3 in 4 GCs expect litigation to increase—and most
expect economic climate to impact legal activity and lead to new
tools and thinking
NEW
YORK, June 22, 2023 /PRNewswire/ -- Burford
Capital, the leading global finance and asset management firm
focused on law, today releases new independent research on how
in-house lawyers are adjusting their strategies in a period of
sustained uncertainty. Businesses are seeking to manage risks and
costs, and in turn, legal departments—and the outside law firms
that work with them—have the opportunity to position themselves as
part of the solution, with legal finance expected to play a
role.
To better understand how macroeconomic trends impact senior
in-house lawyers' thinking about litigation, managing risk and
their expectations for their law firm partners, Burford
commissioned independent research that was conducted via extensive
one-on-one interviews with 66 GCs, heads of litigation and other
senior lawyers responsible for litigation at companies in the US,
Europe, Asia and Australia.
Nearly three in four (74%) senior in-house lawyers expect to see
an increase in the volume of disputes over the next two years due
to the current geopolitical, economic and regulatory environment.
Four in five (80%) say the current economic uncertainty will have
knock-on effects for the legal department. Not surprisingly, a
solid majority (62%) expect their law firms to offer more cost and
risk-sharing solutions, and over half (51%) expect their firms to
be knowledgeable about legal finance.
Christopher Bogart, CEO of
Burford Capital, said: "We at Burford have been at the
forefront of legal finance since 2009, working with lawyers in good
and bad economic times. What remains constant is that in-house
lawyers are always looking for ways to maximize corporate value and
share risk. Burford's latest research confirms that legal finance
has taken on greater importance for businesses, especially as
uncertainty in the global economy remains. We stand ready to
partner with clients to solve their pressing needs, and to equip
their outside counsel to be as nimble and innovative as their
clients expect."
Key findings from the research include:
- The economy is increasing the volume and potential budget
challenges of commercial litigation and arbitration.
-
- Senior in-house lawyers expect to see an increase in the
frequency of commercial disputes in the next two years, and the
economy is exacerbating the challenges in-house lawyers face in
paying for litigation and arbitration.
- Cost causes some businesses to forgo meritorious claims and
awards, while others are becoming more proactive in safeguarding
claims as valuable business assets.
-
- "[I]n an economic downturn, we may not be as motivated to
pursue some litigation or transactional matters without creative
billing options. Law firms want to be sticky with their clients,
and companies are increasingly narrowing down who they work with to
add more favorable terms with a select group of
firms," said an associate general counsel of a media and
entertainment corporation.
- GCs believe it is important for the legal department to show
it can not only manage costs, but also add value to the
business.
-
- Cash flow and liquidity remain very important factors for GCs
when they consider pursuing meritorious claims.
- While GCs don't use quantitative financial modeling of
commercial claims, most say it would be valuable to be able to
predict potential returns.
- The availability of legal finance increasingly plays a role in
deciding whether or not to pursue meritorious litigation or
arbitration claims.
-
- "[Legal finance] gave the CFO the opportunity to time
recoveries as he needed them and use that funding to invest in the
company," said a general counsel of a global food and
beverage company.
- "I have explored the use of legal finance and would do so
again. The liquidity aspect is a big needle-mover for many
companies, especially because it could provoke a settlement
earlier, bring in money earlier and de-risk
litigation," said corporate counsel and director of a
global retail corporation.
- GCs expect more financial innovation from outside
counsel.
-
- GCs expect their law firms to offer more cost and risk-sharing
solutions, particularly in a down economy, which also means that
law firms are expected to be knowledgeable about legal
finance.
-
- "I want my outside counsel to be aware of and advise on
every option available to us in setting a strategy," said
a chief litigation counsel of a manufacturing corporation.
The 2023 GC Survey can be downloaded on Burford's
website. Extensive one-on-one interviews were conducted by phone
between March and May 2023 by Ari
Kaplan Advisors.
About Burford Capital
Burford Capital is the leading global finance and asset
management firm focused on law. Its businesses
include litigation finance and risk
management, asset recovery and a wide range of legal
finance and advisory activities. Burford is publicly traded on the
New York Stock Exchange (NYSE: BUR) and the London Stock Exchange
(LSE: BUR), and it works with companies and law firms around the
world from its offices in New
York, London, Chicago, Washington,
DC, Singapore,
Dubai, Sydney and Hong
Kong.
For more information, please
visit www.burfordcapital.com.
This announcement does not constitute an offer to sell or
the solicitation of an offer to buy any ordinary shares or other
securities of Burford.
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SOURCE Burford Capital