Texas Business Litigation Firms Will Be Busier in 2012

(HOUSTON) OCTOBER 24 — Corporations in Texas and across the United States expect increased legal needs in 2012 due to intensified governmental regulatory oversight in the year ahead, according to a study to be released Tuesday.

However, business litigators in Texas are not as likely to benefit as much financially as their counterparts in other regions.

Fulbright & Jaworski’s seventh annual survey of corporate general counsels found that business litigation in Texas during the past year hit a plateau while it declined slightly nationally after three consecutive years of significant increases.

The survey — titled Litigation Trends 2011 — found that 81 percent of Texas businesses were sued at least once during the past year, exactly the same number as one year ago. More than 41 percent of companies in the state filed their own lawsuits against other businesses, a decline of 10 percent from a year earlier.

However, 86 percent of corporations in the state expect their legal disputes will grow or remain the same in 2012.

While the Texas litigation trends are similar to statistics for other regions of the country, the survey shows a huge disparity in the legal fees paid by Texas businesses versus companies in the rest of the U.S.

Nationally, the median business in the survey saw its annual budgets to pay outside legal counsel in litigation matters jump from $1 million to $1.4 million. However, Texas businesses report the money they paid their lawyers increased less than one-half of one percent, to $889,000 a year, according to the survey.

One-half of Texas corporations with market caps of at least $100 million spent $1 million or more in legal costs in 2011.

The Fulbright survey cites two primary factors in the expected increase in business litigation: a jump in contract disputes between companies and an expansion of government regulatory and enforcement actions.

“Energy, financials and healthcare have seen a significant increase in regulatory enforcement actions, which results in additional regulatory proceedings and litigation,” says Fulbright partner Jonathan Skidmore, who heads the firm’s litigation practice in Dallas.

More than 55 percent of Texas companies reportedly hired outside lawyers to work on government or regulatory investigations during the past year – a jump from 33% in 2010, the study reported.

“What jumps out at me the most about our survey is that litigation is not growing as quickly as you would expect in these tough economic times,” says Mr. Skidmore, noting that business litigation, especially contract disputes between business partners, usually increase during financial downturns.

Read the full report HERE.

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