Global Disputes Forecast
With the global market for Artificial Intelligence predicted to reach $244bn in 2025, large organizations are bracing for disputes relating to cyber security, data privacy and AI.
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In a Baker McKenzie survey of 600 senior lawyers: 45% said cybersecurity and data privacy disputes are the leading concern for the year ahead, driven by the increasing frequency and sophistication of cyberattacks, coupled with stricter regulatory requirements. 44% identified AI as a likely cause of disputes, as its use becomes more prominent, in tandem with ethical and data privacy concerns. Cyber and data compliance issues in the supply chain are front and center The interconnected nature of modern supply chains means that a breach in one organization can have cascading effects on others. “A target can be disrupted by attacks being focused upstream or downstream, so the threat plane is broader than ever before, and this presents a big challenge for securing critical infrastructure, which now more than ever relies heavily on globally distributed private enterprise,” says Vinod Bange, partner, London. Accordingly, concerns about cyber insurance coverage gaps – and disputes over claims – are also on the rise, as organizations face increasingly sophisticated threats. But the task is complex: 34% of respondents indicating cybersecurity/data privacy as a disputes risk area expressed concern about managing increased board-level accountability. Ethical questions rising to the fore in AI disputes AI presents a diverse landscape of disputes risks for organizations in 2025. Primary concerns revolve around data privacy and security, as well as ethical disputes. Many jurisdictions around the world have introduced AI guidelines which seek to advance inclusive growth, environmental sustainability and overall benefits for society. However, legal teams continue to wrestle with ethical issues such as unintended bias in recruitment algorithms, customer chatbots or facial recognition technology. Meanwhile, fragmented regulation only increases risk – particularly for AI-related intellectual property disputes. Isabella Liu, partner, Hong Kong, explains: “AI regulation remains very much driven by jurisdictional nuances, including the patchwork of existing IP laws. Ultimately, court decisions are likely to look very different across jurisdictions, due to the nature of how local law views and/or defines the concepts of IP ownership, validity and infringement, and the specific nature and use of the AI tools at issue in each case.” When it comes to IP-related disputes, businesses are concerned about AI-underpinned output being at risk of IP infringement. Additionally, questions around ownership and protectability of content produced by or with assistance from AI can also invoke issues of IP ownership, enforcement and management. Employment disputes are also anticipated, driven by new legislation and evolving workplace dynamics Outside the data/cyber and AI space, 32% of respondents to our survey anticipated employment dispute risk, driven by economic pressures, evolving labor laws and remote working. Competition scrutiny was a leading risk. Equal pay considerations are another key concern, prompted by regulations such as the EU Pay Transparency Directive. Celeste Ang, principal in Singapore notes, “Multinationals generally want to take a consistent approach across all markets in which they operate. If they update their practices in response to developments in the US, for example, then typically, they will want to evaluate that approach across their global network.” Read the full Global Disputes Forecast Report for more information about our findings, including sector-specific trends.
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Board level training should be kept refreshed so that addressing cyber risk is meaningful"
Driving accountability from leadership can help to boost the efficacy of cybersecurity measures. “Board level training should be kept refreshed so that addressing cyber risk is meaningful, effective and positively impactful to a cyber readiness eco-system that is fit for purpose,” says Bange.
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Tool Results-based finance
Tool Public/private partnerships (PPPs) Concessional finance
Tool Project finance (nonrecourse or limited-recourse financing)
Tool Debt financing facilities and equity investment
The gap between the amount of climate adaptation finance needed and the amount available is significant. Finance for adaptation purposes needs to increase fourfold, and the private sector can play a critical role in bridging the gap. It is a challenge for institutional investors and commercial banks, as explored in Climate Adaptation Finance: Unlocking Private Finance. With the global environmental crisis worsening, decisive action is needed. We map out the financial tools available below that could help fund the gap.
Tool Debt-for-impact (or nature) swaps
How it works A sovereign debtor, whose debt is trading at a discount, repays existing debt by issuing new debt at or near par value of a lower face amount, directing a percentage of the savings to finance local climate adaptation projects.
