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The Litigation Consulting Report

2017 Will be a Great Year for (Most Types of) Trials

Posted by Ken Lopez on Fri, Jan 27, 2017 @ 12:47 PM

2017-trials-economic-outlook-litigation.jpgKen Lopez
Founder/CEO
A2L Consulting

This is the fifth consecutive year that I've written a new year economic outlook article focused on litigation. Please review some of my previous articles that were focused on 2016, 2015, 2014, and 2013. While I believe that 2017 will be a very good year for litigation, it will not be good for everyone. From where I sit, things look and sound remarkably different during this current economic expansion than they did in previous years.

A2L's litigation consulting business, one focused almost entirely on trials, is thriving. We've grown more than 50% in each of the past two years, and I'm forecasting similar or better growth for 2017. Our growth is spread across many law firms/corporations and many areas of the law, so I know it's meaningful growth.

Yet any conversation with my large law firm managing partner friends or my big company in-house counsel friends suggests that litigation should be having an off year. These well-informed sources, as well as courthouse data, tell me that case filings are down and that litigation at big law firms is down.

So, how can our trial-driven firm be prospering and big litigation departments be faltering? One of us has to be looking at the litigation industry all wrong, right? 

Actually, I believe that we're both right, and I'm trying on some new vocabulary to explain it.

I've long observed that litigation is closely tied to economic growth. It's simple logic. Big companies drive both the economy and big-ticket litigation. When one moves up or down, so does the other, quite reliably. 

After more than 21 years as one of the leading litigation support companies largely focused on big-ticket litigation, I (finally) realize there is a more nuanced way of looking at litigation and trials. I used to think litigation was either small-ticket or big-ticket, and A2L is focused mostly on the latter. But now, after going through a few periods of robust economic growth (the early and mid-2000s and the current market), I understand that there's actually a third type of litigation. For now, I'm calling it resolvable big-ticket litigation.

By “resolvable big-ticket litigation,” I'm referring to those large cases with between tens of millions and billions of dollars at stake that could be settled if the parties were truly motivated to do so. Everyday big-ticket litigation is distinguishable from resolvable big-ticket litigation since in the former type, there just isn’t a good settlement position. Perhaps it's a patent dispute where there is no reasonable licensing compromise, or an antitrust case where the merger is either going to be approved or blocked, or one of those cases where what’s at stake is a principle, not money.

What I notice about resolvable big-ticket litigation is how highly sensitive it is to economic fluctuations. Yes, all big-ticket litigation rises and falls with economic conditions. But resolvable big-ticket litigation is very sensitive to it. Economists would say it is highly elastic; if there is a small increase in the rate of economic growth, resolvable big-ticket litigation skyrockets. Of course, the opposite is true too. When the economy dips or economic uncertainty is introduced, those resolvable cases are in fact resolved because companies stop gambling or at the very least, they take some risk off the table.

The last year I saw resolvable big-ticket litigation performing as well as it is now was 2005. I expect current levels to continue through 2017 at least, and here's why.

Big-ticket litigation generally, and certainly resolvable big-ticket litigation, is highly correlated with the economy, and leading indicators that reliably predict economic growth six to nine months in the future are soaring.

Take a look here at the latest report of ECRI, the Economic Cycle Research Institute or simply look at these charts below.

ECRI-2017-leading-indicators-litigation.jpgIf you read annual articles of mine in the past, you know that I put enormous faith in the work of ECRI. They publish these straightforward leading indicators, and notably they have been on the rise for the last year and they are currently reaching levels we have not seen in a decade. 

In both the weekly chart and the monthly charts above, the green line reflects a prediction of what will happen in six to nine months based on very reliable data. If it's going up, it's good because it means growth is coming. Down means growth is slowing.

Under the weekly chart, there is a monthly chart looking at the past 40 years. Look only at the green line, and you'll see the historic levels the growth rate leading indicator is approaching. If you want to learn more about this forecasting tool, I recommend the book Beating the Business Cycle.

With this level of economic growth setting up, I'm expecting another great year of trials of all types. However, if resolvable big-ticket litigation is the type that really skyrockets in boom times, I'm also looking for more of that this year.

So, while there are in fact fewer trials than there used to be, resolvable big-ticket litigation appears to be on the rise. For the typical large law firm, this means fewer cases but a higher proportion of trials. For a company like ours, these are boom times. The biggest risk for our firm and the entire litigation industry is whether uncertainty generated by the change in the administration causes large companies to pull back on their litigation spend or take fewer risks at trial. Time will tell, but the leading indicators do not suggest a pullback—yet.

