bti litigation outlook 2016 executive summary

Compelling Research. Compelling Results.©2015 The BTI Consulting Group, Inc. All rights reserved.

2016

BTI Litigation OutlookChanges, Trends and Opportunities for Law Firms

EXECUTIVE SUMMARY

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©2015 The BTI Consulting Group, Inc. All rights reserved. +1 617 439 0333 www.bticonsulting.com BTI Litigation Outlook 2016: Changes, Trends and Opportunities for Law Firms

ORDER THE COMPLETE REPORT NOW FOR MORE THAN 20 STRATEGIES TO WIN WORK AND

THE LAW FIRMS CLIENTS NAME AS BEST: www.bticonsulting.com/litigationoutlook

Litigation Outlook 2016: Turning Market Trends into Growth Opportunities

At the core of BTI’s research is a simple idea: Understanding how clients’ expectations are changing to help you grow and capture new market opportunities, take smart risks, and spur innovation. Fewer matters, increased spending, more complex work. These are 3 of the recent changes impacting how clients are approaching litigation—and how law firms will win business. BTI’s 5th annual series on trends in the litigation market uncovers how client behavior—and spending—is changing in 2016. However, the trends aren’t the point of this report; the opportunities are. Our goal is to help you create and provide solutions before clients realize they need them. And months (or years) before your competitors realize the same opportunities exist.

6 Trends Shaping Litigation in 2016 | 2 Client Spending on Litigation | 9 Litigation Forecast, by Specialty | 13 Industry Opportunities | 32 How Clients Use Law Firms for Litigation | 35 The Fearsome Foursome | 47 BTI’s Recommendations for 2016 | 49 Methodology | 53 About BTI | 55 Index of Firms | 60

http://www.bticonsulting.com/litigationoutlook

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6 trends shaping litigation in 2016 And more than 20 strategies to put into action. TODAY!

1. PRICES UP, VOLUME DOWN More high-rate work, but less work overall

2. HIGH-STAKES WORK SKYROCKETS

More premium work up for grabs

3. THE IP LITIGATION BUBBLE HAS OFFICIALLY POPPED

Less available work requires strategically targeting clients you want

4. CASE RESOLUTION A PATH TO MORE WORK

Clients looking to settle faster and earlier

5. GET AHEAD OF THE CLASS (ACTIONS)

The age of class actions is about to dawn

6. 4 LAW FIRMS CUT FROM CLIENT LITIGATION ROSTERS

Even entrenched law firms are on clients’ chopping block

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1. PRICES UP, VOLUME DOWN

0

200

400

$15

$20

$25

$30

2011 2012 2013 2014 2015 2016(Projected)

Litigation Spending Total Matters

Billions Matters

IMPLICATION:

More high-rate work, but less work overall.

In 2016, litigation spending is expected to see its first increase since 2011. However, this uptick in the market doesn’t mean the market is returning to its former heyday. In fact, high resolution rates indicate fewer litigation matters will be on corporate counsel dockets. Fewer matters means fewer opportunities to be hired. Competition will be higher than ever to win litigation work. The upside: the firms able to snag the growth in premium work will see higher levels of spending per matter than before.

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2. HIGH-STAKES WORK SKYROCKETS

Percent of companies with matter type

91.5%

84.5%

23.9%

91.2%

78.9%

12.3%

96.2%

78.2%

37.2%

0%

100%

Routine Complex Bet-the-Company

2013

2014

2015

IMPLICATION:

More premium work up for grabs.

Premium rate work is growing while overall matter volume is down. Bet-the-Company litigation virtually tripled and is heading higher. Law firms able to quickly assess—and articulate—the business implications (strategies, costs, time investments, likely outcomes, etc.) on high-stakes matters will be better positioned to win this work. See page 12 in the full report for additional recommendations on how to best position your firm for these high-rate matters.

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3. THE IP LITIGATION BUBBLE HAS OFFICIALLY POPPED

Billions

$2.42

$2.81 $2.89 $2.89 $2.76 $2.72

$1

$4

2010 2012 2013 2014 2015 2016 (Projected)

19.3% INCREASE 5.7% DECLINE

IMPLICATION:

Less available work requires strategically targeting clients you want.

The rapid growth of the IP litigation market was just as quickly tempered. Risk-averse corporate counsel were swift to adopt proactive strategies and monitoring solutions to ensure the risk—and cost—of IP litigation didn’t upend their legal budgets. This means fewer IP issues are escalating into high-stakes litigation. A more strategic approach to managing IP litigation is needed if a firm wants to be in position to handle IP litigation for clients. See page 23 in the full report on how to best position your firm to capture premium-rate IP litigation cases.

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4. CASE RESOLUTION A PATH TO MORE WORK

22.2%

36.9% 41.6%

36.5% 40.1%

47.8%

42.6%

0%

75%

2009 2010 2011 2012 2013 2014 2015 2016(Projected)

Percent of Active Matters Settled

IMPLICATION:

Clients looking to settle faster and earlier.

Attract the best clients by showcasing: streamlined early case assessment, smarter staffing arrangements, budgets (including adherence to them), and proactive settlement strategies.

