How Big is the Contract Dispute Resolution Market?

If we’ve done our job, you know Smarter Contract resolves contract disputes by leveraging a large network of experts to do the same job as an expert adjudicator at a fraction of the cost.

But, how large is this market? (I know you shouldn’t start a sentence with “but”, but I couldn’t help it!)

We put our heads together and estimated that the size of the contract dispute resolution market Globally is $156 billion and in the U.S it is $73 billion.

How did we get there? Below is a summary of our analysis using two different methods: Percent of GDP and Percent of Legal Fees

If you want to see the full analysis, check out our White Paper, which dives deeper into the analysis.

 

Percent of GDP

For this analysis, we came up with the following formula to determine the market size:

GDP * Litigation Costs * Contract-Based Litigation

Now, all we have to do is find the variables! (see, you DID need algebra after all).

  • global GDP was $78 trillion and U.S. GDP was $19.4 trillion according to the International Monetary Fund
  • litigation costs averaged 0.57% of revenue for large firms according to this study
  • contract-based litigation represents 69% of litigation according to the Court Statistics Project

Based on this we can calculate the size of the market:

  • Global contract dispute resolution market is $304 billion
  • U.S. contract dispute resolution market is $76 billion

 

 

Percent of Legal Fees

You know the drill! Here’s the market size formula we came up with for this analysis:

Legal Services Market * Litigators in a Law Firm * Contract-Based Litigation

Here’s what we found:

  • U.S. legal services market was $290 billion and the global market was $644 billion according to this report
  • litigators comprise approximately 35% of large law firms’ practice according to this
  • contract-based litigation represents 69% of litigation according to the Court Statistics Project

Based on percent of legal fees, here’s the market size:

  • Global contract dispute resolution market is $156 billion
  • U.S. contract dispute resolution market is $70 billion

 

Putting it all together

The final step was reconciling both of these methods.

The size of the U.S. market was pretty similar in both methods so we decided to use the average of $73 billion. However, the methods were not consistent when estimating the size of this market on a global level. The global estimates were $304 billion and $156 billion. We decided to go with the more conservative estimate of $156 billion (The white paper goes into a lot more detail as to why).

There you have it! Fun right? I think so. The Smarter Contract white paper goes into much more detail about the size of the opportunity and real-world applications of our service. Check it out!

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