Carlton Fields' 2018 Class Action survey, based on interviews with GCs, CLOs and other senior legal officers at 411 companies, concludes that class actions are growing in number, size, complexity, risk and cost.
But the most interesting finding concerns how companies measure success in defense of class actions. Damages has been the top measure over the last few surveys. No more. As the chart below shows, “estimated exposure” is the newly favored metric. Which brings to mind David Cambria, director of global ops at Archer Daniels Midland. Cambria recently spoke at the annual LMA P3 conference in Chicago about how ADM evaluates outside counsel. (Not familiar with P3? Imagine a Swatch instead of a CLOC.) Cambria’s session, which included Christopher Ende of United Lex and contrarian extraordinaire Casey Flaherty, was called “How Clients Grade You.” Supported by a cavalcade of graphs and charts that would scare the bejesus out of any Big Law partner, Cambria showcased a measure he conjured up called Maximum Potential Exposure, or MPE. It’s a value, derived from a mix of empirical and anecdotal information, that mashes up the financial, operational and reputational damage a company faces if a matter goes way south. Cambria is a sharp ops guy, and his measure merits attention. It is embedded in various queries addressed in the Carlton Fields study, but it’s the mashup that gives it vigor. Let’s see if others follow suit.
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Published January 11, 2019.