GLOBAL-WIDE: An Introduction to Litigation Services

Navigating Litigation Trends in 2024 

Introduction 

The legal profession is bracing itself for heightened complexity in 2024, amid global unrest, political upheaval, and economic uncertainty. This year will be marked by increased litigation and government inquiries across sectors, reflecting new regulatory frameworks and other trends. IPO litigation is on the rise after a slowdown during the pandemic, alongside an uptick in IP disputes fueled by emerging technologies. COVID-19 continues to generate employment disputes, and recent global supply chain challenges are compounding contract and liability issues.

This article will focus on additional trends which corporate litigation departments will need to contend with over the course of this year, and how operational readiness for litigation and strategically sourcing targeted legal work related to these changes can help legal leaders run their departments efficiently while weathering the storm, ultimately protecting their business stakeholders.

Environmental, Social, and Governance Regulations

ESG regulations have gained momentum globally in response to escalating environmental challenges, social inequality, and corporate governance scandals. These regulations cover various issues such as climate change, diversity and inclusion, labor practices, human rights, and ethical business conduct. Regulatory bodies have introduced new laws to enforce ESG practices, aiming to enhance transparency and accountability.

Corporations now face heightened scrutiny over their ESG practices, resulting in increased litigation as stakeholders hold them accountable for environmental and social impacts. Shareholders, consumers, employees, and communities may file claims for alleged breaches of ESG commitments or failures to address these risks adequately (greenwashing lawsuits, for example).

Regulatory inquiries into ESG practices involve extensive data requests to assess compliance with ESG regulations, including disclosures on environmental impact, diversity initiatives, supply chain practices, and corporate governance, all of which strain put a strain on resources and legal department budgets.

New EU Regulations 

The EU is introducing major regulatory changes affecting organizations doing business in Europe. First, the EU AI Act is a comprehensive new regulatory framework aimed at governing the development and deployment of AI systems. Expected to become law in 2024, the AI Act will impose obligations on companies utilizing AI, including requirements for transparency, accountability, and human oversight.

Legal department leaders should be aware of the Act's effect on AI-based services and products, necessitating compliance with strict standards to ensure ethical and lawful AI deployment; repapering critical contracts with suppliers and customers to account for the Act’s new standards (not unlike what was required when the EU’s General Data Protection Regulation (GDPR) arrived in 2018) will therefore need to be factored into the workload of global legal departments in the near future as a result.

Secondly, the EU's new Directive on Representative Actions will enhance consumer rights by enabling qualified parties to bring collective actions on behalf of consumers across EU member states, against companies doing business in the EU. Businesses must prepare for heightened litigation volume, given that class actions will be a new form of relief in many jurisdictions, and adopt compliance measures in order to defend themselves against potential legal challenges resulting from this directive.

Financial Regulatory Enforcement 

In the financial services industry, regulations related to transparency, market manipulation, and data security continue to push legal departments to put tighter controls on employee behavior and data protection measures.

Despite being enacted over 13 years ago, the Dodd-Frank Act remains fundamental in promoting financial stability and consumer protection. Dodd-Frank and its progeny (including similar US state, federal, and global regulations, as well as the creation of the CFPB) have created several new enforcement mechanisms, with agencies like the SEC and CFTC maintaining a sharp focus on oversight and accountability.

One such requirement is proper retention and production of electronic communications related to financial transactions, client orders/communications, market positions, investment recommendations, and other relevant topics, regardless of channel (including emails, instant messages, recorded phone calls, SMS/text/WhatsApp messages, social media posts, and even ephemeral messaging applications). In light of this, litigation departments must work closely with compliance and enterprise information governance stakeholders to not only ensure ready access to relevant communications to comply with disclosure obligations, but also to monitor and potentially provide training to employees in order to keep relevant communications restricted to firm-governed channels. The SEC and CFTC are actively penalizing firms which are unable to show sufficient monitoring and other compliance processes related to ungoverned “off-channel” communications, to the tune of hundreds of millions of dollars in the last year alone.

