Last week, we explored the outlook for midsize firms’ transactional practices in the year ahead. This time, let’s consider how litigation work may fare in the coming months.
According to figures released earlier this month by Thomson Reuters, litigation demand grew 3.3 percent in 2024, outpacing the 2.8 percent growth rate of 2023. Along with labor and employment work, litigation “accounted for almost 40 percent of all lawyer work hours” last year and helped offset a slowdown in other practices, such as bankruptcy and patent prosecution.
“The end result was a massive, if highly unusual, surge in overall demand across a number of diverse practices,” Thomson Reuters said. “Moreover, the demand surge across practices occurred in every segment of the market.” This included midsize firms, which picked up price-conscious clients who turned away from Big Law, Thomson Reuters reported.
Litigation practices are likely to continue experiencing growth in 2025. In its most recent survey of clients, BTI Consulting found that 57 percent plan to increase their litigation budgets. Overall, BTI predicts a 6.9 percent rise in overall spending by U.S. companies on outside counsel in 2025, the largest increase in a decade. “More clients are increasing their litigation spending in 2025 than in the last 8 years. Litigation is more complex than ever. Clients face more claims than ever. And, new never-before-seen claims are piling up. This all demands outside counsel,” BTI said.
Top Litigation Areas
Earlier this month, Norton Rose Fulbright issued its Annual Litigation Trends Survey, which asked more than 400 general counsel and in-house litigation leaders in the United States and Canada about their predictions for 2025. After facing a tough litigation landscape in 2024, in-house counsel said they expect greater challenges in the year ahead, Norton Rose said. Only 14 percent of GCs said they expect lawsuits to decrease this year.
“Nearly half of corporate counsel expect the number of lawsuits (48%) and regulatory investigations (46%) impacting their organizations to increase in the year ahead, including a rise in legal disputes as plaintiffs seek to limit regulators’ authority in a post-Chevron landscape,” Norton Rose said. “The Trump administration may bring sharply different regulatory priorities that could lessen burdens in areas such as antitrust while fueling new legal actions on ESG initiatives, consumer protection frameworks and other issues.”
The top 10 areas GCs said they were most likely to see litigation were:
- Cybersecurity and data privacy
- Employment and Labor
- Regulatory
- Banking and Finance
- Contracts
- Class Actions
- Personal Injury
- Product Liability
- Antitrust and competition
- Bankruptcy
In a recent interview with the Am Law Litigation Daily, the global co-chair of Simpson Thacher’s litigation department said litigants seem increasingly willing to risk litigating to a conclusion or longer than usual to improve settlement possibilities. “Traditional regulatory-initiated investigations may not have the same pace, but in the commercial litigation, we see people ready to rumble,” the Simpson Thacher partner told Am Law.
In the Norton Rose Fulbright survey, eight in 10 in-house counsel respondents also said they were increasingly concerned with the growth of high jury awards—so-called “nuclear verdicts.” Eighty-two percent of GCs said that “reaching a settlement has become more difficult due to factors such as increasing legal costs, regulatory changes and high settlement demands,” Norton Rose said.
Litigation Drivers
In the litigation area where GCs expect the most action, cybersecurity, innovation by the plaintiffs’ bar may be helping drive a continuing increase in cases. Crowell & Moring, in its litigation forecast for 2025, noted that “plaintiffs’ lawyers continue testing out new legal theories to bring claims against any company that collects, uses, or sells customer data.”
Many of the cases are driven by the glut of data breaches that have bedeviled companies. “But less conventional suits targeting how companies handle personal customer information and the role of consumer notice and choice—even in the absence of a data breach—are increasingly common as well…most notably under California’s Invasion of Privacy Act,” Crowell said.
In employment and labor cases, the no. 2 area for potential 2025 activity in Norton Rose’s survey, Crowell cited four key areas, including litigation involving compensation; age discrimination in entry-level recruiting; artificial intelligence; and diversity, equity, and inclusion (DEI) programs.
Class actions on pay equity issues are “picking up steam,” Crowell said, especially amid demands for greater pay transparency by companies. Multiple cases allege that companies who limit qualifications in job postings to recent college graduates are unfairly discriminating against older workers. Companies using AI in employment decisions may face an increase in suits over potentially discriminatory results. And, Crowell noted, “state attorneys general and private litigants have been challenging programs designed to enhance diversity, equity, and inclusion in the workforce. In the employment context, at issue are initiatives such as minority hiring or representation goals; targeted recruitment efforts; and internship, mentorship, or sponsorship programs.”
If the predictions hold true, as we continue to move into 2025, demand for skilled outside litigation counsel may be higher than ever. Midsize firms that can adapt their technology, pricing and skill sets will be well-positioned to take advantage of a significant increase in litigation activity.
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