Dive Brief:

• More than six in 10 organizations (61%) faced at least one regulatory proceeding last year, which was up 11 percentage points from 2022, according to an industry report. 
• Nearly half of the more than 400 general counsel and in-house litigation leaders surveyed said their increased use of AI technology will heighten their cybersecurity exposure and IP vulnerabilities moving forward. 
• Amid last year’s banking crisis, 21% of organizations were involved in bank or financial fraud class actions, Norton Rose Fulbright’s 2024 Annual Litigation Trends Survey found. 

Dive Insight:

Organizations faced an average of 3.9 regulatory proceedings last year, which was up from 2.9 in 2021.

Four in 10 GCs and in-house litigation leaders reported experiencing regulatory and investigations-related litigation in the prior 12 months, which was on par with cybersecurity and data privacy as the third most common type of litigation.

“Signaling that regulatory scrutiny is unlikely to soften as the executive branch pursues action in areas like cybersecurity, antitrust, and employment and labor, 43% also expect regulatory proceedings and investigations to grow in 2024,” the Norton Rose Fulbright report said. “More than half (52%) of respondents say that issues with regulatory compliance could increase their governance dispute exposure in the year ahead.”

Beyond federal action, 39% of respondents said state regulatory changes and enforcement are also contributing to fears about increased exposure to regulatory disputes. 

“For example, some states are using older or existing tools to address misconduct involving new technologies and industries,” the report said. “New York (44%), California (43%) and Florida (36%) had some of the highest proportions of state-level exposure concern from respondents located in those states.”

The rapid advancements in AI technology have resulted in increased cybersecurity and intellectual property risks for organizations, according to Norton Rose Fulbright.

Additionally, the use of AI in hiring and employment decisions was cited as a factor that could lead to increased labor and employment dispute exposure in the next year. 

However, the potential drawbacks may not stifle the desire of in-house legal teams to receive the benefits emerging AI offers, the report said. Along those lines, more than one in three respondents said they support the use of generative AI by their outside counsel. 

“In-house counsel are eager both to respond to new uncertainties around generative AI and to take advantage of the efficiencies it promises,” said Steven Jansma, Norton Rose Fulbright’s head of litigation and disputes practice in the U.S. “This tension informs many of the trends we highlight for 2024, including cyber risk, IP and expectations for outside counsel.”