An Overabundance of Attorneys

The author of that quote, Lin Yutang, was a Chinese-American writer and translator. Lin died in 1976, making that last bit—the part about too many lawyers—seem especially prescient.

In a survey conducted by the American Bar Association (ABA) in 1972, 70% of Americans not only did not have a lawyer, they didn’t even know how to find one. Thirty-five years later, the ABA has us just where it wants us. The U.S. is far and away the most litigious society in the world. We’re subjected around the clock to ambulance-chasing lawyers hawking their “sue unto others” philosophy from obnoxious TV ads, billboards, phone books and newspaper ads.

Yes, things have changed a bit since 1972, and unfortunately not for the better. The ABA now says the U.S. has more than 1.1 million practicing attorneys, or roughly one lawyer for every 300 men, women and children in the country. And that rather astonishing number only counts lawyers currently practicing and maintaining their licenses—there are many more who are retired or otherwise inactive.

With that many lawyers filing millions of lawsuits monthly, it should come as no surprise that litigation has become a major line item in the budgets of many American manufacturers. According to a new study on manufacturing industry disputes from law firm Fulbright & Jaworski LLP, 43% of the manufacturing companies responding said they spent at least $5 million on litigation, excluding costs of settlements and judgments. Fully 70% of manufacturers responding reported spending over $1 million per year on legal disputes—by far the most of any industry surveyed.

The survey found that 91% of manufacturing companies faced at least one new lawsuit last year. More than half (56%) faced more than 20 new suits in the past year, far more than any other industry surveyed. And 42% of the manufacturing companies surveyed reported facing at least one $20-million action.

The shocking numbers just keep coming. More than one-fourth (26%) of survey respondents expect their case load to increase next year; 60% said they have class action suits pending against their companies and 18% have more than six class actions pending. But of course, litigation is a two-way street: 74% of responding companies filed at least one suit acting as plaintiff last year.

The most prevalent types of lawsuits reported by manufacturing companies’ in-house law departments were labor/employment matters (68%), followed by product liability (53%) and environmental or toxicity disputes (44% each).
As you might expect, company size and large legal bills go together: only 2% of smaller manufacturers reach the $5 million plateau, compared with 7% for mid-tier companies and 45% of billion-dollar businesses. But any lawsuit at all can be ruinous to, for example, a small finishing shop already struggling with difficult market conditions.

If there’s any good news here, it’s that the sheer number of new lawsuits being brought against manufacturers appears to be leveling off. According to the survey, 17% of manufacturers escaped the past year without having to defend a single new lawsuit, up from 11% in the previous year. Only 22% of respondents said they expect to see the number of legal disputes their companies face increase over the next 12 months; a year ago, while 33% said they were anticipating a rise in lawsuits involving their company.

No doubt there’s a place for attorneys in any society as vast as ours. But it’s unfortunate that litigation seems to have become such an integral component of the American way of life. This country, and especially its manufacturing sector, became great through hard work, innovation, ingenuity and entrepreneurial spirit. Unfortunately, some of that spirit now seems to have rubbed off on our virtual armies of trial lawyers, who are constantly on the lookout for new and innovative ways to sue the pants off others.