A company that has been in business twenty years or more has often accumulated barnacles of legal problems – companies or assets sold with long-term liabilities retained, past mistakes with legal tails such as environmental cleanups, products sold or installed years before that are now class action magnets. New companies have smooth skin, no legacy legal wrinkles. They face current problems, but so do established companies, but the fresh-faced companies do not have scars to deal with.
Typically, the legal department is saddled with responsibility to cope with the forgotten drains, unremembered, unwelcomed, unrecognized, and unlikely to go away any time soon (See my post of March 18, 2005: perhaps 40% of spend looks backward; July 16, 2005: legacy litigation; Oct. 8, 2005: litigation lawyers who handle legacy issues don’t belong in any business unit; April 2, 2006: clients apathetic about legacy litigation; Oct. 25, 2007: dormant cases are usually legacy; July 31, 2006: appoint a czar to oversee orphan litigation; Sept. 9, 2010: intractable issues are an internal lawyer’s plight; and Nov. 1, 2010: corporate general ledger account.).