Big Company Insiders See Tech-Related Disputes Teed Up for 2025

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Where there’s change, there’s risk. And technology is driving much of the change facing in-house lawyers and risk management teams at large companies.

Baker McKenzie again this year asked senior legal and risk professionals at companies with more than $500 million in revenue about the sorts of disputes they expect to see in the coming year. More than 600 professionals based in Brazil, Hong Kong, Germany, the UK, the U.S. and Singapore responded this year as part of the firm’s eighth annual global disputes forecast. They cited two technology-related topics—cybersecurity/data privacy and artificial intelligence—as the greatest sources of risk for their companies. Cybersecurity and data privacy were cited by 45% of respondents, with artificial intelligence coming in just a tick behind—cited by 44% of respondents. Those two areas significantly outpaced the next-highest risk drivers: employment (cited by 32% of respondents), commercial and contract (cited by 25%) and tax (cited by 25%).

Litigation Daily connected with William “Widge” Devaney, chair of the North America litigation and government enforcement practice at Baker McKenzie, in the run-up to the release of the firm’s findings this morning.

“For several years now, when you’re meeting with clients and you’re talking to GCs [and you ask], ‘What keeps you up at night?’ [the answer] was cyber,” said Devaney, a former federal prosecutor with a white-collar defense and investigations practice. “My sense is it’s still keeping most folks up at night.”

When it comes to cybersecurity and data privacy, respondents expressed more concern about regulatory scrutiny than private lawsuits. Of those who listed cybersecurity and data privacy as a top risk, 70% said they were concerned about regulatory investigations or enforcement actions, including fines, and 44% mentioned potential cyber insurance coverage gaps or disputes over claims. By comparison, just 30% mentioned class actions or other consumer actions as a concern, and even fewer, 20%, mentioned commercial disputes resulting from data or cyber incidents.

“For a cyber event, I think you have to look at it very holistically,” Devaney said. He noted that the attack itself could lead to interactions with law enforcement and regulators, as well as mandatory disclosures. On top of that, cyber events often involve insurance coverage issues and, if customer data is compromised, follow-on class actions. They also raise the specter of SEC scrutiny and potential follow-on securities litigation. “These can often be kind of litigation/investigation perfect storms,” Devaney said.

Regarding artificial intelligence, the report’s authors point out that regulatory approaches have varied from country to country. Singapore and Japan, for instance, have provided specific exemptions for accessing data to train AI tools—exemptions that either do not exist or have not been standardized elsewhere. “We expect to see major developments in the coming year as courts, legislators and regulators grapple with the application of existing IP law to the questions raised by AI, and consider whether new guidance or amendments to existing legislation are required,” the authors write.

Even as AI was the second-highest area of concern among respondents, in-house teams report they are harnessing the technology to manage their own dockets, with 73% saying they use AI in analysis, 70% using it for decision-making and 69% using it for research. Other use cases, such as prediction (34%), discovery/disclosure (32%) and drafting (24%), were cited much less often. The report’s authors wrote that they were struck that only 12% of respondents cited the potential for bias and discrimination in AI as a risk, and only 21% considered issues of job displacement—something the authors write “indicates a potential risk gap.”

Devaney said that Baker McKenzie has made efforts to use AI in its practices without compromising attorney-client privilege. He called AI “a potent research tool.” But he added that investigations and litigation tend to follow commerce. “Tech companies are investing heavily in their AI technologies. Most companies are trying to roll out AI at one level or another,” he said. “With new concepts come new risks.” Devaney ticked off AI hallucinations, the potential for bias within AI models and claims of AI-washing as novel issues clients are having to grapple with.

Aside from the technology-related risks, Devaney noted that commercial/contract litigation had risen to the fourth most-cited risk among respondents to this year’s survey, up three spots from last year. “Even that old bread-and-butter contract work—post-M&A work—is certainly not going away,” he said. “Cyber, AI, data privacy: all that’s very exciting. But you see just that continual march of the bread-and-butter commercial litigation.”

Environmental, Social & Governance risk, which was cited by almost three-quarters of all respondents to last year’s survey, was cited by just 40% this year. But Devaney said that ESG risk is not receding, especially for companies with a global footprint. Anti-ESG laws might have gained a foothold in some states in the US, but Devaney pointed out that in major markets including the EU and Brazil, ESG-related regulations are moving ahead full-steam. “It becomes increasingly challenging for global companies to work in the international marketplace when you’ve got some competing ESG regimes out there,” he said. “That’s going to be interesting to see how that plays out in the next couple of years.”