Legal and Compliance Readiness Plunges Amid Growing Regulatory and Cyber Threats

Why It Matters

Reduced legal readiness amplifies exposure to lawsuits and cyber incidents, pressuring organizations to rethink risk‑management structures.

Key Takeaways

• Litigation preparedness fell from 46% to 29%.
• Regulatory uncertainty spikes after administration change.
• Cybersecurity remains top risk for 38% of firms.
• HR‑IT partnership can cut insider‑risk incidents.
• Manager training reduces accommodation‑related litigation.

Pulse Analysis

The Norton Rose Fulbright 2026 Litigation Trends Survey reveals a sharp erosion in legal readiness, with the share of general counsel who feel "very prepared" to manage lawsuits dropping from 46 % in 2024 to just 29 % in 2025. The dip coincides with the transition from the Biden to Trump administrations, a period traditionally marked by shifting regulatory agendas and enforcement priorities. At the same time, in‑house litigation teams are shrinking and hiring slows, prompting firms to trim outside‑counsel spend and consolidate law‑firm relationships, further straining capacity to respond to emerging disputes.

Cybersecurity emerged as the leading concern for 38 % of surveyed organizations, reflecting a surge in data‑breach incidents and a fragmented federal oversight environment. Without a unified regulatory framework, companies must adopt proactive governance to bridge compliance gaps. HR departments are uniquely positioned to influence the risk profile, as employee behavior drives many security failures. By cultivating a culture of compliance and partnering closely with IT for real‑time monitoring, organizations can mitigate insider threats and lower both the frequency and severity of cyber‑related litigation.

Employment and labor disputes follow closely behind, with managers increasingly exposed to litigation over disability accommodations and paid‑leave obligations. The survey indicates a shift away from traditional discrimination claims toward these nuanced workplace issues. Proactive manager training—focused on early identification of accommodation requests and consistent documentation—offers a practical lever to reduce exposure. As HR integrates risk‑management processes and aligns with legal counsel, firms can create a resilient compliance infrastructure that not only curbs litigation costs but also supports broader strategic objectives.