Almost All Companies Conduct Early Case Assessments
Virtually all companies now conduct early case assessments. Seventy-three percent of companies say outside counsel involvement in early case assessment is substantial or essential, up from 67 percent in 2015.
Outside Counsel’s Growing Role in Early Case Assessment
As companies reduce the number of in-house attorneys handling class actions, they rely more heavily on outside counsel during the early case assessment process. Companies primarily use outside counsel to help them examine case facts.
More Companies Make a Single Individual Accountable for Class Action Outcomes
A majority of companies hold a single individual accountable for class action outcomes. The number of companies that take this approach has increased steadily since 2011.
A Consistent Approach is the Leading Benefit of Holding a Single Person Accountable
The leading benefit of holding a single individual accountable for class action outcomes is that it fosters a consistent approach to class action management. This benefit outpaces the next highest benefit, efficiency, by a factor of nearly three. At a time when class actions are becoming increasingly complex, companies gravitate toward predictable, structured approaches that help them better manage their risk.
Use of Alternative Fee Arrangements Continues to Decline
For the second straight year, fewer companies report using alternative fee arrangements for class actions. Less than 40 percent of companies currently rely on AFAs for their class action work. Corporate counsel find it overly complex to manage fair AFAs in class actions due to the unpredictability of class action litigation. However, nearly 80 percent of companies expect their AFA use to remain the same in 2017.
Risk Level Impacts the Use of Alternative Fee Arrangements
Riskier class actions are less likely to be handled through AFAs. Companies are still unsure of the financial benefits of these arrangements in the class action context. As a result, and with few comparative mechanisms in place, the billable hour remains the most relied-upon fee arrangement in class cases.
Fixed Fees Remain the Leading Alternative Fee Arrangement Used for Class Actions
Fixed fees are still the go-to AFA for class action work. More companies are moving toward phased billing where work is assessed and billed by portion or segment of the litigation process. This approach offers predictability and more focused management of discrete components of class action work.