesn’t seem to be slowing down, either. Nearly half of respondents expect to see more regulatory investigations and proceedings against their organizations in the coming year. Nearly half of the corporate counselors expect the number of lawsuits impacting their organizations to increase in the year ahead, and roughly the same number say they expect an increase in employment and labor disputes in 2025, up from 44% in 2024.
The anticipated increase in employment litigation exposure this year is likely driven by economic uncertainty and political changes, Kimberly Cheeseman, co-head of litigation and disputes at Norton Rose Fulbright’s Houston office, noted during a media roundtable about the survey. She added that the use of AI in hiring decisions is also a “growing area of risk” as employers address concerns raised by the Equal Employment Opportunity Commission and the Department of Labor. Discrimination and harassment cases are also expected to rise, she adds, particularly with “the emergence of reverse discrimination lawsuits.”
Keep in mind this survey polled corporate council members at the end of 2024, prior to President Trump's latest executive orders targeting DEI across the private sector, which experts say will likely spur a new wave of lawsuits over the next year.
“Bottom line, I see more litigation overall,” Timothy J. Ford, a political law attorney at Dilworth Paxson, told Fortune, adding that moves from the Trump administration “opens up all kinds of public and private litigation.”
Despite these challenges, in-house legal leaders do feel somewhat secure in their preparation for upcoming lawsuits. Nearly half (49%) of companies with more than $1 billion in revenue say they are “very prepared” to address litigation over the next 12 months. This could be due to companies using more proactive risk management strategies, the study points out. And around 46% of respondents say their organizations will embed lawyers into more business operations to monitor risk exposure continuously.
Brit Morse
brit.morse@fortune.com