Articles related to the economics of the litigation market, law firm sales, pricing and more on A2L Consulting's site:

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Tags: Economics, Litigation Consulting, Litigation Support, Leadership

The Litigation and Economic Outlook for 2016

Posted by Ken Lopez on Thu, Jan 14, 2016 @ 01:42 PM

litigation economy biglaw litigation consultingby Ken Lopez
Founder/CEO
A2L Consulting

Last month the Federal Reserve raised interest rates for the first time in nine years. This action signals that the Fed believes we are entering a period of sustained and significant economic growth. Although the Great Recession officially ended in 2009, for a lot of people, this Fed action may mark the emotional end of it.

Economic conditions do feel considerably better than they did just a few years ago. Most people who want a job can get one now. However, most jobs pay less than they did 10 years ago. Furthermore, a staggering 40% of people over the age of 16 do not have a job. That's the lowest number since the Jimmy Carter years.

So, we can't quite say things are rosy, but we can't say things are terrible either. After all, in 2009, more than 700,000 jobs (including a lot of legal industry jobs) were being lost per month, and now, 250,000 jobs are being added to the economy in a typical month.

What does this all mean for those of us who work in the litigation industry? Will 2016 be a good year? The answer, I believe, is that while it will not be an incredible 2005-like year, it will probably be a little better than 2015, and that's not too bad. Let me support that belief with some additional details.

This is the fourth year I've written an economic forecast for the litigation industry. For 2013, I forecasted improving conditions for all of us, and we saw the economy grow by 2.3%. That was actually a significant improvement over the year before which saw many law firms not growing or even shrinking. For 2014 (also including a mid-year update) and 2015, my forecast was about the same, and so were the results - modest growth.

For law firms and their litigation departments and for litigation support firms like A2L Consulting, these past several years have been growth years. But will it continue? After all, recessions come about once every seven years, and the last recession occurred in 2009.

The last several years have seen only modest economic growth, and there is just not much evidence to suggest that will change. Fortunately, there are no obvious signs of a coming recession in the next year. Worker productivity and corporate profits are both very high, so we can expect the Fortune 500 to continue to perform well. That largely translates into good economic growth numbers, and leading economic indicators support that direction.

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If you've been reading this blog for some time, you know that my forecasts are not conjecture or gut instinct. Rather, they are largely based on what I have found to be the single most reliable economic forecasting tool available, the ECRI Weekly Leading Index.

This index is a composite leading indicator of overall economic conditions looking 6 to 9 months in the future. In my 20 years of running a litigation consulting firm, nothing has proven more reliable, and I use this tool to forecast growth and make decisions about capital investment, hiring, and expansion. In our business, when the ECRI Index is trending up, and the Fortune 500 is doing well, I have a very bullish outlook.

This is true because when the Fortune 500 performs well, so too does big-ticket litigation. When profits are up, Fortune 500 firms are more likely to initiate litigation, risk going to trial, be less likely to settle cases early, and often be willing to outspend their opponent as part of a litigation strategy. For law firms and companies like A2L who spend most of their time around multi-hundred-million-dollar litigation, this translates into another good year ahead. The leading indicators generally support this belief.

Screen_Shot_2016-01-14_at_8.43.29_AM.png

To quickly understand this ECRI chart (if it's not mid-January 2016, click to see this week's current version), know that the green line represents a forecast of economic growth about 8 months in the future from the date on the x-axis. When it goes up, that is good. The blue line represents what actually happened at a given point in time in the economy. The blue line shows us that economic growth has been declining since April, but it is not negative. The green line tells us that starting at a point of February 2015 + 8 months (roughly Oct 2015) through the middle of 2016, we can expect to see a return to higher rates of growth. That will be followed by a period of some sustained or slightly less than modest growth. 

All of this translates into a pretty good 2016 for most of us in litigation, and I hope to see you in court on the correct side of the "v."

Articles related to the economics of the litigation market, law firm sales, pricing and more on A2L Consulting's site:

litigation consulting graphics jury trial technology  

Tags: Economics, Litigation Consulting, Litigation Support, Midsize Law Firms

Winning BEFORE Trial - Part 1 - Consider Litigation Costs and Opportunities

Posted by Ryan Flax on Wed, Aug 5, 2015 @ 01:59 PM

 

pre-trial-graphics-litigation-consultantsby Ryan H. Flax
(Former) Managing Director, Litigation Consulting and General Counsel
A2L Consulting

High-stakes litigation is hugely expensive these days. But what if there were a means of reducing litigation costs in a way that helps both the trial team and the client and doesn’t sacrifice the quality of legal representation? That would make in-house counsel very happy, since an important part of their job is to budget and control litigation costs. There are a number of ways to do this, such as using alternative fee arrangements, streamlining litigation teams and bringing e-discovery in house.

