Companies Report Increasing Volume of Legal Disputes and Rising Use of Outside Counsel; Continued Expansion of In-House Legal Departments, According to AlixPartners' Survey of Corporate Counsel and Corporate Compliance Officers

NEW YORK, Oct. 16, 2014 (GLOBE NEWSWIRE) -- A significant number of U.S. and European corporate counsel and corporate compliance officers reported an increase in legal disputes versus the prior 12 months, according to a survey released today by AlixPartners, the global business-advisory firm. Among the survey respondents, 32% said their companies experienced an increase in legal disputes and an additional 56% stated that the volume stayed the same. Only 12% of respondents indicated a decline.

When asked to categorize the legal disputes encountered by their organizations, respondents identified contract (58% of respondents), employment (50%), intellectual property or patent infringement (33%), accounting and financial disclosures (19%) and insurance matters (19%) as the five most frequent. Notably, 8% of respondents stated that they had been involved in "bet-the-company" legal disputes in the 12 months prior to this survey.

"We continue to see a broad array of commercial disputes today that involve products, cross-border issues or those tied to transactions that require considerable attention from senior management and general counsel in order to be dealt with appropriately," said Harvey Kelly, global leader of AlixPartners' Financial Advisory Services unit. "With litigation and regulatory-enforcement activities increasing globally, companies are placing a greater emphasis on risk avoidance and mitigation. The compliance function is increasingly important."

In Europe, More Companies in Cross-Border Disputes

According to the survey, European companies have seen more cross-border disputes and arbitration than U.S. companies: 35% of respondents at European companies said disputes in the preceding 12 months involved cross-border issues, compared with 15% for those at U.S. companies. Meanwhile, 33% of European respondents said they were involved in one or more arbitrations during the prior 12 months, compared with 24% for U.S. companies.

"We've been seeing a steady increase in the use of international arbitration throughout EMEA, which is evident in our survey results," said Andrew Grantham, managing director at AlixPartners and leader of the firm's Financial Advisory Services Practice in EMEA. "Cross-border disputes in general have been increasing, which has also created more demand for electronic disclosure, and we're seeing confirmation of these trends in our survey."
 
Managing Costs, Mitigating Risk and the Role of the General Counsel

While companies may be closely managing their legal spending, the use of legal resources has increased for both U.S. and European companies, according to the poll. Thirty-four percent reported an increase in the size of in-house litigation departments versus the previous 12 months. Simultaneously, 24% of respondents said their usage of outside firms had increased.
 
With regulatory investigations and litigation threats mounting for both regions, corporate legal departments have been focusing on risk-management techniques that emphasize prevention and early detection of potential problems. In particular, the survey suggests that companies have prioritized educational and training programs (71% of respondents picked that category) and identification of possible deficiencies in their existing compliance programs to reduce litigation-related risks (56%).
 
"General counsel and compliance officers are becoming more focused on risk across the enterprise," said Kelly. "As a result, both are working more closely with their companies' management to manage uncertainty by establishing programs that can prepare companies for the unexpected. This may in part be due to the nature of risk and potential litigation today, which is continually evolving as companies become more global and seek to find growth through new ventures, business relationships and investments overseas."

About the Survey

The AlixPartners Litigation and Corporate Compliance Survey polled general counsel and compliance officers at U.S. and European companies with annual revenues of $250 million or more. Industries represented included financial services, information technology, energy, retail, telecommunications, consumer products, automotive, healthcare, life sciences, aerospace, construction, chemicals, agriculture and retail, among others. To receive a complimentary copy of this survey, e-mail: results@alixpartners.com.

About AlixPartners

AlixPartners is a leading global business-advisory firm of results-oriented professionals who specialize in creating value and restoring performance at every stage of the business lifecycle. We thrive on our ability to make a difference in high-impact situations and deliver sustainable, bottom-line results. The firm's expertise covers a wide range of businesses and industries whether they are healthy, challenged or distressed. Since 1981, we have taken a unique, small-team, action-oriented approach to helping corporate boards and management, law firms, investment banks and investors respond to critical business issues. For more information, visit www.alixpartners.com.