JULY 2013

Financial
Advisory
Services

Litigation and
Corporate Compliance Survey

ompanies are facing more and more legal

disputes and as a result, are increasing the
size of their legal departments while
focusing on a variety of alternative means
of dealing with potential litigation, according to
AlixPartners' Litigation and Corporate Compliance
Survey. As such lawsuits grow more costly and more
complex, companies have begun to reassess their
compliance programs and implement new tools and
processes that can reduce litigation-related risks.
Litigationand Costson the Rise
Amid tighter regulations and more and more
regulatory investigations, a majority of executives (51%)
say their companies increased the amount of spending
on litigation during the past 12 months; 36% say the
number of commercial disputes their companies have
been involved in has risen.
According to the survey, a surprising one in 10
companies has been involved in bet-the-company
litigation during the past 12 months, underscoring the

OVER THE LAST 12 MONTHS,

HAS YOUR SPENDING ON LITIGATION:
42%
39%

9%

9%
1%

Increased
significantly

Increased
slightly

Stayed
the same

Decreased
slightly

Decreased
significantly

threat that legal disputes pose. Not only does litigation

result in significant legal costs, but it may also present a
major distraction for the managers involved. The survey
found that the most common types of disputes involve
contracts (89%) or intellectual property matters such as
patent infringement (59%) or are product related (45%).
Of the companies reporting increases in disputes, 83%
say their litigation costs rose over the past 12 months.

The AlixPartners Litigation and Corporate Compliance Survey was conducted in December 2012. It polled general counsel about their companies frequency and nature of
commercial disputes, expenditures, and approaches undertaken to deal with litigation, as well as strategies for addressing litigation-related risk. The survey group consisted of
general counsel at US-based companies with annual revenues of $250 million or more.

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ALIXPARTNERS LITIGATION AND CORPORATE COMPLIANCE SURVEY

PLEASE INDICATE THE TYPE(S) OF COMMERCIAL DISPUTES YOUR ORGANIZATION HAS BEEN INVOLVED
IN OVER THE PAST 12 MONTHS:
Contract

89%

Intellectual property or patent infringement

59%

Product related

45%

Class action

41%

Securities

23%

E-discovery

22%

Bankruptcy

21%

Accounting/financial reporting/disclosure
Antitrust
Other

17%
12%
9%

Note: Multiple selection allowed, totals will equal more than 100%

Litigation Departments Grow Despite the Need

to Control Costs
Managing litigation costs remains a priority in
legal departments at many companies; 89% of
respondents say theyre more likely to settle a case
than face a trial. According to the survey, companies
are reducing litigation costs primarily by retaining
more work in-house. Other cost-conscious tactics
include alternative dispute resolution and alternative
fee arrangements.
However, the survey found that only 9% report a
decrease in the size of their litigation departments. It is

also notable that although companies are handling

more of their legal work on their own, they continue to
lean heavily on outside law firms (25% say usage rose),
particularly in such specialized matters as mergers and
acquisitions (M&A) and regulatory investigations.
Rethinking Compliance and Legal Risk
Based on the survey, new whistleblower legislation
has encouraged many companies to evaluate their
existing policies related to internal compliance and
risk management. The survey found that a majority
(84%)with an eye toward identifying potential
gapshave increased the number of compliance

DURING THE PAST 12 MONTHS, HAVE YOU RETAINED OUTSIDE COUNSEL IN CONNECTION WITH:
M&A or other transactions

60%

Regulatory investigations

60%

Internal investigations

34%

Other

18%

Foreign Corrupt Practices Act

15%

Whistleblower allegations

15%

Cross-border investigations
Other corruption

12%
3%

Note: Multiple selection allowed, totals will equal more than 100%

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ALIXPARTNERS LITIGATION AND CORPORATE COMPLIANCE SURVEY

WHICH OF THE FOLLOWING STEPS IS YOUR COMPANY TAKING TO REDUCE THE RISK OF POTENTIAL LITIGATION?
Increasing reviews of existing compliance
programs and identifying gaps

84%

Implementing tools to mitigate risk

64%

Monitoring and enforcing document

retention policies

63%

Increasing the number of internal and external

compliance audits and documenting results

53%

Increasing due diligence procedures

52%

Developing a litigation response plan

Other

25%
1%

Note: Multiple selection allowed, totals will equal more than 100%

reviews they conduct. To reduce risk, other

respondents cite the implementation of technology
tools and of policies aimed at monitoring and
reinforcing document retention.
Conclusion
Legal and compliance departments seem to be
allocating increasing amounts of resources to manage

potential litigation and commercial disputes that

can have far-reaching implications for companies and
their long-term business objectives. Given the
significant costs associated with such lawsuits,
companies and their counsel face important decisions
related to staffing, fee management, and the
development of the best strategies and tools for
resolving disputes.

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ALIXPARTNERS LITIGATION AND CORPORATE COMPLIANCE SURVEY

FOR MORE INFORMATION, PLEASE CONTACT:

ABOUT ALIXPARTNERS

Louis Dudney
Managing Director
ldudney@alixpartners.com
+1 (312) 551-3269

AlixPartners conducts a broad range of surveys

and research in industries around the globe.
To learn more about our publications, please visit
www.alixpartners.com/en/whatwethink.aspx.
AlixPartners, LLP, is a global business advisory firm
offering comprehensive services in four major areas:
enterprise improvement, turnaround and restructuring,
financial advisory services, and information management services. The firm was founded in 1981 and can
be found on the Web at www.alixpartners.com.

The opinions expressed are those of the authors and do not necessarily reflect the views of AlixPartners, LLP, or its affiliates or any of its or their respective
other professionals or clients.

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