But what about a more radical step – trying to win your case well before trial? That would indeed be a cost saver and would lead to an excellent result.

Let’s first look at how expensive this type of litigation can be. A piece of employment litigation that is in the top 25 percent of costs (but not in the top one percent or anything like that), costs close to $1 million by the end of discovery – and that’s before closing arguments. And the costs are mostly borne by the defendant.

Or consider a typical patent infringement case – say, one that involves possible damages of $1 million to $10 million. This kind of case usually ends up costing more than twice as much as that employment case. By the time discovery is over in the patent case, you’re well past the $1 million mark in costs. Other types of cases – antitrust, environmental, contract cases and the like – are not quite as expensive, but costs add up there too.

how-much-does-litigation-cost

But it doesn’t have to work out that way. There are quite a few ways of winning a case without a trial.

First, we all know about dispositive motions – motions to dismiss, summary judgment motions, motions related to venue and jurisdiction, and the like. These can end a case before trial, but after the filing of a brief and usually an oral argument.

Second, a Markman hearing is a special type of proceeding in a patent case in which the court hears argument (and sometimes some expert testimony) and decides what the patented invention actually is by interpreting the patent claims and resolving disputes over claim language.

Third, a pre-indictment meeting is one that takes place when your client is under investigation by the government and you would reasonably expect charges to be presented against it. This usually involves an attempt by counsel to persuade the government to drop a case before it begins.

Finally, we all know about mediation, arbitration and settlement.

All of these are out-of-court occasions in which lawyers have a chance to argue their clients’ cases before trial. They can happen in lieu of a trial or just before a possible trial.

What do all of these have in common? They are all opportunities, before trial, to begin winning your case by using the best practices of case framing and persuasion.  If you can raise your game in these situations, if you can persuade the court or opposing counsel or the opposing party or a mediator or the opposition’s star witness that you’re a winner, how much better off would you be?

In our next post, we will discuss more about these best practices and how they can help you win. To be notified when subsequent articles are published, click here.

Additional articles and resources focused on pre-trial strategy and trial preparation from A2L Consulting:

* Chart data is based on 2013 Court Statistics Project Caseload Highlights, RAND Institute for Civil Justice “Where the Money Goes, Understanding Litigant Expenditures for Producing Electronic Discovery” (2012) and 2013 AIPLA data.

pretrial trial graphics motions briefs hearings

Tags: Economics, Markman Hearings, Arbitration/Mediation, Trial Preparation, Pricing, White Collar, Settlement, Briefs

7 Award-Winning LitigationWorld Articles

Posted by Ken Lopez on Wed, May 27, 2015 @ 01:07 PM

 

litigationworld-450by Ken Lopez
Founder/CEO
A2L Consulting

We just learned that a blog post that we wrote recently was named the “Pick of the Week” by LitigationWorld, a popular email newsletter for litigators, litigation support professionals, and corporate counsel who manage litigation. This is the seventh A2L Consulting post since 2011 to be so honored.
 
For each issue of LitigationWorld, the editorial team there reviews hundreds of articles published during the previous week. From these articles, one is selected as LitigationWorld Pick of the Week. The article is selected because the editors there believe that it is a must-read for anyone interested in litigation.
 
The article that won this honor was entitled “12 Reasons Litigation Graphics are More Complicated Than You Think.”
 
Many awards that are given out these days are meaningless because marketing can play a role in determining who wins. By contrast, those who win the LitigationWorld Pick of the Week award don't even know they're in the running and cannot influence the editorial team. That’s what makes this award meaningful to us.
 
The winning article, not surprisingly, lists 12 reasons that litigation graphics are more complicated than one might think. Among them: Litigation graphics must be more than merely electronic versions of printed documents; real litigation graphics experts are storytelling experts as well; and litigation graphics experts understand the psychology of a jury and how a litigator can use psychology to his or her advantage.
 
This prize-winning post is only one example. Our blog is full of interesting and useful thoughts about trials, juries and litigation. The American Bar Association recently named A2L's Litigation Consulting Report blog one of the eight best in the litigation industry. Below is a list of the seven articles that LitigationWorld has named Pick of the Week.

