Transportation & supply chain sector perspectives on litigation and arbitration

Senior legal and finance leaders in construction and mining expect the biggest increases in litigation spend in the next five years, with pharma and food close behind.

Interestingly, the industries in which leaders anticipate the largest increases in future litigation spend do not currently have the largest budgets, suggesting a significant shift in litigation priorities among some industries.

Those in pharma and life sciences currently say they have the biggest budgets, followed by energy and mining. Senior legal and finance leaders in construction claim the lowest current budgets.

Senior leaders in pharma and healthcare are most likely to say that hourly fees have increased in the last 15 years and to predict an increase in the next 15 years. By contrast, those in other industries expect hourly fees to decline.

Pharma, construction, transportation and consumer legal and finance leaders are more likely to say they could reallocate $50 million from litigation to elsewhere in the business over the next five years if they financed litigation and arbitration, indicating even greater understanding of the impact of legal finance in these industries.

Legal and finance leaders in retail and consumer, sectors pressured by narrow profit margins and a decline in customer spending, are more likely to seek higher increases in discounted rates from law firms, indicating greater need to manage legal costs.

Healthcare, retail and consumer leaders are more likely to say legal finance plays a significant role in reducing overall litigation and legal costs for businesses. These sectors benefit more than the average from utilizing legal finance as a cost-saving measure.

Leaders in healthcare, retail and consumer are also comparatively likely to say that given steep litigation costs even large companies can benefit from minimizing the impact of litigation on the P&L.

Senior legal and finance leaders in construction, retail, transportation and food are more likely to say drastic steps are needed to manage legal costs, including moving away from the billable hour, limiting outside firms and receiving more innovation from outside counsel.

Respondents across sectors—especially construction, pharma, retail and food—agree that GCs and CFOs should champion the use of legal finance to better manage legal costs.

Respondents in construction and mining place higher than average value on using monetization financing to unlock capital for funding other areas of the business, where companies can invest in revenue-generating activities.

Senior legal and finance leaders in manufacturing, pharma and food place higher than average value on using legal finance to conserve capital for funding other needs within the business, where business leaders can generate higher ROI than spending out-of-pocket on lawyers.

Leaders across sectors agree that GCs and CFOs should champion the use of legal finance to optimize the value of their litigation and arbitration assets, with the highest levels of agreement found among leaders in food, retail, pharma and construction.

Leaders in legal and finance at companies in the retail, pharma and healthcare sectors plan to allocate the highest percentage of legal department budgets to AI in the next year.

Respondents in the consumer sector are especially likely to value how legal finance helps companies conserve capital for funding innovation in other areas of the business.

Healthcare, retail, construction, manufacturing and pharma leaders are more likely to advocate increased innovation by legal departments as a value driver for business in the next 15 years.

Leaders in mining, energy, transportation and food are most likely to say legal finance will become common at their organizations in the next 15 years.

Increased use of legal finance in the next 15 years in these and other sectors is consistent with broader increases in the adoption and prevalence of legal finance as a strategic tool for business.