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5. GET AHEAD OF THE CLASS (ACTIONS)

Billions

$2.24

$2.06 $2.05 $2.03 $2.10 $2.14

$1

$3

2010 2012 2013 2014 2015 2016 (Projected)

8.7% DECLINE 5.5% INCREASE

IMPLICATION:

The age of class actions is about to dawn.

Class Actions are about to be big—extremely big. Certification reclassifications and increasing regulatory scrutiny have tempered Class Actions spending for the past few years. However, the talk of Class Actions becoming a global issue points to one trend: the recent decline in this spending area is about to reverse. Law firms looking to be a player in the Class Actions market will need to start laying the groundwork, today, with clients most at risk (see page 17 in the full report for a detailed look at class actions).

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6. 4 LAW FIRMS CUT FROM CLIENT LITIGATION ROSTERS

IMPLICATION:

Even entrenched firms are on clients’ chopping block.

It just got a lot harder to win litigation work. In 2015, clients used 4 fewer law firms for their litigation needs than in 2014. The perfect storm of fewer litigation matters, higher resolution rates, and increasingly complex work drives corporate counsel to cap their roster of law firms used for litigation. See page 36 in the full report for more details on why complex work drives the use of fewer law firms and how you can ensure your firm doesn’t end up being cut.

Number of Law Firms Relied on for Litigation

17 18

20 21

17

0

30

2010 2012 2013 2014 2015

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Methodology and Approach

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Research Methodology and Approach

BTI Litigation Outlook 2016 is based solely on in-depth telephone interviews with leading legal decision makers. This comprehensive analysis trends data from more than 4,000 corporate counsel client interviews conducted over the span of 15 years. This research is independent and unbiased—no law firm or organization other than BTI sponsors this study. Each year, BTI reaches out to a sample of legal decision makers at large organizations with $1 billion or more in revenue. Participants are granted confidentiality at the individual and organizational level.

2016 SURVEY PARTICIPANT DEMOGRAPHICS

• Head of Litigation • Chief and Vice President of Litigation • General Counsel/Chief Legal Officer • Direct report to General Counsel

LEGAL DECISION MAKERS RESPONSIBLE FOR LITIGATION

322 in-depth telephone interviews Interviews

Conducted between March 9 and September 10, 2015 Time Frame

Respondents receive a complimentary report of legal benchmarks and metrics

Incentives

OVERVIEW

ORGANIZATIONS WITH HIGHEST LEVELS OF LEGAL SPENDING

$18.2 billion

$4.7 billion

Average Revenue Median Revenue

REPRESENTATIVE

OF MORE THAN 15

INDUSTRY SEGMENTS

Banking

Chemicals

Consumer Goods

Energy

Financial Services

High Tech

Insurance

Investment Banks

Manufacturing

Pharmaceuticals

Professional Services

Retail Trade

Telecom

Transportation

Wholesale Trade

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About The BTI Consulting Group

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Immediately Drive Growth with CLIENTELLIGENCE®

Pinpoint your strengths—and weaknesses— in the activities proven to drive growth

THE 17 ACTIVITIES DRIVING GROWTH

Quadrant I: Relationship Bliss 1. Commitment to help 2. Client focus 3. Understanding the client’s business 4. Providing value for the dollar

Quadrant II: Price of Admission 5. Legal skills 6. Quality 7. Meeting core scope 8. Keeping clients informed 9. Dealing with unexpected changes 10. Handling problems

Quadrant III: Relationship Builders

11. Breadth of services 12. Helping advise on business issues 13. Regional reputation 14. Unprompted communication 15. Bringing together resources

Quadrant IV: Business Magnets

16. Anticipating the client’s needs 17. Innovative approach

BTI’s 25 years of research pinpoint the 17 activities responsible for driving the absolute best client relationships. In essence, they are how clients define client service excellence and what clients expect out of the firms with whom they have the best relationships. The best-in-class performances in these activities are proven to drive superior financial performance. There’s only 1 way to determine if you are hitting the best-in-class threshold: ask. Client feedback allows you to unequivocally pinpoint where you are excelling and where you need systematic improvements in your relationships. The best feedback initiatives not only assess how you and your firm perform, but also look at the performance of the competitors also serving your clients. At the end of the day, what does it matter if a client thinks you are doing great, if a competitor is doing better?

LEARN MORE ABOUT THE 17 ACTIVITIES AND

BTI’S NEWEST BOOK: CLIENTELLIGENCE

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BTI dissects each and every aspect of the client experience through more than 14,000 independent interviews with C-level executives and systematic analysis. BTI has helped professional services firms boost client service for over 25 years. BTI is the leading provider of strategic research to the legal community—performing more market research about law firms than virtually anyone. BTI has helped more than 200 law firms and professional services firms improve client service through compelling research and advice. We conduct the only continuous benchmarking market study in the legal services industry, now in its 16th year.

Drive new business immediately

Keep competitors out of your client base

Find your strengths… and weaknesses

BTI conducts the most insightful, custom client surveys as

part of world-class client feedback programs to drive growth.