  1. 21 Ingenious Ways to Research Your Judge

  2. 12 Reasons Litigation Graphics are More Complicated Than You Think

  3. 16 PowerPoint Litigation Graphics You Won't Believe Are PowerPoint

  4. 10 Things Litigators Can Learn From Newscasters

  5. 10 Ways to Spot Your Jury Foreman

  6. 8 Reasons to be Optimistic About the Litigation Economy

  7. Your Trial Presentation Must Answer: Why Are You Telling Me That?

We're hard at work on writing new articles, and I'm very interested in hearing from you how we can be even better. To that end, if you have questions/ideas about The Litigation Consulting Report blog or about mock trials, litigation graphics for trial/ADR, trial technology/hot-seat operators or litigation advisory services for in-house counsel? Please comment below or write to Alex Brown at brown@A2LC.com. If you would like to subscribe or change how often you are notified about new blog articles articles? Click here.

Other articles that list our top blog posts, discuss A2L accolades or provide a useful directory of how to access information close to your interests include:

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Tags: Economics, Trial Graphics, Litigation Graphics, Trial Presentation, Demonstrative Evidence, Juries, Judges, Awards

A Mixed Litigation Industry Outlook for 2015

Posted by Ken Lopez on Wed, Dec 10, 2014 @ 03:13 PM

 

2015-economic-outlook-litigation-industryby Ken Lopez
Founder/CEO
A2L Consulting

The tree is up, the 2015 strategic plan is done, holiday travel plans are all set, so it must be time for my annual litigation industry economic outlook for 2015. First though, a reminder of why I do this.

I believe that the litigation industry's performance is closely tied to broader economy's performance. This is especially true for big-ticket cases.

As I have done in 2012, 2013, and earlier this year, I create an economic forecast to both exercise my undergraduate degree in economics a bit and force myself to take a hard look at what the coming year will be like for those of us who focus on litigation for a living.

While I can't help paying attention to anecdotal indicators, each year I focus on one leading indicator of economic conditions, ECRI's U.S. Weekly Leading Index. It reliably forecasts economic growth about eight months out into the future.

Big-ticket litigation is largely dominated by large companies who are sophisticated in their monitoring of economic conditions on a day-to-day basis, and it appears that they adjust their litigation spend rather quickly based on changes in the economic climate. When economic conditions are good they file cases, they spend on cases and they tend not to settle cases. When economic conditions are bad or uncertain, they don't file cases with the same fervor, and they do settle cases more quickly.

Truthfully, it's a complicated correlation dollar-wise as it usually takes a couple of good years of economic growth for cases to start being filed in earnest. Since litigation spending increases toward trial, there is also a lag for an upswing on litigation spend.

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Anecdotally, we're seeing cases go to trial that might not have made it to trial a couple of years ago and A2L Consulting continues to grow. However, in just the past month we have seen one of the industry's best-known brands, Trial Graphix, be picked apart and sold yet again (is this the fourth time in five years?). It's not easy going in litigation support, but there is growth for those that deliver great value.

Before turning to the forecast, it's worth addressing what gets reported in the popular press. After all, the press keeps saying jobs are growing at the best rate in decades, and all the jobs lost since the beginning of the 2008 recession have been recovered. Well as much as I'd like to get on a bandwagon of optimism, the facts just don't support it - at the very least, the press is cherry picking the good news.

In reality, labor market participation, the percentage of Americans working, is at the lowest number since 1978, the Jimmy Carter years. Furthermore the jobs that are being created tend to be low-wage part-time positions. Wages, the total amount paid to workers in the U.S., are actually down 23% since just 2008.

Now, here's what the forecast says. When looking at the charts below, in the general, up is good and down is bad. The green line is the forecast of economic growth. The blue is what happened in reality.

ecri-wlgi-litigation-industry-economy

Here's what this chart says. The blue line tells us that economic growth has been positive for all of 2014 (yes, we did see a GNP dip in Q1 as I discussed earlier this year). The green line, the forecast of the future, tells us something ominous. Up until about June, future economic growth looked slow and steady, but that's when that indicator started falling. It's now negative. That means, beginning in about June + 8 months or so, about February 2015, we can expect to see conditions worsen for the broader economy until at least fall 2015.

Might falling oil prices give the economy a boost? Maybe, but those effects lag at least six months.

Here's the good news. Not many people have spare cash in this economy yet. But you know who does? Big companies do. Corporate profits are at their highest levels since the mid-1960s!

So, while the overall outlook for workers and small and medium sized businesses may not be great, those who focus on servicing the needs of big companies will likely be successful in doing so - if they deliver great value. That is where most of A2L's attention will be in 2015, and that is true for most large law firms.