How it works PPPs are a mechanism for governments to procure and implement public infrastructure and/or services using the private sector's resources and expertise. Concessional finance can help close any "viability gaps." Where governments are facing aging or a lack of infrastructure and require more efficient services, a partnership with the private sector can help foster new solutions and bring finance.
Use cases Typically, a PPP is a long-term contract between a private party and a government entity for providing a public asset or service, in which the private party bears significant risk and management responsibility; for example, energy and power (waste to power), transport, water, and sanitation. There is no standard definition of a PPP, but it covers many types of agreements between public and private sector entities.
Key Benefits By reducing investment risk and through incentivization, it can unlock private finance's collaboration with a range of partners, especially when the return on investment would otherwise be inadequate. This helps to simplify traditional project finance structures.
Challenges Scaling these initiatives can be difficult, and public funds may not always be available or may be subject to onerous terms.
Challenges Up-front costs can be high, including the need for extensive due diligence and risk analysis, which can be a major hurdle for lenders.
How it works Direct debt or equity investments are made into a project via a special purpose vehicle, whether on a commercial or concessional basis. Lenders and investors rely primarily on the projected cash flows generated by the project to repay debt and earn returns on invested capital.
Use cases These financing structures are typically used for large, complex and capital-intensive projects, where the project itself is established as a legally and economically self-contained entity. They are used across a variety of sectors, including energy, mining and infrastructure.
Key Benefits Project finance often falls under the Equator Principles, which provide a risk management framework for determining, assessing and managing the environmental and social risks associated with project financing.
How it works Debt financing can take several forms and be provided by private investors or commercial banks, often alongside concessional finance and equity investment providers.
Use cases Debt financing has versatile uses across a range of project types.
Challenges Projects require agreement between the parties on well-balanced goals that are both challenging and achievable. They involve intense, suitably qualified monitoring, and verification processes.
How it works This is debt or grant funding for a project that depends on achieving specific goals. This may include impact notes, climate bonds and conservation trusts.
Use cases This is suitable for blended finance, offering favorable repayment terms or bonuses for achieving goals.
Key Benefits This ensures a real focus on achieving maximum positive impact, which in turn will lead to returns on investment.
Tool Guarantees
Tool Grants
How it works Grants are nonrepayable or interest-free funding. These help with technical assistance funding and project preparation facilities.
Use cases Grants are suitable for projects with little commercial potential or where funding is required to bring them to an investable stage.
Tool Liquidity instruments
Challenges Negotiating and securing a guarantee can be a lengthy process and come with stringent, prescriptive terms.
How it works Third-party guarantees are used to repay funding where a borrower defaults.
Use cases Guarantees are available from local or multilateral development banks or sovereign entities in relation to a wide range of projects to attract investment.
Tool Local currency swaps
How it works These are grant or debt facilities that provide immediate access to funding.
Use cases The varying nature of the products captured within this category means they can be used in a wide range of projects that might encounter difficult or unexpected circumstances.
Key Benefits These are appropriate in emergency situations, especially where there is insufficient financial and technical capacity.
Key Benefits These facilitate access to funding in foreign currencies (where foreign capital providers can be reluctant to provide capital in domestic currency), helping borrowers diversify their funding sources.
How it works These protect long-term finance options in local currency through fixed and inflation-linked swaps, designed to mitigate the risks of currency and interest rate fluctuations for climate investments.
Use cases These are commonly deployed to support investments in emerging markets and to hedge against currency and interest rate volatility.
Use cases Ecuador's 2023 USD 1.6 billion debt-for-nature finance swap is the largest in value to date. Benefitting from political risk insurance and a development bank guarantee, new bonds were issued on more favorable terms than existing ones that traded at a substantial discount. USD 300 million of "savings" was spent on marine conservation around the Galápagos Islands.
Key Benefits
Challenges
Use Cases
Challenges These swaps depend on credit support provided by multilateral banks and development finance institutions, which have limited capacity. Private finance must step into these roles to increase capacity for transactions.
Key Benefits The insurer's and the development bank's prudential strength enables refinancing on a more favorable basis, creating savings.
Key Benefits Debt financing can help to bridge funding gaps for challenging projects and provide risk-sharing solutions for concessional funding providers and equity investors.
