A midyear Norton Rose Fulbright survey of 135 U.S. in-house counsel found 47% see workforce changes such as layoffs and policy revisions as a likely 2026 class-action trigger, behind only data breaches at 51%.
State-level employment risk is rising faster than federal exposure—44% versus 39%—as California, New York and other states add rules that complicate compliance for multistate employers.
AI is adding a second employment risk layer: 43% expect bias or discrimination claims tied to AI to increase litigation exposure through end-2026, while 39% cited AI-assisted workforce decisions; among $1 billion-plus companies, that rises to 41%.
Energy companies reported the heaviest employment exposure at 57% federally and 51% at the state level, while healthcare respondents put employment and labor first among state risks at 50%.
The report points employers toward earlier legal review of layoffs, return-to-office mandates and benefits changes, plus tighter documentation and vendor oversight for AI hiring tools.
As of mid-2026, the litigation landscape is rapidly evolving, creating unpredictable risks for corporate counsel across sectors. Legal departments are adapting by improving management of internal budgets and outside counsel costs, even as regulatory and compliance challenges remain significant. This progress in cost control reflects meaningful gains in litigation readiness since late 2025, showing that organizations are responding effectively to the shifting environment. However, the ongoing complexity of regulations continues to demand adaptive strategies, highlighting the need for legal teams to stay agile and proactive in managing both operational pressures and emerging litigation risks.