Additionally, market misconduct investigations by financial regulators can trigger document production deadlines as short as a few days. Therefore, streamlining access to critical data sources and developing response plans and dawn raid playbooks must be addressed in advance by litigation departments, again in partnership with record retention, compliance, data privacy, external counsel, and other stakeholders.

Response timelines are also a major feature of the new cybersecurity regulations issued by the New York Department of Financial Services in late 2023. Parties have only 72 hours to provide notice after a qualifying breach event, further substantiating efforts to put data access provisions and resources in place to review critical information and notify relevant parties within an extraordinarily tight window of time.

Finally, recent cybersecurity regulations and data protection regulations such as the GDPR, the California Consumer Privacy Act (CCPA) and its successor, the California Privacy Rights Act (CPRA), frequently require legal departments across all sectors to work with their businesses to update contract terms with third parties in order to remain compliant with new obligations, or else face heightened litigation and regulatory risks.

Operationalising Sound Legal Processes with Alternative Legal Service Providers (ALSPs)

Confronting each of these issues requires litigation department leaders to use all of the tools at their disposal in order to adhere to their budgets while serving their clients as effectively as possible. ALSPs such as legal managed services firms can help with these challenges by bringing legal departments the following benefits:

Scale and Flexibility:

Using the right mix of internal and external talent to meet litigation objectives while maintaining budget discipline.

• Rather than increasing headcount, litigation departments can rely on ALSPs to provide teams of dedicated resources with years of experience that can be scaled up or down in accordance with the workload.

Process Rigor and Predictability:

Crafting auditable, defensible procedures and consistently measuring outcomes in order to make litigation less reactive.

• While litigation and regulatory response can often feel like fire-fighting, putting the right repeatable workflows, teams, and data analytics techniques in place will yield trends, patterns, and other business intelligence that can be used to not only speed response time and improve results, but also more accurately predict litigation costs year on year.

Technology Expertise:

Ensuring that technology is being properly leveraged to speed up litigation workflows.

• As the industry’s “superusers” of available legal technology tools on the market, ALSPs bring a valuable external point of view and can spot low-hanging fruit for modernization, in addition to assisting with change management, training, implementation, and other tasks.

More specifically, reputable ALSPs can help with tasks such as the following:

Review and Administration:

Putting repeatable, auditable document review strategies, dedicated teams, data maps, and workflows in place, with the ability to scale quickly and use technology to keep costs at a minimum.

• This applies not only to litigation/discovery review and regulatory investigations, but also privacy and cyber breach events. ALSPs can also support litigation administration and matter management tasks such as case intake, discovery requests, legal hold management, and summarization needs, as well as mass contract repapering events (i.e. GDPR and LIBOR), and other rapid response situations.

Business Strategy and Documentation:

Creating necessary KPIs, metrics, reporting mechanisms, and business procedures to make legal processes operate with the same rigor and transparency as business processes.

• Includes budget creation and adherence, and mapping tasks to appropriate resources in order to ensure that attorneys are consistently focused on strategic, high-value tasks.

Technology Implementation:

When appropriate, applying the right tools with appropriate controls to legal processes ripe for digital transformation.

• Technology-assisted review (TAR), robotic process automation, and other strategies are now standard tools of the trade for legal departments, and ALSPs are well-positioned to help litigation stakeholders work with their partners to replace antiquated software and processes.

Conclusion 

Litigation in 2024 presents a series of complicated hurdles, and as new trends emerge and regulatory frameworks evolve, ALSPs can offer vital scalability and support to litigators and their outside counsel. Their expertise in operationalizing legal processes and implementing innovative technology solutions can help to ensure cost discipline, speed, and defensibility. Looking ahead, the tailored strategies and efficient resource allocation that ALSPs offer will be integral to litigation departments, empowering them to maneuver through a quickly changing legal landscape with confidence and resilience.