If I spend time reminiscing about the wayback times — all the way back to when I was a summer associate — I am reminded that one of the benefits of litigation (at least as described to me by an older associate nearly a decade ago) was supposed to be that it was recession proof. Meaning that just when the deals that characterize good economic times were slowing down that was when the real litigation would begin. So you’d be busy with new cases created by deals gone bad while your friends that joined corporate departments would find themselves without work to do at the same time a firm might be looking to make some cuts.
Now that didn’t prove quite true — when it’s time for Biglaw to do layoffs, litigation personnel find themselves as much at risk as every other department. But it is accurate that we do see an uptick in litigation after bad economic events. After all, it was only about two years ago when nearly every document reviewer or contract attorney found themselves on cases dealing with residential mortgage backed securities (RMBS). Yes, those same deals that nearly crippled the economy spawned massive litigation that kept food on my table. It didn’t matter what firm, agency or even city you worked for/in all the big document review projects seemed to be about RMBS. Now that that boom is nearly over we are left to wonder — what questionable business practice will lead to tomorrow’s doc review boom?
High Frequency Trading
This seems like the safe bet for the next big round of litigation. Michael Lewis has a new book out, Flash Boys: A Wall Street Revolt (affiliate link) about the world of high frequency trading and has been making the rounds on 60 Minutes, The Daily Show and other news outlets arguing that HFT demonstrates how Wall Street is a rigged game. Investors are starting to worry about the practice, and it is also pretty much exactly what the bad guys do in Superman III. Any time a business practice can be compared to a villainous movie plot you’ve got to imagine that it will also be the subject of litigation before too long.
David Einhorn, the hedge fund manager that leads Greenlight Capital, made the news yesterday claiming we were in the middle of our second tech bubble within the last fifteen years. The thing about bubbles is they eventually go pop especially when investors are short selling the stock. The last time the internet bubble burst in the early 2000s it left a wake of law firm layoffs and litigation. It isn’t far fetched to imagine the investor lawsuits that might happen should history repeat itself.
Remember Heartbleed? Or when Target’s customer information was breached? The year isn’t even half over, and those are already two major stories where consumer data was significantly compromised. Almost every fact about our lives is cataloged in databases somewhere and the most sensitive of that information (credit card info, social security numbers) is supposed to be protected. It’s probably too soon to be able to predict exactly what the harm of those two events were for customers but it isn’t hard to imagine them as the center of litigation. And for document reviewers, privacy litigation means redactions. Lots and lots of redactions, so get ready to draw boxes like a champ.
Alex Rich is a T14 grad and Biglaw refugee who has worked as a contract attorney for the last 7 years… and counting. If you have a story about the underbelly of the legal world known as contract work, email Alex at email@example.com and be sure to follow Alex on Twitter @AlexRichEsq