Research Trends and Conclusions: Commercial Litigation 2011
With the benefit of over 14 years of research and tens of thousands of votes from clients and private practitioners, Who’s Who Legal takes a closer look at developing trends in the commercial litigation marketplace worldwide.
When analysing our 2010 research a year ago in the introduction to the previous edition of this book, we reflected that the global financial crisis was “beginning to recede”. At the time of writing this was the generally held view around the markets, but in the intervening months the original crisis has been replaced by the spectre of further and potentially greater financial upheaval.
While the exact depth of this new crisis is still to be ascertained, the uncertainty it is generating is proving to have a similar dampening effect on the market. Low levels of confidence, not to mention funding, have meant that the traditional counter-cyclical spike in litigation work that previously accompanied downturns is clearly not going to take place this time round.
In general, clients have become more circumspect, increasingly cost-conscious and are reported to be emphasising renegotiation over litigation. That is not to say that all types of dispute have been silenced; we received reports, in the course of our research, of IP and products related work – particularly in jurisdictions that permit class actions – remaining busy, and other areas such as privacy and energy related claims also cited as busy.
The fallout from the financial crisis has driven up activity in some sectors, either directly or indirectly. Banking disputes and cases related to financial products were often mentioned as sources of work for the world’s leading litigators, as clients look to ameliorate the effects of recent losses. Regulatory reform is also resulting in an increased need for advice and representation, with the newly installed UK Bribery Act and the US Foreign Corrupt Practices Act enforced with great zeal.
We continue to receive reports of a greater focus from clients on alternative fee arrangements, although it was said that this focus is perhaps less on the structure of payment as it is on reduction of the overall total in question. Litigation is an area of practice that lends itself more than many others to conditional fee arrangements, as well as set fee structures and other alternatives.
There have also been moves in many court systems to improve efficiency and reform procedures, with the aim of speeding up the resolution of disputes. In many cases this aim sits alongside an increasing exploration of alternative means of addressing these conflicts, which has had a further effect on the litigation marketplace.
EFFECT OF ALTERNATIVE DISPUTES RESOLUTION
While local courts are still the preferred forum for many types of disputes, we are seeing a growing willingness on the part of international clients to pursue solutions to their conflicts elsewhere. Arbitration is being seen as an increasingly important practice area, and firms are developing their capabilities in this sector around the globe.
The attitude of the litigators we canvassed for this edition to the practice of arbitration varied, with many regarding it as not being a threat to the popularity of litigation as many of the cases settled by such means would not have used a local court system anyway.
However, the growing popularity of arbitration clauses in commercial contracts, when factored alongside an increasing emphasis on mandatory pre-trial mediation procedures, has seen a decrease in the number of cases reaching court. As such, many of the world’s leading commercial litigation practices are expanding their expertise to these alternative disputes resolution (ADR) methods, to continue offering their clients the most effective and appropriate counsel. There were other interviewees who preferred to emphasise the growing arbitration practices of many of the litigation lawyers at their firm and the combined focus of their disputes practices.
This trend can be seen in the results of the international research for our Litigation and Arbitration publications over the last five years.
Charted over the past five editions, the number of world-class litigators we identified spiked in 2009, but since then has fallen away. This year, for the first time since we began covering arbitration in 1999, the number of arbitration specialists identified in the course of our research outweighs the total number of litigators.
This year has also seen the first edition of The International Who’s Who of Commercial Mediation, a response to the growing demand we have received for research to identify the leading experts in this ADR method from around the world. With this third strand included, the current results of our dispute resolution findings are as follows:
Each colour represents a separate country, with the US the largest jurisdiction for each practice area. As mentioned above, Arbitration is now the most populated area, and while the first edition of our Mediation book is by far the smallest, its contingent of 188 mediators across 37 jurisdictions bears direct comparison with the first edition of our Arbitration book a decade ago, which listed 253 arbitrators in 41 countries.
Furthermore, it is interesting to note that while our Arbitration book has more than doubled in size in the course of the last 10 years – reflecting the explosion in its popularity and the number of specialists earning international recognition around the world – this 2011 edition of our Litigation book covers 19 more countries than its first edition predecessor in 2000, but actually includes six fewer lawyers in total.
It is also instructive to chart the relationship between the two publications in terms of the number of lawyers listed in both areas. In our 2008 edition, 59 of the practitioners (or just over 13 per cent of the total individuals) who were selected in our Arbitration publication were also selected as leading litigators in their jurisdictions in the corresponding edition.
However, in every year since that proportion has fallen – indeed the total number of joint nominees has decreased each year since 2009 despite the increase in lawyers listed overall – so that this year the figure stands at 53 lawyers who can be considered expert in both arbitration and litigation according to our research; only 10 per cent of the total number of arbitration experts we select.
This demonstrates the increasing distinction between the practices, and the divergence in skill sets that each area requires. Increasingly we are seeing the world’s leading disputes experts in each area recognised for their litigation skills or their arbitration profile, but not for both. It is becoming harder, especially in the most established jurisdictions, to lead the field in both litigation and arbitration expertise.
LEADING FIRMS
Over the past five editions several firms have consistently performed well in terms of number of lawyers selected for inclusion. Clifford Chance leads this year’s research with 12 nominees, and has been the most highly represented firm in each edition since 2009. It earns a presence in seven jurisdictions in this year’s book, and it is interesting to note that the majority of the leading firms above – with the exception of Paul Weiss, which is consistently recognised for the strength of its New York office – have increased the geographical spread of their presence over the past five years.
This reflects the increasing demand from clients for their law firms to be able to provide a single source of representation across multiple jurisdictions, and the response from the firms as they cultivate – and are recognised for – local expertise in a growing number of countries. The increasing number of law firm mergers the market has seen in recent months is another reflection of this desire to offer a market leading presence in a wider range of jurisdictions, and we are also seeing a markedly higher number of lateral moves than in recent years.
These are just some of the factors that are shaping the current commercial litigation landscape. The financial constraints most clients are feeling are limiting them to the pursuit of only the most business-critical claims, and there is some suggestion that their focus is increasingly on alternative methods of dispute resolution. Taken together, these are tough times for commercial litigators, but all the individuals selected for inclusion in this edition are recognised for their market-leading expertise, and will continue to be sought after for their skills and effectiveness in court.