May 9, 2022

Legal Operations Must Embrace Innovation

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Kevin Skrzysowski

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May 9, 2022

Legal proceedings shut down with all other nonessential industries as a result of COVID-19-related closures. Now, the courts are akin to opened floodgates, resulting in a surge of litigation swamping companies around the globe. A June 2021 Reuters study found that the average backlog of court cases increased from 958 cases to 1,274 over 12 months from 2019 to 2020 and one-third of courts surveyed indicated that their case backlog increased more than 5%.

At Risk Settlements, we provide bespoke risk transfer solutions so companies can obtain certainty when faced with the uncertainty of litigation. So we were interested to understand how in-house legal operations teams are faring in this unprecedented moment.

In pursuit of answers, we partnered with a think tank, In the House, surveying general counsels and other in-house leadership of ~200 companies operating in over 50 industry sectors across 20 countries and 37 states. We asked them about their litigation activities, legal spend, risk appetite, and awareness of the solutions available to help transfer risk and monetize claims. Our findings indicated that in-house legal departments are struggling with understaffing and shoestring budgets like so many other sectors of the economy—leaving companies treading water, or worse, completely immersed in an onslaught of threatened, pending, or active litigation.

In the face of these challenges, Legal Operations teams must embrace new ideas and forms of innovation. Here’s what you should know based on our research:

Companies of all sizes are defending the largest volume of litigation they’ve ever seen. 65% of our Litigation Risk Survey respondents are currently defending active litigation, with 20% defending 10-50+ cases. Analysis of the survey’s respondent pool, composed of equal proportions of companies made up of 50, 500, 2,500, and 10,000 employees, revealed a profound lack of correlation between a company’s size and the size of its legal department: 80% of survey respondents have fewer than ten in-house lawyers. Keep in mind that 43 percent of the in-house department leaders who responded to our survey work for companies with more than 1,000 employees.

Overstretched legal departments are being squeezed by time and budget constraints, limiting the use of outside counsel for support: 52% of survey respondents said their legal department budgets (excluding staff salaries and benefits) were less than $1 million. Only 6% of companies have allotted an annual legal department budget of greater than $10 million, despite the fact that 20% of respondents are employed by an enterprise with more than 10,000 employees. Unsurprisingly, litigation budgets are similarly limited, with three-quarters of in-house counsel saying that outside counsel/litigation expenses made up less than half of their annual legal department budget.

In recent years, businesses of all shapes and sizes have created and grown a new function within their legal units: Legal Operations Teams. The role of a Legal Operations function is myriad, encompassing a variety of tasks required to achieve success, from hiring and career development to budget management and technological growth. From a business perspective, Legal Operations teams provide high-quality and efficient legal services and represent an area for significant innovation.

25% of survey respondents created a Legal Operations team that provides much-needed support to the
legal department: the 2,000 individuals anticipated to attend the flagship Corporate Legal Operations Consortium is just one indication that legal operations are much needed tactical and strategic resources companies are relying upon to manage risk, compliance, and litigation. Moreover, when budgets are tight and outside counsel fees are often the largest line item, control costs and spend on outside legal services is critical.

As the launchpad to increasing efficiencies and gaining financial benefits, Legal Operations departments have a prime opportunity. With the help of outside consultants, Legal Operations can assess risk and utilize solutions in new ways to create efficiency by transforming the outcome risk of litigation through novel insurance and funding solutions. While more than 50% of companies would like to pursue monetization of legal claims, regardless of the claim amount, 50% of companies do not pursue affirmative claims due to the lack of resources. Employment of outside legal services that utilize alternative risk transfer solutions is one way for Legal Operations departments to reduce spending while significantly improving overall efficiency and quality.

To quote a recent CLOC article: “Legal operations have always been about change. As a community, we embrace disruption and turn it into opportunity. We do not need to fear this moment. We need to embrace it, to realize its incredible potential for positive transformation.” While COVID cases are falling, the world has fundamentally changed: it’s time to innovate accordingly.

Litigation risk transfer solutions are the arrows in the Legal Operations officer’s quiver of innovation. Provide certainty and finality to unknown contingent litigation liabilities by leveraging one of the several novel, cost-effective solutions offered by Risk Settlements:

  • Class Action Settlement Insurance (CASI) transfers 100% of the claims risk up to the total amount of exposure under a class action claims made settlement.
  • Litigation Buyout Insurance (LBO) transfers the outcome risk and expenses of known, threatened, or pending litigation to an insurer, thereby offsetting the liability from the company’s balance sheet.
  • Judgment Preservation Insurance (JPI) guarantees that the prevailing party will recover the amount of the judgment regardless of what the appellate court rules.
  • Adverse Judgment Insurance (AJI) provides coverage in the event that the moving party loses and is taxed with the litigation costs under a “loser pays” rule or statute.
  • We provide Litigation Funding Wrapper which allows companies and law firms to seek insurance to guarantee the outcome of litigation to ensure that the lawyers’ (working on a contingent fee) WIP is paid and/or to make funding either possible or more cost effective.
  • We also provide Litigation Funding and Litigation Asset Monetization for corporate plaintiffs. In order to assist companies in tapping into latent litigation assets, our underwriting team can assist in identifying potential claims, performing merits and outcome analysis and designing risk transfer solutions to insure the outcome of the litigation, provide immediate monetization of the litigation, or both.