Articles related to the economics of the litigation market, law firm sales, pricing and more on A2L Consulting's site:

Tags: Economics, Litigation Graphics, Litigation Consulting, Litigation Management, Litigation Support, Pricing, Leadership, Midsize Law Firms

Mid-2014 Economic Outlook for the Litigation Industry

Posted by Ken Lopez on Wed, Jun 25, 2014 @ 05:05 PM

 

legal industry economics litigation consultingby Ken Lopez
Founder/CEO
A2L Consulting

Over the past couple of Decembers I've written articles offering an economic forecast for the coming year with a focus on litigation. These writings serve both to spread useful information to the legal industry and to help me to plan A2L's budget for the coming year. I thought a mid-year update might be valuable in these challenging economic times.

One might reasonably ask, if the focus is litigation, why would one look at the economy as a whole? First, there is no reliable litigation spending index that I am aware of, and second, my observation is that big-ticket civil litigation largely tracks the economy. When the economy is growing, litigation spending goes up. When the economy is shrinking or there is economic uncertainty (e.g. terrorist threats, massive changes to entitlement programs, election years etc.), cases settle and litigation spending shrinks.

While there are plenty of exceptions, many of A2L clients are large law firms with large corporations as customers. Large corporations are especially reactive to economic shifts. Indeed, for the most part, they are the economy, with Fortune 500 revenues now roughly equal to 78% of U.S. Gross Domestic Product (important note: not all of these revenues count toward U.S. GDP, such as overseas sales, so the actual percentage of GDP is much lower).

For the past 10 years, I've been watching one composite leading indicator from ECRI that does an excellent job of predicting the economy 6-9 months in the future. Last December, I observed that the U.S. economy was generally in a downtrend and that 2014 would look a lot like 2013 for litigation. That's largely held true unfortunately, and the economic news out today showing a massive Q1 contraction (revised way downward) is simply shocking. Perhaps though, there is a bit to be optimistic about.

Looking first at the bad news, in the first quarter (last quarter), we all saw the economy shrink by a historic 2.9%. To put that into perspective, look at the chart below to see the last few points in time we saw a contraction at or worse than today's level.

gdp contraction chart q1

That's right. The first quarter of 2014 is similar to points in 2009, 1991, 1983 and 1981. Yikes. That's pretty bad. To make matters worse, both the Federal Reserve and the Congressional Budget Office are forecasting painfully lackluster growth in the 2% range for the foreseeable future.

The only bright spots I am seeing are a meaningful uptick in the leading indicators and anecdotal evidence that our litigation practice is busy and looks to be setting up for an even busier 2015. We already have quite a number of mock trials being scheduled in 2014 for 2015 trials. Looking at the charts below, you can begin to see the difference between December's outlook and today's outlook. To quickly understand the charts, know that the green line represents a forecast about 8 months in the future from the date below any point. The blue line represents what actually happened at a given point in time in the economy. Even more simply, up is good, down is bad.

Last December 2013:

litigation market forecast 2014 ecri

Now (June 2014)

June 2014 economic outlook

The takeaway from the leading indicators here is this: In December of 2013, a downturn was forecast to continue (green line, upper chart). That downturn is reflected in the blue line in the lower chart stretching from October 2013 to March 2014. A modest uptick is forecast (green line, lower chart) that appears to run from roughly May 2014 through at least the end of the year. Let's hope that picks up steam.

For litigation, I would say things look slightly better than a year ago and much better than they did six months ago. The Q2 GDP number will be one to watch after it is revised a couple of times. I'm sure it will come out positive initially (they always seem to lately). The question will be whether it is revised to be negative later this year. If so, we would have two consecutive quarters of negative growth - an official recession. If that happens, you can bet Fortune 500s will cut back. They'll likely cut back on litigation modestly based on the Q1 number and wait for good news. If Q2 comes in negative, litigation spending cuts will likely get even deeper.

Articles related to the economics of the litigation market, law firm sales, pricing and more on A2L Consulting's site:

litigation consulting graphics jury trial technology

Tags: Economics, Trial Graphics, Litigation Graphics, Jury Consulting, Mock Trial, Litigation Consulting, Trial Consulting, Pricing

Free E-Book Download: Antitrust Litigation Trial Prep Guidebook - 2nd Edition

Posted by Ken Lopez on Tue, Apr 1, 2014 @ 04:35 PM

 

describe the imageby Ken Lopez
Founder/CEO
A2L Consulting

Antitrust trials are second in frequency only to patent trials for the types of cases A2L Consulting is engaged to support. Indeed, in the past year, we have worked with several Fortune 50 firms in their battles against the recently invigorated U.S. Department of Justice Antitrust Division.

