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Varied rates for practice areas in legal fees paid compared to settlement costs paid

Practice areas have very different ratios of liability to defense cost, according to research by eLawForum. “In employment and asbestos litigation, the ratio is approximately one-to-one,” which means that for every dollar the defendant corporation pays in settlement [liability costs] it pays one dollar to a law firm representing it [defense costs]. Met. Corp. Counsel, Vol. 16, Feb. 2008 at 28, continues. “In commercial and environmental litigation, the ratio is three-to-one. In personal injury and product liability, four-to-one, and in medical malpractice as much as eight-to-one. For intellectual property, the ratio can be ten-to-one or more.”

Thus, patent lawsuits have much more at stake in terms of liability exposure relative to the outside-counsel costs of defense than any other kind of lawsuit. Legal fees rise as the amounts at issue rise, but the latter can soar immensely faster in some kinds of litigation.

Data on settlements and judgments is hard to come by (See my posts of May 30, 2005: a data lacunae; and Feb. 13, 2008: data from DuPont.).