Commercial Litigation is on a Downswing—But These Firms Are Coming Out on Top
Your suspicions are confirmed: commercial litigation has been on the decline for the last eight years.In its first report analyzing commercial…
August 04, 2017 at 07:18 PM
4 minute read
The original version of this story was published on Law.com
Your suspicions are confirmed: commercial litigation has been on the decline for the last eight years.
In its first report analyzing commercial litigation trends, legal analytics expert Lex Machina found the number of federal lawsuits between two or more business entities for breach of contract and business torts has steadily dropped since 2009.
Of this shrinking pie, Greenberg Traurig has grabbed the biggest share. Over the last eight and a half years, firm lawyers defended more commercial litigation cases (401) than any other firm, and also filed more commercial disputes on behalf of plaintiffs (333).
In second place on the defense side was DLA Piper, with 299 cases, followed by Reed Smith (280 cases) and Morgan, Lewis & Bockius (277).
However, the report indicates that Morgan Lewis is on a roll. If the time frame is limited to cases filed from 2016 to the present, the firm leads the pack with 57. Morgan Lewis has grown from about 1,300 lawyers in 2009 to 2,000 today, boosted in part by a mass lateral hire from Bingham McCutcheon.
Also notable: Using the more recent time frame, DLA Piper falls from second place to number 15.
On the plaintiffs side, Doniger Burroughs–which bills itself as “California's premier fashion, art, entertainment, and technology law boutique”—was counsel in the second-most cases, behind Greenberg Traurig. The firm has represented textile pattern companies such as Star Fabrics and L.A. Printex in copyright cases that are counted by Lex Machina because they also include commercial claims.
Third place on the plaintiffs side goes to Baker, Donelson, Bearman, Caldwell & Berkowitz, followed by Faegre Baker Daniels.
Lex Machina's data comes from Pacer, combined with other data extracted from individual documents by the company's system. Key aspects of the data are “either human-reviewed or hand-coded by a dedicated team of attorneys to ensure accuracy,” according to the company.
The report includes a graph of cases filed by year, and it points one way: down—from 7,809 cases in 2009 to 5,696 in 2016.
Why the drop? Lex Machina Associate General Counsel Brian Howard doesn't offer any definitive conclusions, but in a webcast he speculated that “in the wake of the recession of 2009, there may be a lot more disputes about contracts, a lot more breach of contract accusations than we see in a relatively healthy economic environment … in 2016.”
The largest commercial plaintiff is the Federal Deposit Insurance Corp., which was responsible for filing 225 cases. (Side note—here's one indication that the government agency is a frequent litigant. On its website is a 58-page “Outside Counsel Desk Book,”which spells out everything from whether you can publicly list the FDIC as a client (yes, but you can't say you have been “approved” as outside counsel) to expenses—$.08 per page for copying, and heads up, they won't pay for “excessive time spent in 'file review'.”)
Most of the other top plaintiffs are large banks, financial services companies, or insurance companies. The number two plaintiff is Lehman Brothers Holdings, followed by Xerox Corp., Suntrust Mortgage and Travelers Casualty and Surety.
Since 2016, Forward Financing has topped the list of plaintiffs, with 38 cases. The company offers business loans of up to $300,000, which it says take 10 minutes to apply for and are approved within an hour—no great stretch of imagination to see how this could beget litigation.
Who gets sued the most? That would be Travelers—and that's without counting cases that involve insurance companies litigating contribution or indemnity claims. Number two is Liberty Mutual Insurance Co., followed by Bank of America and Wells Fargo.
Median damages were $224,000 in 2016, Lex Machina found.
The full report is available with registration here.
Contact Jenna Greene at [email protected]. On Twitter @jgreenejenna.
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