Interestingly, we're not always on the defense in antitrust cases. Sometimes we work in support of private plaintiffs and sometimes we work for the U.S. Department of Justice's Antitrust Division. As a result, we have an excellent perspective on what it takes to be successful leading up to and during an antitrust trial.

The issues in any of the cases we work on usually relate to market power, price fixing or involve Hatch-Waxman ANDA claims. In any of these cases, the evidence most often involves a lot of charts and math that could only appeal to people with a degree in economics (I happen to be one). As a result, like a patent case or like a case involving scientific evidence, an antitrust case requires a lot more trial prep than most cases.

Good trial prep in an antitrust case includes building a meaningful and compelling story, working with the experts to make their complex testimony understandable, and developing demonstrative evidence that is clear and persuasive. None of this is easy, and in my experience some of the best trial lawyers in America struggle with the presentation of antitrust matters at trial.

So, it is in the spirit of sharing what we have learned in nearly 19 years of supporting antitrust cases at A2L that we release, The Antitrust Litigation Guide to Trial Prep and Trial Presentation (2nd Ed.).

This free 141-page book will be useful to new and veteran antitrust litigators alike. Even expert witnesses or those in litigation support will find useful lessons among the 40+ articles compiled in this fine work. We cover topics like:

  • Antitrust, Pharama & Hatach-Waxman Litigation
  • Monopoly Power & Price Fixing
  • 12 Alternative Fee Arrangements We Use and You Could Too
  • 21 Ingenious Ways to Research Your Judge
  • The Top 14 Testimony Tips for Litigators and Expert Witnesses
  • and much more.

I hope you enjoy this book. We really work hard to be thought leaders in our unique area of litigation support that includes litigation graphics, jury consulting, trial technology and visual persuasion services.

This book is completely complimentary with no strings attached. You may download it by clicking here or on the image below.

 

A2L Antitrust Litigation Guide Ebook 2nd Edition

Tags: Economics, Trial Graphics, Litigation Graphics, Trial Presentation, Jury Consulting, Litigation Consulting, E-Book, Trial Preparation, Antitrust Litigation

2 Metrics Showing Litigation Shifting to Midsize Law Firms

Posted by Ken Lopez on Fri, Feb 14, 2014 @ 02:00 PM


rise midsize law firms litigation bigby Ken Lopez
Founder/CEO
A2L Consulting

Last month I published a four-part series about the rising influence of midsize law firms in big-ticket litigation. Major news outlets are reporting on the trend, and we're seeing it play out at A2L. However, new and interesting data about case filings and trials shows just how surprisingly far along midsized law firms are in capturing a large share of the litigation market.

The four articles listed below made up our four-part midsize law firm series last month. In addition to A2L's valuable tips for trying big cases on a midsized budget, the key takeaway was that over the last three years, midsized law firms have doubled the amount of high-stakes litigation they are being hired to run. The articles below go into more detail and offer useful tips for law firms of any size heading to trial.

I write for another blog geared toward litigation support salespeople and e-discovery salespeople. Using LawProspector as a litigation research tool, I am able to see some very clear trends unfolding related to new cases and trials. I discussed these trends in two recent articles.

In an article that analyzed which law firm offices are busy, I focused my study on new case filings over the past 6 months or so. The trends revealed by the data were surprising to me since I've spent the last 20 years watching the top 50 law firms dominate the litigation dockets. Ranked according to the number of cases attorneys were newly involved with (both plaintiff and defense side), these law firm offices listed below are the busiest when it comes to federal cases:

10. Quinn Emanuel's California offices.
9. Wilson Elser's offices in the west, east and south.
8. Bradley Arant's Charlotte and Alabama offices.
7. Alston & Bird's DC, and Atlanta offices.
6. DLA Piper's offices in DC, New York and California.
5. Nelson Mullins' North Carolina offices.
4. Akerman Senterfitt's various Florida offices.
3. Snell & Wilmer's Phoenix and Las Vegas offices.
2. Barnes & Thornburg's Indianapolis office.
1. Baker Donelson's Tennessee offices have more new matters than any other firm in the top 200 law firms.

What I find amazing about this list is how law firms in the 300-750 lawyer range, roughly the top 50-150 law firms ranked by size, are dominating the list. This is the first time I've seen this pattern in my three decades in the litigation support industry.

