“Big Law” Joins the Litigation Finance Movement

Large law firms, often known collectively as “Big Law,” have the resources to offer many valuable services to their clients. As litigation finance is becoming available from an ever-widening pool of funders, Big Law is joining the movement as several large, prominent firms have partnered with funders to make financing available to their clients. This approach has helped these large firms continue to grow their books of business.

Litigation financing is appealing to some Big Law firms because it permits them to take on riskier plaintiffs-side work, which might be unavailable to them if they applied their traditional fee structures. For example, a Big Law firm might have an established relationship with a commercial client, performing mostly defense-side work. If that client has a plaintiff-side case but is not willing or able to pay ordinary hourly rates, the firm can still accommodate the client by working with a third-party litigation funder. Thus, Big Law firms are increasingly developing on-going relationships with funders, so they can offer this kind of alternative.

Litigation funding can help Big Law in another way as well. An increasing number of junior partners at Big Law firms are starting to use litigation funding as a practice development tool. By pointing to the availability of litigation funding, they can reach out to new clients who might not be able to afford the firm’s regular hourly rate.

Some noteworthy examples of this practice come from England. In 2014, it was revealed that White & Case had relied on litigation financing in its representation of a Pakistani drinks manufacturer in a licensing dispute. In 2016, Quinn Emanuel announced that it had received investment from a U.S.-based funder to represent a group of debit and credit card holders in the United Kingdom, who were bringing a claim against MasterCard.

There is less information about how large U.S. firms are partnering with funding companies. Most firms remain closed-mouthed about whether and when they are partnering with funders. But Paul Hastings has offered litigation finance to its clients, by partnering with outside finance firms, for about a year now, according to Yar Chaikovsky, global co-chair of the firm’s intellectual property practice. Many of his clients prefer to pay for their litigation the traditional way, but that others “don’t want to pay full rates, and they’re happy sharing the returns with the financer,” he said.

keywords: litigation finance, third-party litigation funding, Big Law, practice development

Work Cited:  Stephanie Russell-Kraft, Big Law Embraces Litigation Finance, Big Law Business (March 23, 2018) available at https://biglawbusiness.com/big-law-embraces-litigation-finance