In-house counsel are bracing for a jump in litigation stemming from stricter government regulations, according to a survey of law departments released today.
Fulbright & Jaworski polled 275 in-house counsel in the United States, and found banking, health care and energy companies are especially concerned about the legal fall-out from heightened regulations.
Given Congress this year passed sweeping health care reform legislation and overhauled the financial services industry, and that major climate change legislation is pending, the result is not entirely surprising.
According to the survey, 48% of financial services respondents, 42% of energy respondents, and 39% of health care respondents list regulatory as the type of action of most concern to their companies. Looking ahead, one-third of U.S. respondents expect the number of regulatory proceedings their companies face to increase in the coming year, compared to only 9% last year.
"With reform in two major industries - financial services and health care - and the possibility of greater regulation of offshore petroleum production, regulatory concerns are front-and-center in the minds of in-house legal counsel," said Stephen Dillard, the head of Fulbright's global disputes practice, in a statement. "Even at small-cap companies, regulatory investigations have nearly doubled."
Still, fewer companies added outside counsel to help with government or regulatory investigations this year compared to last. The survey found that 43% of U.S. respondents retained counsel for such matters, compared to 47% last year.
As for which agencies are causing the most concern, the survey noted that the Justice Department has been active in investigating manufacturing and healthcare, and to a lesser extent, energy companies, while the Securities and Exchange Commission has focused on healthcare, financial services and energy, and the Internal Revenue Service has gone after engineering companies. Companies most often hired outside counsel to help with investigations by the Environmental Protection Agency.
This is the seventh year Fulbright has conducted the survey, which also included additional results for 128 in-house lawyers in the United Kingdom. Overall, the survey found that litigation has actually been on a slow rise since a reported decline in new filings in 2006 and 2007, as Alison Frankel reports in sibling publication AmLaw Litigation Daily.