To confirm whether this data might be a fluke of some sort, I followed up with a second article and a review of trials scheduled over the next year. Sure enough, that same midsize law firm dominance was showing up again.

top 15 litigation law firms to sell to asap

This table lists the top 15 law firms ranked by the number of federal trials their attorneys have scheduled over the next year. After some analysis, the data reveals something remarkable: roughly 60 percent of the federal trials scheduled in the next year are being handled by a midsize law firm.

Further, only three of 15 law firms on this list have more than 1,000 lawyers (roughly the top 25 law firms). Those top 25 law firms collectively have about 45,000 lawyers, and law firms ranked 50-150 by size also have about 45,000 lawyers in total. However, 80 percent of the litigation is going to the second group. This is a tectonic shift compared to the data only a few years ago.

With changes of this magnitude occurring in the litigation industry, we all need to be paying attention. Large law firms need to work on the economics of their firms if they wish to (re)capture the everyday litigation market. Midsize law firms need to learn the techniques used by large law firms to be successful in big litigation. Litigation support firms have to adjust to a whole new audience eager to learn what works best. 

Other articles on our site related to the new normal of the legal industry, the litigation market outlook and the rise of midsize law firms in high-stakes litigation include:

getting value new normal legal economy inhouse counsel lit support

Tags: Economics, Trial Consulting, Litigation Management, Leadership, Marketing, Midsize Law Firms

2014 Economic Forecast for the Litigation & Litigation Support Markets

Posted by Ken Lopez on Tue, Dec 17, 2013 @ 09:30 AM


litigation support economy forecast 2014by Ken Lopez
Founder/CEO
A2L Consulting

When it comes to the economy, we have come so far since 2009 that it's not hard to be a bit optimistic. Of course, measuring from that historic trough can make anyone feel better. The real question is whether the economy is going to continue to improve from where it is now.

I evaluate the economic future not only to exercise my long-ago-earned-economics-degree muscles but to do some serious planning. Since I believe that large-scale litigation spending is closely tied to the economy's overall health and because most of my business life is closely tied to litigation, I watch leading economic indicators quite closely.

Last year at this time, I wrote about my affection for a particular leading indicator. In fifteen years, it has never let me down, as it accurately predicts the economy about 8 months in advance.

ECRI's Weekly Leading Index is a wonderfully simple indicator. When it goes up, it's generally good, and when it goes down, it's normally bad. Unfortunately, I don't like the direction it is headed in now.

At the end of 2012, the indicator was moving in the right direction - up - suggesting economic growth was ahead. That's what we got, although economic growth has been quite modest (only a bit over 2%) in 2013.

Looking at the ECRI chart below, the green line is the weekly FORECASTED economic growth rate looking about 8 months into the future from the date noted on the bottom. For example, the chart says that growth was forecasted to peak late this summer (February plus ~8 months) and that roughly 8 months from November 2013 (summer 2014) we will be experiencing our slowest growth in years. The blue line is the ACTUAL growth rate in real-time.

litigation market forecast 2014 ecri

In trial support, it's been a challenging year. Perhaps the best known firm (that isn't us) in our industry, reportedly laid off half of its staff and was sold yet again. Another big brand is quietly up for sale (also not us), and while we have had some major wins, earned many new clients and we're currently engaged on some of the largest cases in the world, we have not had a record growth year as we have in recent years. Although Citi is reporting optimism today in a subjective survey, my law firm managing partner friends have a similar outlook to mine.

At A2L in 2014, we'll be hiring, we're investing in some new breakthrough products and we expect growth, however I expect that we will be doing all of that in moderation. We will no doubt continue to expand our litigation-focused alternative fee arrangements and participate in even more litigation support preferred vendor (discount) programs.

The dials at the top of this article are a dashboard also from ECRI that summarize the economic growth outlook (green) and the inflation forecast (red). The arrows that are shaded reflect a snapshot of the changes in the forecast over time. You'll note that there is very little movement which suggests rather stagnant conditions similar to what we have right now going forward. It's not that a recession is forecast. Rather, it's just that very moderate growth is forecast.

2014 will likely be a year where most litigators and litigation support firms are working much smarter and just a tiny bit harder.

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8 Reasons to be Optimistic About the Litigation Economy

Posted by Ken Lopez on Thu, Sep 12, 2013 @ 11:45 AM


litigation economy legal economy improving case filings litigation supportby Ken Lopez

Founder/CEO
A2L Consulting

We are all celebrating a painful milestone. It has been five years since the beginning of the financial downturn that would come to be called the great recession of 2008-2009. We recall major Wall Street institutions failing or needing to be rescued, the jobless rate skyrocketing, homes foreclosed, and a general feeling that things were collapsing. We have come a long way since then.

