Survey: Wage/Hour Suits Lead Litigation Parade

Fulbright & Jaworski L.L.P. is a leading full-service international law firm, with approximately 850 lawyers.

Litigation Spending Is Up

Spending on litigation has risen this year, with U.S. companies reporting a median spend of $1.4 million. E-discovery tops the budget list, with nearly one-fifth of all respondents—and one-quarter of large-caps—expecting budget increases in that area. Respondents, as they have in years past, are also planning for budget increases in labor and employment, contracts, and regulatory litigation,

Alternative fee arrangements are catching up to the traditional billable hour approach. Corporate counsel want to keep costs low, but they also want to keep them predictable. The percentage of respondents who reported using alternative fee arrangements for at least some of their work jumped again, to 62%. The trend is expected to continue.

Despite the increased usage of alternative fee arrangements, they account for a minority of all billings—a clear indication the billable hour still reigns. Nearly 70% of respondents say they use alternative fee arrangements for less than 30% of their outside counsel billings.

What kind of alternative fee arrangements are respondents using?  Although the past two years saw heavy usage of contingent fees and reward-based fees, in this year’s survey, those arrangements languish, giving way to rises in fixed-fee arrangements (62% of all respondents); blended rate (59%); and capped fee (51%).

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Labor & Employment Litigation: Up, Up, Up

Wage and hour disputes led the way, with 20% of all respondents reporting an increase in multi-plaintiff cases, a little higher than last year’s rate of 18%. By industry, retail/wholesale is getting hit hardest, with 37% reporting a jump in wage and hour cases.

The upward trend in wage and hour cases started several years ago, when plaintiffs lawyers increased their pursuit of these cases, recognizing that although state and federal law provided recovery of small amounts per employee for events or practices, these laws covered hundreds of workers—in addition to providing for an award of attorney’s fees and double-damages in some cases.

This year, the trend continues: more than 40% of respondents say the greatest increase in multi-plaintiff cases are wage and hour disputes.

Discrimination suits are also up. About 40% of all respondents say that when it comes to the entire spectrum of labor and employment litigation—both multi-plaintiff cases and otherwise—discrimination suits have increased the most in the past 12 months, with particularly high rates reported by health care, manufacturing, financial services and insurance respondents.

Not surprisingly, 43% of U.S. respondents say wage and hour claims create the most monetary exposure.

To prevent these expensive suits, what’s step number one? Back to basics: Work over your job descriptions. That’s where the trouble begins. What’s the state of your job descriptions? Concerned they might not be up to date and ADA-compliant? … Actually, with BLR’s new program, they are.

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These are descriptions you can depend on. Our collection has been constantly refined and updated over time, with descriptions revised or added each time the law, technology, or the way business is done changes.

Revised for the ADA, Pay Grades Added

BLR editors have taken apart every one of the 700 descriptions and reassembled them to be ADA-compliant. And now they’ve added pay grades for each job, based on BLR’s annual surveys of exempt and nonexempt compensation, as well as other data.

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SmartJobs also includes an extensive tutorial on setting up a complete job descriptions program, as well as how to encourage participation from all parts of the organization. That includes top management, employees, and any union or other collective-bargaining entity.

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