Challenges Debt financiers will require a return on their investment so are likely to require intense due diligence and impose stringent terms and close monitoring.
Key Benefits Grants provide funding for crucial projects that might not otherwise attract investment.
Challenges Funding is limited, making access challenging, and may be subject to strict conditions.
Key Benefits Guarantees are useful where a borrower has a poor credit record, or it is otherwise necessary to reduce project risk.
Challenges Due to the circumstances in which these types of instruments are sought, providers may impose strict requirements, including high fees.
Challenges Currency swaps represent an additional cost to obtaining financing and can be unsustainable in developing countries unless subsidized.
Trending Toward Pay Transparency
Stephen Ratcliffe Partner, London
Paula Talavera Partner, Madrid
Agnes Herwig Counsel, Frankfurt
Breaking Down the Concept of "Equal Work" Like roles: the same role Work rated as equivalent: differing roles rated as having equivalent value under a job evaluation scheme Work of equal value: differing roles that are deemed to be of equal value to the organization, accounting for the efforts, skills and other requirements of the role. These requirements extend outside the scope of basic pay, encompassing other contractual, pay-related terms including commissions, bonuses and allowances. Learn more about equal pay issues Tune into our Diving into Diversity vlog series to learn more about how UK and multinational employers can navigate emerging equal pay requirements.
A Global View Similar pay transparency regimes are coming into force around the world:
North America Washington, DC, Minnesota and Vermont (effective July 1, 2025) have joined California, Colorado, Illinois, and New York, among several other US states, to mandate pay transparency in job postings.
Latin America In 2023, Brazil passed a law promoting pay transparency, requiring organizations with 100+ employees to report salaries and compensation criteria every six months. It is the first pay gap reporting regime of its kind in the region.
Asia Pacific In 2023, Australia’s government introduced legislation requiring employers with 100+ employees to publicly disclose gender pay data, along with a new workplace right tackling pay secrecy – employees are now permitted to ask any other employee about their remuneration.
Key Steps to Navigate New Pay Transparency Requirements Staying ahead of new pay transparency requirements and reporting obligations means that employers and HR professionals must prepare to accurately collect, assess and report this data – and do so in a legally compliant manner that accounts for local data privacy considerations. Preparing for these reporting requirements before they come into force is key to ensuring regulatory compliance.
Prepare your organization Baker McKenzie's Equal Value Assessment (EVA) solution can conduct a standalone equal value analysis of the roles in your organization, with a view to identifying the correct groups within which to identify and report on pay gaps.
Ida Cederborg Senior Associate, Stockholm
Much has been discussed about the increasing importance of transparency in the workforce, driven by evolving employee and stakeholder expectations and new regulation coming into force globally. The EU’s upcoming Pay Transparency Directive is just one example of new regulation that will require increased transparency in relation to worker pay. Multinational companies will need to act now – conducting audits, assessing policies and preparing for these new reporting requirements on the horizon.
What is The EU Pay Transparency Directive? The EU Pay Transparency Directive must be implemented across the EU member states by June 7, 2026. It introduces measures aimed at making it easier to identify gender pay inequality and therefore enforce the right to equal pay for men and women doing equal work, requiring among other things: In-depth public reporting on gender pay gaps in respect of not only the same roles, but those that are assessed to be of ‘equal value’ If gaps of 5% or more are found that cannot be explained by non-discriminatory reasons, joint pay assessments involving worker representatives Pre-employment pay transparency measures and a prohibition on asking job applicants about their pay history Clear criteria for pay determination accessible to both workers and representatives and individual rights to pay information
The transparency compliance obligations set forth by the EU Pay Transparency Directive will be further amplified by the Corporate Sustainability Reporting Directive (CSRD), which includes its own set of employment-related disclosure requirements.