EY Law (a branch of Ernst & Young) recently noted that tightened budgets are particularly limiting t legal departments, which, as CEOs increase digitization efforts, are being burdened with greater responsibilities to advise and assess risk. Risk Settlements doesn’t see your risk as a burden but as an opportunity; and we can use our expertise to unlock it. If your organization is one of the many that’s strapped for time, personnel, and funds, it’s time to think outside of the box. We understand litigation risk and designs solutions.

If you want to learn more about our findings and innovative solutions, access our full white paper.


Contact:
Kevin Skrzysowski is an attorney and Director at Risk Settlements where he utilizes their proprietary
quantitative and qualitative processes and more than 20 years of legal and business expertise to help
companies and their outside counsel design optimal litigation risk transfer solutions to mitigate the
financial risk arising out of class actions and other types of commercial litigation. Kevin can be contacted
directly at: kevins@risksettlements.com or (216) 570-9370.

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Lex Machina, Trade Secret Litigation Report (2026), reporting an all-time high in federal trade secret case filings in 2025; see also Lex Machina, Trade Secret Litigation Report (2024) (1,203 federal filings in 2023). 2. Defend Trade Secrets Act of 2016, Pub. L. No. 114-153, 18 U.S.C. Section 1836 et seq.
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In 2025, OpenAI acquired io, the hardware venture founded by former Apple design chief Jony Ive and a group of other Apple alumni, for a reported $6.5 billion, and set out to build its first consumer hardware device, widely expected to compete directly with the iPhone.² To staff that effort, OpenAI hired aggressively from Apple. According to the complaint, more than 400 former Apple employees now work at OpenAI.³ Two of those hires anchor Apple’s allegations. Tang Yew Tan spent roughly 24 years at Apple, where he served as a vice president of product design responsible for the iPhone and Apple Watch, before becoming OpenAI’s chief hardware officer. Chang Liu spent about eight years at Apple as a senior systems electrical engineer before departing for OpenAI in 2026.⁴ Apple’s theory is not that a single rogue employee walked out the door with a file. It is that the movement of talent was accompanied by a coordinated effort, one Apple describes as operating “at every level," to extract and exploit the confidential information those employees carried in their heads and on their devices.⁵ The Allegations The complaint reads less like a garden-variety departure dispute and more like a catalog of the exact conduct the Trade Secret Guide warns companies to watch for. Among Apple’s central allegations: Apple claims OpenAI’s hardware leadership directed recruiters to use Apple’s confidential project code names during the hiring process, and instructed job candidates to bring “actual parts” and “CAD/design artifacts” to their interviews.⁶ It alleges that OpenAI circulated internal Apple documents marked “Need to Know” that coached departing employees on how to evade Apple’s exit-security procedures, including the “dreaded walkout,” and to alert OpenAI before signing their exit agreements.⁷ The specifics attributed to individual employees are what give the complaint its texture. Apple alleges that Chang Liu exploited an authentication bug to reach internal network storage after his access should have been cut off, messaging a colleague, “LOL, I found out I can access the [network storage], so funny,” and noting within hours of his departure that he “still ha[d] another computer.”⁸ And Apple alleges that io “exploited and used Apple’s secret, proprietary industrial design techniques,” misleading one of Apple’s own manufacturing partners about whether it was authorized to use a confidential metal-finishing technique.⁹ The trade secrets Apple says are at risk span the full arc of its product-development process: technical specifications for unreleased technologies, engineering presentations and prototype data, component and vendor selection processes, and the proprietary manufacturing techniques that turn a design into a shippable product.¹⁰ Notably, Apple’s opening ask is not a damages windfall. It is protection. Apple seeks to bar OpenAI from using or disclosing the information at issue, to compel the return of its confidential materials, and to preserve the evidence.¹¹ In other words, Apple is using the courthouse to do what its NDAs and exit interviews were supposed to do: keep its edge inside the building. OpenAI’s Response OpenAI has pushed back hard, and its answer is a preview of the fault lines any trade secret plaintiff should expect to fight over. On August 6, 2026, OpenAI moved to dismiss, characterizing the alleged conduct as “benign, lawful conduct” that Apple has mischaracterized, and arguing that its hardware executives simply followed standard industry recruiting practices.