Law practice planning is vital to law firm growth. For lawyers, knowing the litigation trends impacting their practice areas can enhance strategic law practice planning and business development decisions. From identifying lucrative practice areas, to implementing associate career development planning, to managing reductions in staff based on downturns in certain practice areas, litigation trends can equip firms with the insights necessary to make data-driven decisions.
In this article, we will discuss the importance of law practice planning for running a successful legal practice. We’ll also detail specific examples of how lawyers can use litigation trends to implement strategic planning processes within their firms.
Law Practice Planning
Litigation trends can help lawyers plan, grow, and scale-down certain practice areas within their firms. Not only can they determine which practice areas to develop - and thus, how to staff accordingly - but they can also develop new competencies in lucrative areas of the law.
Firms can also use this type of information to help associates identify new areas of professional interest, thus grooming them to become future breadwinners for the firm. Associates who identify particular practice areas that intrigue them can not only gain valuable, hands-on legal training by cultivating a practice in those areas, but can also, over time, build out a profitable niche to expand the firm’s practice areas and expertise.
Preparing for upticks and downturns in the litigation landscape
Legal analytics and litigation trends can help lawyers decide how to staff or downsize (to cut costs) as needed before it is too late - that is, before another firm snaps up the bulk of business in an area and before expending valuable resources to maintain a large staff.
In fact, substantial changes in the law impact the vitality of certain practice areas, which can, in turn, directly affect a firm’s profitability. Understanding these changes is critical for lawyers looking to develop - and staff - only the most thriving practice areas.
A notable example is a recent downturn in Texas patent filings related to the landmark Supreme Court case TC Heartland. While the Eastern District of Texas used to be the hub for patent filings, SCOTUS limited where patent owners can file in a May 22, 2017 ruling, thus driving the bulk of cases to Delaware.
As the graphic shows, patent filings post-Heartland plummeted substantially, however, there was already a significant downward trend starting in 2015, with what appears to be about an 80% drop in the number of filings from 2015 - 2018. As such, it is essential for Texas attorneys to consider this trend in determining whether to scale down or ramp up an IP litigation practice: They may opt to explore other areas, leaving the glut of patent litigation to Delaware attorneys, or seek to open up an office in Delaware to take advantage of the new changes.
Tort reform presents a similar situation. A question that’s recently run through various jurisdictions is whether capping damages on tort recovery has had the intended effect of balancing public and private interests. Advocates of capped recoveries claim they’re necessary to protect society from bearing the burden of overwhelming jury verdicts, while opponents insist they’re patently unfair to PI plaintiffs.
In fact, in some states - like Pennsylvania, Arkansas, and Kentucky - caps on tort recovery are deemed unconstitutional. In other states, like California (a state that imposes a $250,000 cap on tort damages), PI plaintiffs have faced challenges finding lawyers who will take their cases, particularly in medical malpractice cases which are notoriously hard to prove and can yield little monetary reward for both attorneys and clients.
Understanding this landscape can help lawyers decide which cases to accept, as well as how and (more importantly) where to scale their practices, given the laws and policies shaping the likely risks and rewards.
The Use Cases
Practice areas on the rise
Attorneys and firms can successfully leverage litigation trends to identify practice areas on the rise so that they can staff and train accordingly. For instance, collections law firms in Los Angeles County, California, can successfully build and expand a collections practice as the cost of living continually rises, leading to more consumer debt. Seeing this surging increase in the number of collections cases, both plaintiff and defense firms can strategically hire more attorneys and support staff trained to handle the oncoming influx of cases.
Similarly, the patent example discussed previously can help firms plan their patent case volume based on fluctuations in filings and determine whether they need to change office locations to target jurisdictions with greater filings. Per the examples below, studying the trends can mean the difference between a practice that is moderately successful, and one that is absolutely booming. What it comes down to is getting ahead of the curve.
Dwindling practice areas
Tracking the trends of dwindling practice areas can also position attorneys for success, priming them to avoid diving into areas that will result in frustratingly low returns. Per the chart below, asbestos product liability cases are dwindling in California courts. While asbestos litigation was once a booming practice area, firms can study the trends and opt to abandon practices like asbestos product liability in pursuit of more thriving areas.
Stable practice areas
Some practice areas - like divorce cases - have remained relatively consistent over time, and statistics reflect this stability. The American divorce rate has been fairly consistent in the last few decades, so firms who traditionally profit from high-volume divorce filings can benefit from knowing that their bread-and-butter isn’t going to diminish any time soon.
This poses an important contrast to the more volatile and bombastic areas that vary based on decisions from federal courts as in the Heartland example, circumstantial factors like how many buildings are constructed with potentially harmful materials like asbestos, and/or economic trends that impact the volume of debt collection cases.
Litigation Trends for Business Strategy, Scaling, and Success
Leveraging litigation trends is key to continued law firm success and making data-driven decisions in connection with law practice planning. From tracking trends, to following key decisions in federal courts, to preparing to scale (or downsize) based on market needs, lawyers can benefit tremendously from simply staying informed. Legal technology makes it easy for lawyers and law firms to track litigation trends and can be an integral part of forward-thinking law practice planning and business development.
About the Author
Josh Blandi is the CEO and Co-Founder of UniCourt, a SaaS offering using machine learning to disrupt the way court records are organized, accessed and used. UniCourt helps clients tap into the mountain of court data generated everyday for legal analytics, business intelligence and development, background checks, case research and many other innovative uses.