Nick Bryans Partner, M&A London
Elizabeth Ebersole Partner, Employment and Compensation Chicago
Mergers and Acquisitions (M&A) can be a powerful tool for transforming a business. However, M&A is not a strategy in itself—it’s an enabler. To maximize value, it's essential to look beyond financial metrics and align acquisitions with broader organizational goals. This requires navigating complex legal and regulatory environments and integrating corporate cultures. This guide explores the five critical challenges that must be addressed in orchestrating transformative deals. Challenge 1: Strategic Alignment and Justification While it may seem obvious, any successful M&A deal must clearly align with broader business strategies and have well-articulated rationales with quantifiable benefits driving long-term goals. Anchoring decisions in long-term value creation rather than short-term wins positions companies for transformative success. Transactions should be deliberate steps toward sustainable competitive advantage, with disciplined focus and robust due diligence essential to validate strategic fit and mitigate risks. Challenge 2: Navigating the Regulatory Labyrinth Regulatory complexities are a significant challenge when closing deals. With over 100 countries having active merger frameworks, transactions face multi-jurisdictional reviews, extensive filings, and detailed information requests. For example, the E.U. demanded 2.7 million documents for a recent life sciences acquisition, adding cost and time burdens. Sectors like technology face heightened scrutiny and complex divestment remedies. Proactive planning, upfront work, and a clear roadmap are essential to overcoming these hurdles. Challenge 3: Cultural Integration and Workforce Alignment While financial synergies usually dominate discussions, cultural integration and workforce alignment are the true linchpins of long-term success. “The cultures of the organizations involved must be understood and assessed to ensure a smooth integration that maintains morale,” explains Elizabeth Ebersole, an Employment and Compensation partner based in Chicago. Companies need to evaluate factors such as core values, communication styles and engagement levels, as these foundational differences can significantly impact integration. Engaged employees are typically more resilient and adaptable to change. Even seemingly minor differences in workplace policies, such as remote work flexibility, can influence morale and integration success. Conducting early cultural assessments and fostering transparent communication can bridge gaps and build buy-in, ensuring smooth integration and maintaining morale. Challenge 4: Post-Acquisition Integration Closing an M&A deal is just the beginning. True success lies in the post-deal integration phase, where clear objectives, meticulous execution, and senior leadership engagement help to realize benefits. "For every hour spent on the acquisition, you need to be prepared to spend significantly more on integration," says Nick Bryans, an M&A partner based in London . Experienced companies are typically better at managing M&A complexities and cultural integration. A recent multi-billion-dollar acquisition in the consumer goods and retail sector demonstrated the importance of top leadership involvement, with the CEO and CFO fully engaged and leading every aspect of the deal. Without senior management's oversight, even well-structured deals can falter. Their commitment is essential for navigating priorities, ensuring alignment, and securing employee buy-in. Challenge 5: Compliance and Safeguards in the Age of Activism With the rise of shareholder activism, transparency and proactive engagement with investors are essential. It's important to consider shareholder reactions to major acquisitions and communicate the strategy and rationale clearly before announcing deals. Listed companies are accountable to shareholders and subject to activist scrutiny. Addressing their concerns constructively can prevent public disputes. This will nearly always require good communication and, at times, measured concessions. Listening and acting on shareholder feedback might suffice in some instances, while more significant steps—such as offering board representation or recalibrating strategic priorities—may be necessary in others. Legal counsel can help prepare for activist challenges and productive engagement, considering broader implications, including reputational risks. Proactive dialogue and acknowledging vulnerabilities are more effective than combative approaches. Preparing for the Future of Transformative Deals In today’s dynamic environment, it is crucial to identify the right opportunities, execute and successfully integrate deals that create lasting value. Addressing operational, cultural, and strategic challenges from the outset ensures M&A remains a powerful tool for long-term success.
Consumer Goods and Retail US companies will need to re-assess their supply chains Trump’s tariff agenda will likely increase the cost of imported goods for US companies, prompting US-based manufacturers to re-assess their supply chains with a view to onshoring manufacturing facilities. Growth opportunities are on the horizon An overall more merger-friendly regulatory environment will open up investment opportunities in the sector. ESG should remain a priority While the US is likely to take a less aggressive approach to ESG moving forward – or even halt or reverse ESG policies – for global multinationals, there is still a need to continue investing in these initiatives.
Take a glance at how the Trump administration is shaping the global business environment on a sector level.
