Big Law Accepts Litigation Funding at an Increasingly Higher Rate

Litigation finance originated in Australia during the 1990s.  Shortly after its inception, the industry traveled to the United Kingdom.  From there, it has come to the U.S. as the inequality has become more widespread in the justice system.

Seeing as the business of litigation finance has growing so significantly, it has forced big law firms to take notice.  More big law firms than ever are using litigation finance as a practice tool to entice clients to utilize their services who otherwise could not afford them.  Thus, big law firms have realized that litigation finance benefits both their clients and themselves.

Cyrulnik, an attorney, gave the following scenario “let’s say… you have an established relationship with a client, and [they] come to you with plaintiffs’ side work, you know they’re getting pushback internally, and you can say to [them], if you want, we have relationships with funders, so we can get this financed for you.”  Cyrulnik further continued to state that if a client could not afford the lawsuit was brought up in this scenario, the client would usually opt for funding.

Paul Hastings, another attorney, spoke more about litigation finance.  He stated that many of his clients prefer to pay for their litigation themselves, without the help of a financer.  However, for others who don’t want to pay the full rates, they’re happy to share some returns in exchange for a financer’s help.

Additionally, as litigation financing continues to grow, new financing structures aside from single-case funding have also developed that big law firms seem to favor.  Big law firms are now starting to accept a new financing structure called portfolio funding.  Portfolio funding is where litigation financers invest in multi-case portfolios.  This allows both law firms and financers to spread out their risk.

20 years ago, most law firms would not have even batted an eye at litigation finance.  Now that time has passed and the industry has become more accepted, it is becoming more relevant than ever before.  The future is bright.

Keywords: litigation finance, portfolio funding, financed, growing, big law

Work Cited:  Stephanie Russell-Kraft, Big Law Embraces Litigation Finance, Big Law Business (March 23, 2018)