In 2024, legal service providers in the United States spent over $2.5 billion on nearly 27 million advertisements, according to research from the American Tort Reform Association (ATRA). This marks a significant increase in advertising across television, radio, and outdoor platforms since 2017.
The Insurance Information Institute (Triple-I) recently highlighted this trend in an issues brief titled “Legal System Abuse and Attorney Advertising for Mass Litigation: State of the Risk.” The report discusses the sharp rise in attorney advertising and the growing role of third-party litigation funding (TPLF) in the legal landscape.
Sean Kevelighan, CEO of Triple-I, noted that attorney advertising has turned into a lucrative business, contributing to the rapid growth of multi-district litigation (MDL). These ads often encourage individuals to join lawsuits over various issues, from defective earplugs to harmful weed killers. Many of these advertisements are funded by litigation financiers, which can create a sense of urgency and unrealistic expectations for potential claimants.
Research conducted by Yehonatan Givati and Eric Helland found a direct link between the volume of advertisements and the number of plaintiffs participating in MDL cases. Notably, television ads reached a peak in 2023 with 16.4 million placements, a 44% increase since 2017. Radio advertisements surged to over 6.8 million in 2024, marking a staggering 261% rise from 2017 levels. Additionally, outdoor advertising, including billboards, increased by more than 260%.
While part of the increase in advertising spending—up 39% since 2020—can be attributed to rising digital costs, experts warn that the oversaturation of legal ads, often backed by TPLF, may lead to legal system abuse. This could drive up insurance claims and prolong the settlement process.
TPLF involves investors financing lawsuits in return for a share of the settlement. This funding has become a significant factor in the rise of mass litigation. The 2024 Westfleet Insider report estimates that TPLF assets under management reached $16 billion, with about 74% allocated to legal budgets, which include advertising costs for attracting plaintiffs.
Kevelighan emphasized that TPLF fuels the growing legal industry, enabling law firms to expand their reach and sustain legal actions. However, this can complicate how insurance companies assess risk and set premiums.
In light of these developments, stakeholders are calling for transparency and reform in the legal system. They urge policymakers to find a balance between ensuring access to justice and maintaining the integrity of the legal process. Without stricter oversight, the combination of aggressive advertising and external funding could further burden insurers, increase premiums, and diminish public trust in the civil justice system.
Kevelighan reiterated the need for tort reform to address what he describes as exploitative practices by attorneys, which ultimately raise costs for consumers. The ongoing conversation about legal advertising and TPLF continues to shape the future of the legal landscape in the U.S.