A new study shows how general counsels and chief financial officers in various industries manage legal risks and value in conditions of uncertainty.

Around the world, leaders of legal and financial departments across various industries have developed different strategies for future spending on legal services and artificial intelligence. Nevertheless, they unanimously strive for innovation and seek new ways to create value.

/PRNewswire/-- Burford Capital, a leading global company in finance and asset management focused on the legal sector, has presented a new study analyzing how highly skilled lawyers and financial department experts across various sectors approach litigation expenses, legal cost management and risks, as well as optimizing the operations of legal departments.

Since its founding 15 years ago, Burford has seen the consequences of the global financial crisis significantly change the approaches and methods used in the legal field. Economic, political, and social transformations have had varying impacts on different industries and their legal functions. This study demonstrates how leaders in legal and financial departments across various sectors are adapting to external and internal challenges by altering their legal strategies and determining where resources will be directed in the future.

The research is based on online interviews with 400 leading lawyers and financial specialists from ten different sectors of the economy, allowing for a deeper understanding of their approaches to managing commercial disputes, as well as cost and risk management in their legal departments. The industry sectors considered include:

• construction and real estate;
• consumer goods and services;
• energy sector;
• food industry;
• healthcare;
• production;
• mining industry;
• pharmaceuticals and biosciences;
• retail trade;
• transport and logistics.

The main results of the study

The main findings of the study show:

• Leaders of legal and financial departments in the construction and mining sectors expect the largest increase in litigation costs over the next five years, followed by the pharmaceutical and food industries.
• Three-quarters of general counsels (GC) and chief financial officers (CFO) in construction and real estate are focused on increasing the predictability and certainty of legal costs — this is 25% higher than the average across all industries.
• General counsels and CFOs in pharmaceuticals and life sciences are four times more likely than the average in other industries to claim that they can reallocate $50 million or more to other business areas by funding litigation and arbitration.

Almost two-thirds (65%) of legal and financial executives in mining companies indicated that over the next 15 years, they may take advantage of monetization mechanisms—legal financial solutions that provide businesses with immediate capital, anticipating the expected amount of a claim, ruling, or damages. Half of the CEOs and CFOs in the food industry expect their organizations' litigation and arbitration expenses to increase by more than 25% over the next five years; they also utilized legal financing 54% more often than the average in other industries. A third of legal and financial executives in the energy sector report that they already have a robust active recovery program, which is nearly double the average in other industries.

General counsels and CFOs from the healthcare, retail, and consumer goods sectors believe that legal financing can play an important role in reducing overall litigation costs, possibly due to the characteristically low margins in these sectors and the drive for innovative cost-saving measures.

Retail leaders are most likely to express their intention to significantly increase investments in legal technology and artificial intelligence in the coming year. The industries expected to see the largest increase in litigation spending in the future currently do not have the largest budgets, indicating a significant shift in litigation priorities for some sectors.

The opinion of the CEO of Burford Capital

Christopher Bogart, the CEO of Burford Capital, noted: "A recent Burford study confirms that general counsels and CFOs across various sectors are seeking new ways to create value for their businesses. This is at the core of our work aimed at helping clients transform their legal departments from a cost center into a source of capital.

The latest research results were obtained through an online survey of highly professional financial directors and corporate lawyers from companies across various industries with annual revenues exceeding $50 million in the USA, UK, Australia, Singapore, Germany, France, Spain, Switzerland, Sweden, the Netherlands, and the United Arab Emirates. All respondents hold positions that allow them to participate in decision-making regarding litigation spending in their companies. Details about the research on litigation and arbitration can be found on the Burford website. The study was conducted by GLG from December 2023 to January 2024.

About Burford Capital

Burford Capital is a leading global corporation in the field of financing and asset management, focused on law. Its activities encompass litigation financing, risk management, asset recovery, and a wide range of legal financial and consulting services. Burford is traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), providing services to various companies and law firms around the world from its offices in New York, London, Chicago, Washington, Singapore, Dubai, Sydney, and Hong Kong. This message is not an offer to sell or a solicitation to purchase shares of Burford or other securities.