¹² As to Chang Liu, OpenAI contends he was “trying to help Apple” by assisting former colleagues who asked him to locate work information, not stealing anything.¹³ More pointed, and more instructive, is OpenAI’s argument that Apple’s own conduct undermines its case. OpenAI asserts that Apple allowed employees to use personal iCloud accounts for work and failed to properly revoke access when they left — noting that an Apple manager remained logged into Chang Liu’s personal iCloud account after his departure in order to transfer files.¹⁴ From that, OpenAI argues that Apple’s offboarding lapses created “confusion and unwanted access issues that Apple now characterizes as theft.” OpenAI also contends that Apple has not identified its trade secrets with adequate specificity, pointing instead to “generic categories of the product-development process.”¹⁵ OpenAI must file its full response by August 17, 2026, with oral argument on the motion set for October 1, 2026.¹⁶ Whatever the merits, OpenAI’s playbook is worth studying precisely because it is so conventional. Reasonable secrecy measures and identification of the trade secret with particularity are two of the elements every misappropriation claim rises or falls on, and they are exactly where a well-resourced defendant will apply pressure first. What This Means It is easy to read a case like this as celebrity litigation between two of the most valuable enterprises on earth. The more useful reading is that trade secret law has become core infrastructure for how modern companies protect competitive advantage. Apple did not respond to a $6.5 billion competitive threat with a press release or a patent portfolio. It responded with a trade secret complaint, because in a business where the crown jewels are unpatented know-how — manufacturing techniques, vendor relationships, unreleased designs — the Defend Trade Secrets Act and its state-law counterparts are the sharpest tools available. The case also throws the Trade Secret Guide’s central lessons into relief. The value of a trade secret program is only as good as the “reasonable measures” behind it; OpenAI’s opening move is to argue that Apple’s own iCloud and offboarding practices were not reasonable at all. The ability to describe what was taken, with specificity, is not a formality. It is frequently the whole ballgame at the pleading stage. And the human element — recruiting, exit procedures, the “dreaded walkout” — is where secrets actually leak, long before anyone reaches a courtroom. Companies that treat these as compliance checkboxes learn the hard way, in a complaint, that they were the strategy all along. For those of us who evaluate disputes for a living, Apple v. OpenAI is also a reminder of why high-stakes trade secret matters are among the most compelling on the plaintiff’s side. The conduct is often concrete and documentable, the competitive stakes are enormous, and, as the Federal Circuit’s recent decision in Versata Software v. Ford underscored, the damages framework can reach the full value of what the misappropriation delivered to the wrongdoer, not merely a discounted license fee. That combination is exactly what makes these cases worth pursuing, and worth backing. Apple’s complaint will be tested, as it should be, and the allegations remain just that — allegations. But the strategic signal is already unmistakable. When the most valuable company in the world wants to defend its future, it reaches for trade secret law. Certum Group’s Trade Secret Guide is built to help plaintiffs and their counsel do the same, whatever their size, and this case is a live illustration of why that playbook matters now more than ever. Certum Group can help. If you are evaluating a trade secret dispute or want to talk through options for funding or de-risking one, get in touch . Footnotes ¹ Complaint, Apple Inc. v. OpenAI, Inc. , No. 5:26-cv-07078 (N.D. Cal. filed July 10, 2026); see Apple sues OpenAI over alleged trade secret theft , TechCrunch (July 10, 2026). ² The wildest allegations in Apple's trade secrets lawsuit against OpenAI , TechCrunch (July 13, 2026). ³ Id. ⁴ Apple sues OpenAI over alleged trade secret theft , TechCrunch (July 10, 2026). ⁵ Apple sues OpenAI alleging trade secret theft, says scheme was "at every level," CNBC (July 10, 2026). ⁶ The wildest allegations in Apple's trade secrets lawsuit against OpenAI , TechCrunch (July 13, 2026). ⁷ Id. ⁸ Id. ⁹ Id. ¹⁰ Apple sues OpenAI over alleged trade secret theft , TechCrunch (July 10, 2026). ¹¹ Id. ¹² OpenAI Asks Judge to Toss Apple's Trade Secrets Lawsuit , Claims Journal (Aug. 7, 2026). ¹³ Id. ¹⁴ OpenAI says Apple's own security practices undermine its trade secrets case , TechCrunch (Aug. 6, 2026). ¹⁵ Id. ¹⁶ OpenAI Asks Judge to Toss Apple's Trade Secrets Lawsuit , Claims Journal (Aug. 7, 2026).