Clients use BTI’s fact-based approach and powerful

decision-making tools to drive change, create urgency, and

substantially boost performance.

USE BTI’S SERVICES AND RESEARCH TO:

Learn what clients really want from you

Who We Are

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BTI PERFORMS A BROAD RANGE OF SERVICES FOR OUR CLIENTS, INCLUDING:

CUSTOM CLIENT FEEDBACK RESEARCH

CLIENT SERVICE PERFORMANCE STUDIES

CLIENT NEEDS ASSESSMENT

BUSINESS DEVELOPMENT

STRATEGIC BUSINESS PLANNING

CLIENT-FOCUSED BUSINESS PRACTICES

CUSTOM TRAINING

BENCHMARKING YOUR PERFORMANCE

YOUR FIRM’S CLIENT SERVICE SCORE

FINANCIAL AND MARKET PERFORMANCE

COMPETITIVE ANALYSIS

MARKET ASSESSMENT

BRAND HEALTH & MARKET AWARENESS STUDIES

NEW MARKET ENTRY ASSESSMENTS

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PARTNERS AND ATTORNEYS

CLIENT INSIGHT BRIEFINGS

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FACTS, BTI BRIEFINGS DRAW FROM OUR RESEARCH, EXPERIENCE, AND

OTHER RESOURCES TO PROVIDE PROVOCATIVE, CONSTRUCTIVE

INSIGHTS TO HELP YOU BOOST CLIENT SATISFACTION, INCREASE CLIENT

RETENTION, AND IMPROVE YOUR PERFORMANCE. WE CAN TAILOR OUR

BRIEFING TO INCLUDE SPECIFIC FEEDBACK ON YOUR FIRM.

PLEASE CONTACT MICHAEL B. RYNOWECER AT +1 617 439 0333 OR

[email protected]

TO LEARN MORE ABOUT BTI’S CUSTOM RESEARCH & SERVICES.

Key Services to Help Our Clients

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The data and insight found in BTI’s reports are used to train attorneys, guide business development, inform strategy, and calibrate market trends against firm tactics. In short, you get many of the benefits of a custom study commissioned for your firm, at a fraction of the cost. These insights are proven to drive growth and client retention and protect fees. All of our reports come with a 100% satisfaction guarantee and complete telephone support to help you maximize the value from our publications.

You can order these and other compelling BTI research or publications at

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BTI LEGAL SPENDING OUTLOOK 2016 – RELEASED OCTOBER 2016

BTI’s Legal Spending Outlook outlines how clients are changing their spending and use of law firms—by practice—in 2016. Learn how to use the distinctive characteristics of 17 different practice areas to target the best opportunities

for your firm and beat out competitors.

BTI CLIENT SERVICE A-TEAM 2016 – RELEASED NOVEMBER 2016

17 activities drive superior client relationships. 4 matter most. Discover how clients rate more than 300 law firms—by name—in these key activities, including Client Focus, Commitment to Help, Legal Skills,

and Provides Value for the Dollar.

BTI BRAND ELITE 2015

Based on why clients hire and recommend law firms—not the services, size, or location of a law firm—BTI’s research reveals how law firms of any size

reap substantial new business by improving brand perceptions in the market.

BTI CLIENT SERVICE ALL-STARS 2015

354 attorneys step up to meet—and exceed—clients’ expectations and earn recognition, by name, from corporate counsel for delivering

the absolute best client service.

Additional Insights from BTI Research and Publications

http://www.bticonsulting.com/

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THIS COPY OF BTI LITIGATION OUTLOOK 2016 EXECUTIVE SUMMARY IS LICENSED TO YOU FOR PRIVATE, NONCOMMERCIAL USE FOR INTERNAL, COMPANY PURPOSES. NO PORTION OF THIS INFORMATION MAY BE COPIED OR TRANSMITTED IN ANY FORM, SHAPE OR MANNER WITHOUT THE PRIOR WRITTEN CONSENT OF THE BTI CONSULTING GROUP, INC., OF WELLESLEY, MA. ANY VIOLATION OF THIS LICENSE MAY BE PUNISHABLE BY APPLICABLE FEDERAL STATUTES AND SUBJECT THE USER TO ADDITIONAL AND COMPENSATORY LICENSING FEES. COPYRIGHT ©THE BTI CONSULTING GROUP, INC., 2015.

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Please contact Michael B. Rynowecer, BTI President, at +1 617 439 0333 or at [email protected] with your questions, thoughts, and comments.

Contact BTI


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FOR MORE THAN 20 STRATEGIES TO WIN WORK AND THE LAW FIRMS CLIENTS NAME AS BEST:

ORDER YOUR COMPLETE REPORT NOW www.bticonsulting.com/litigationoutlook

6 Trends Shaping Litigation in 2016 | 2 Client Spending on Litigation | 9 Litigation Forecast, by Specialty | 13 Industry Opportunities | 32 How Clients Use Law Firms for Litigation | 35 The Fearsome Foursome | 47 BTI’s Recommendations for 2016 | 49 Methodology | 53 About BTI | 55 Index of Firms | 60

http://www.bticonsulting.com/litigationoutlook

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