Healthcare and Life Sciences Uncertainty is the new normal – for now So far, Trump has provided little detail on plans to regulate surprise medical bills, price transparency and prescription drug prices, and the appointment of Robert F. Kennedy, Jr. as Secretary of Health and Human Services signals additional reforms to federal health agencies and regulatory changes. The sector is poised for growth Reduced federal oversight, lower interest rates and more favorable tax policies have the potential to boost sector investment and growth. Reform of FDA regulations and policies At FDA level, expect new regulations and practices with potential shorter approval procedures and relaxed regulations.
Technology Expect more pro-business regulatory policies across key areas Tech companies can generally expect fewer rules and regulations and a lighter touch approach to AI policy compared to the Biden administration. Regulatory scrutiny for the crypto industry is also expected to decrease as Trump has pledged to be a "pro-innovation and pro-bitcoin president.” Antitrust scrutiny for Big Tech expected to stay the course The new leaders for the Department of Justice's (DOJ) Antitrust Division and FTC indicate the continuation of antitrust scrutiny for Big Tech and large deals in the sector.
Industrials, Manufacturing and Transportation Expect increased import duties and customs clearance obligations Because of Trump’s wide-ranging tariffs agenda focusing on products originating outside of the US, globally operating manufacturing companies can expect increased import duties and customs compliance obligations. Many may strategically evaluate reshoring operations and restructuring supply chains to avoid a tariff hit. 25% and Mexican tariffs will impact strategy for automotive companies Automotive companies will be particularly impacted by Trump’s tariff agenda, which imposes 25% tariffs on all car imports to the US. In relation to separate tariffs imposed on Mexican products, many automotive businesses have set up manufacturing operations in recent years particularly to service the EV market. Businesses may seek other markets The Trump administration’s proposed tax cuts for US based companies, when combined with tariff impacts and other incentives for US production, could also lead to manufacturing businesses reshoring to the US or seeking other markets for their products.
Financial Institutions Rollback of sustainability regulation The new administration is expected to roll back many federal laws and regulations related to sustainability and climate change. For example, the “Unleashing American Energy” executive order pauses funding under the Inflation Reduction Act for climate and clean energy investments to allow their basis to be reviewed. Beware of reputational risks The Trump administration's policies on raising tariffs together with a tougher approach generally to countering China and Iran will see geopolitical risk remain heightened. Financial institutions face reputational risks for being on the "wrong" side of a conflict. For example, further sanctions and other measures toward China are likely to increase regulatory risk for financial institutions with substantial interests in that country. Lighter touch approach to regulation The new administration is adopting a lighter touch approach to regulation, including the financial sector. We expect a less activist approach and the end to what has been labeled "regulation by enforcement." New supervisors are likely to relax recent measures, although, alternatively, some steps might run into the "America First" agenda with respect to foreign institutions.
For the latest on what to expect from the Trump administration, visit our Looking Ahead hub.
DEEP DIVE
Looking Ahead: Spotlight on Food & Beverage
Looking Ahead: Spotlight on Luxury, Fashion & Cosmetics
Looking Ahead: Spotlight on Technology
Looking Ahead: Risk-Based M&A
2025: What's on the Radar for Financial Institutions
Key areas to watch for CG&R companies The introduction and impact of retaliatory policies from countries impacted by tariffs. Whether Trump will prevent his Tax Cuts and Jobs Act (TCJA) tax cuts from expiring at the end of the year.
Key areas to watch Future AI policy following Trump’s AI executive order aimed at “sustaining and enhancing America’s global AI dominance in order to promote human flourishing, economic competitiveness and national security”. The order directs a few specific roles within the administration to develop an Artificial Intelligence Action Plan within 180 days (i.e. by July 22, 2025) to achieve the policy objective in the order. A new Federal regulatory framework governing digital assets, which the newly established Working Group on Digital Asset Markets is tasked with developing, under Trump’s executive order “strengthening American leadership in digital financial technology”. The Working Group is to report to the President recommending regulatory and legislative proposals that advance the policies in the order, within 180 days (i.e. by July 22, 2025).Further debate around the H-1B visa program (which enables US companies to hire foreign workers for specialty occupations).