Although we are not back to “normal” yet – since 2008, the main driver of the economy has been government spending – we are able to look with some optimism toward the rest of the decade.

I think sometimes we forget just how rare a recession of this type is. While recessions come on average every seven years, some would say that rate is shortening somewhat. However, a major economic downturn of the magnitude we have experienced is a once every 50 years type of event.

Of course, litigation as an industry has not been immune from this downturn. The legal market has shed tens of thousands of jobs and we have seen a slowdown in litigation activity. In 2012, federal civil case filings fell by 3.7 percent, and anecdotally we saw more cases settle and more pressure to trim costs. This week, we've seen our largest competitor in the litigation consulting market conduct mass layoffs of roughly half of their staff, and last month we saw another West Coast competitor go out of business entirely.

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There’s a great deal of talk of changing business models, and as we have written in this blog on more than one occasion, the “new normal” for law firms is here to stay. Law firms are dealing with a new economic reality, and the halcyon days of, say, 2005, are gone forever.

Sounds pretty gloomy, right? Well I think that things have changed and that the near future is actually quite bright. We've seen a number of reasons to be optimistic. Here are my top eight:

  1. Federal civil case filings are beginning to rise on a nationwide basis. We see this data using LawProspector already, and I expect the Federal Judiciary report for 2013 that closes on September 30 to reflect increased civil case filings relative to 2012.
     
  2. Specific areas are actually quite hot. For example, 2013 patent litigation filings are up 20 percent over the same period last year, and last year they were up 37 percent over the previous year.
     
  3. Case spending is up. Both my conversations with managing partners and my own experience suggests that corporations are investing more in winning cases by using more lawyers, more law firms and more litigation support services.
     
  4. Cases that could settle are headed to trial anyway. During economic downturns, cases that would be relatively easy to win at trial often settle. During economic expansions, even tough cases head to trial. On balance, we're seeing more of the latter than we did even a year ago.
     
  5. Economic activity is up generally. As someone with an economics degree, I am a big fan of leading indicators. Most leading indicators look good for the economy as a whole. Even a majority of managing partners are forecasting growth for next year.
     
  6. Corporate profits are higher than ever. Q2 corporate profits were up 5 percent over the second quarter of 2012 after a scary Q1 decline.
     
  7. Anecdotally we are really really busy. We had a record year last year on a smaller number of cases than the year before. This year, we are seeing the number cases and size of cases in our pipeline increase quite significantly.
     
  8. First-cut services are back in vogue. One of the areas where we are the busiest is in our mock trial, trial consulting, witness prep and jury consulting space. If the economy were going anywhere but up, companies and law firms would not be investing in this type of work.

Of course we are not entirely out of the woods yet. There continue to be almost-daily rumors of law firm layoffs and law firms teetering on the edge of failure. Still I think the future is quite bright and we're seeing more proof of it on a daily basis in our narrow corner of the litigation support market.

 

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Authors

KenLopez resized 152

Ken Lopez founded A2L Consulting in 1995. The firm has since worked with litigators from all major law firms on more than 10,000 cases with over $2 trillion cumulatively at stake.  The A2L team is comprised of psychologists, jury consultants, trial consultants, litigation consultants, attorneys and information designers who provide jury consulting, litigation graphics and trial technology.  Ken Lopez can be reached at lopez@A2LC.com.


tony-klapper-headshot-500x500.jpg 

Tony Klapper joined A2L Consulting after accumulating 20 years of litigation experience while a partner at both Reed Smith and Kirkland & Ellis. Today, he is the Managing Director of Litigation Consulting and General Counsel for A2L Consulting. Tony has significant litigation experience in products liability, toxic tort, employment, financial services, government contract, insurance, and other commercial disputes.  In those matters, he has almost always been the point person for demonstrative evidence and narrative development on his trial teams. Tony can be reached at klapper@a2lc.com.


dr laurie kuslansky jury consultant a2l consulting







Laurie R. Kuslansky, Ph.D., Managing Director, Trial & Jury Consulting, has conducted over 400 mock trials in more than 1,000 litigation engagements over the past 20 years. Dr. Kuslansky's goal is to provide the highest level of personalized client service possible whether one's need involves a mock trial, witness preparation, jury selection or a mock exercise not involving a jury. Dr. Kuslansky can be reached at kuslansky@A2LC.com.

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