New York, NY – A recent report from the Insurance Information Institute highlights the booming rise in legal advertising across the United States and the substantial role of third-party litigation funding in shaping these trends. With attorney advertisements now a common sight, the industry reportedly spent over $2.5 billion on nearly 27 million ads in 2024. The surge reflects an ongoing shift in how legal services are marketed and funded.
Data from the American Tort Reform Association reveals significant growth in advertising formats, including television, radio, and outdoor displays, particularly since 2017. Television ads reached a peak of 16.4 million placements in 2023, marking a 44% increase in five years. Radio ads experienced an even steeper rise, climbing to over 6.8 million in 2024, a staggering 261% jump compared to 2017. Outdoor advertising, such as billboards, also saw a notable increase of over 260%.
Though the overall advertising spending has increased by 39% since 2020, experts caution that the overwhelming presence of these ads—often financially supported by third-party litigation financiers—may contribute to systemic issues in the legal field. The influx of legal advertisements is believed to be a driving force behind inflated claims and prolonged settlement processes.
Sean Kevelighan, CEO of the Insurance Information Institute, voiced concern over the current state of attorney advertising, describing it as a burgeoning industry that fuels growth in multi-district litigation. These multi-district cases frequently lure participants into engaging with often dubious lawsuits, stretching from claims about defective earplugs to harmful weed killers. He noted that these ads, often backed by litigation funders, tend to exaggerate outcomes and create urgency, attracting individuals who might not have otherwise considered seeking legal recourse.
The report points out potential dangers linked to attorney advertising, such as fostering a false sense of urgency that pressures individuals into hasty decisions. These ads, which promise unrealistic results, can skew expectations and complicate the settlement timelines. Additionally, they can influence juries by presenting biased information that may impact the jury’s assessment of the case facts.
Third-party litigation funding—where investors provide financial backing for lawsuits in exchange for a share of any settlements—has become a prominent force in mass litigation. The capacity to invest significant resources allows law firms to broaden their recruitment efforts for plaintiffs, accentuating the impact of marketing strategies.
The economic allure of multi-district litigation, alongside the high initial investment required, makes it an enticing prospect for funding sources. A recent report indicates that assets managed by third-party litigation funders have climbed to $16 billion, with around 74% allocated specifically for covering legal expenses, including advertising aimed at attracting plaintiffs and consolidating cases.
Research conducted by Yehonatan Givati and Eric Helland indicates a direct correlation between the volume of legal ads and the number of plaintiffs participating in multi-district litigation. Their findings suggest that the influx of filings isn’t solely driven by competitive practices among attorneys but also reflects a genuine increase in claimants seeking to join these cases.
Kevelighan emphasized that third-party litigation funding exacerbates existing issues within the legal framework. By extending the reach of legal actions and supporting prolonged litigation campaigns, TPLF may complicate how insurance companies assess risk and calculate premiums.
Calls for reform and transparency are echoing among industry stakeholders, who warn that the intertwining of mass tort advertising and external funding could threaten the fabric of the legal system. Without enhanced oversight, these trends risk straining insurers, inflating costs, and undermining public confidence in civil justice.
Kevelighan reiterated the urgency for ethical guidelines, advocating for more robust tort reform to curb the practices of what he termed “billboard attorneys.” He believes these tactics undermine American consumers and drive up expenses for essential services.
The Insurance Information Institute, established in 1960, continues to serve as a vital source for insights related to risk and insurance, aiming to inform and connect various sectors within the industry. Stakeholders hope that by illuminating these challenges, they can encourage meaningful dialogue and foster reforms that restore balance within the legal landscape.
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