The headwinds and tailwinds at play for tech companies Increased opportunities for dealmaking arising from Trump's pro-business policies and proposed tax cuts could be dampened by inflationary impacts on valuations and financing costs in the sector.
Key areas to watch Trump’s continually evolving tariff plans and retaliatory tariffs from Mexico and Canada. Retaliatory policies from countries impacted by tariffs, e.g. tariffs now being imposed by China on US products, which could further impact supply chains.
Key areas to watch for FIs The appointment for SEC chair will influence the direction of travel for crypto and regulation. Congress may enact laws and federal agencies may enact rules targeting the adoption of ESG principles by financial institutions. A focus is likely to continue across all agencies on cybersecurity (although much-criticized SEC rules on cybersecurity disclosures may be relaxed). Reduction in corporate taxes and US's response to other countries' implementation of the new OECD Pillar Two rules.
Key areas to watch The impact of tariffs on the life sciences industry leading to increased costs and supply chain disruptions. The emergence of a more favorable M&A environment for life sciences companies arising from reduced Federal Trade Commission (FTC) intervention. Specific policy or legislative proposals that will help lessen current uncertainty for healthcare and life sciences companies.
International: The impact of tariffs on the life sciences industry
Why ethnicity in law matters Voices from the Firm
The importance of ethnic diversity in the legal profession cannot be overstated. Recent changes in the political landscape, shifting business priorities, economic pressures and the reevaluation of inclusion, diversity and equity (ID&E) programs have opened up the debate around ID&E and its priority in the workplace. At times of change and crisis, inequalities can be magnified, making it crucial to maintain momentum toward greater diversity. The business case for diversity is clear. Diverse companies are more profitable, innovative, resilient and adept at operating in a global market. Ethnicity in law The percentage of lawyers from a minority background has been rising steadily in the UK.
19% of lawyers are from a Black, Asian and minority background.
77% of lawyers are white.
18% of the UK population are from a Black, Asian and minority background.
While the pace of change has been gradual, diversity and inclusion initiatives focusing on ethnicity are making a positive impact and are important.
The studies speak for themselves. When you have a diverse team, you are more likely to meet the needs of and connect with a broader audience. Clients expect us to reflect them, which is why ethnic diversity in law is important. If you only surround yourself with people who think and look like you, you won’t be able to reach a broader audience or benefit from diverse perspectives, experiences and ideas that can drive creative solutions."
Seher Budak Senior Associate, Stockholm
Part of my identity is being a person of color growing up in South Africa during apartheid, where there was systemized discrimination against people of color that oppressed and undermined their potential. There is a personal agency to contribute to the project of catching up in relation to race. It’s important to me having seen very clearly within my lifetime a very unequal world and then going into a world where we are trying to undo a lot of that.’
Lerisha Naidu Managing Partner, Johannesburg
Benefits of ethnic diversity Ethnic diversity allows for cultural exchange, promoting better understanding and friendship between different cultures and backgrounds. It enhances a business' ability to serve a broader range of clients effectively and also boosts employee engagement.
Having diverse thoughts and experiences in the workplace not only helps in finding various solutions for clients but also enhances interactions among employees. It fosters an understanding of how different individuals operate, leading to a more inclusive and effective work environment.’
Imran Chohan Senior HR Manager, UAE
Challenges remain, advice for the future Bias and discrimination will remain significant challenges, underscoring the importance of ID&E initiatives that offer practical steps in how to deal with them. Shying away from them is not an option.
Never be afraid to speak your mind because at the end of the day the only way people are going to learn is if they know what you are thinking as opposed to being tight-lipped and conforming with everybody else. You should feel free to be who you are.’
Muhammed Ismail Practice Assistant, London
Maintaining progress towards greater ethnic diversity in the legal profession is crucial. By boldly embracing diversity, organizations can ensure their longevity, relevancy, and future success. Companies that embrace diversity efforts may find that it is the differentiator that helps them to thrive. At Baker McKenzie, we are committed to creating a more diverse, inclusive, and equitable Firm, for everyone. Read more about our progress on inclusion, diversity and equity
