When one thinks about who could benefit from litigation financing, large corporate law firms are not top of mind. But thinking that lawyers at such firms can't utilize such financing is a mistake. If you're at a BigLaw firm, you can realize many advantages from using litigation financing, including:
Helping to build your practice
With litigation financing, partners – especially younger ones who are just starting to build their practice – have greater flexibility to take cases from new clients that normally would not be able to afford BigLaw's hourly rates. Having access to a wider pool of potential clients can make it easier for new partners to build their reputation and grow their practice.
Working with smaller clients who have big claims
Often times it is smaller companies that have meritorious claims involving substantial damages. But they do not have the deep financial pockets to pursue them. These companies need sophisticated representation to address matters which are often complex and likely to trigger a vigorous defense from the opposing party. For BigLaw firms looking to expand their client base, litigation finance can make their services accessible to smaller clients, whom may become larger clients in the future.
Growing the types of representations you undertake
Most BigLaw firms tend to work with corporate clients on defense matters, only taking plaintiff-side work on rare occasions and only when the plaintiff client can finance the prosecution of their claims. Additionally, corporate legal budgets are almost entirely dedicated to defending the corporate client from claims made against it. When corporate clients understand that litigation financing is an option, they may be more comfortable pursuing their own claims, unlocking the value in these otherwise dormant assets and offsetting legal expenses.
Monetizing cases to achieve positive cash flow
Through litigation funding, firms that need an infusion of capital can monetize current contingency cases for equity. Funders can help alleviate any cash flow issues a firm might face, due to accepting a case on a contingency basis, by providing up-front capital in exchange for a share of any future recovery.
Making compensation fair
For attorneys working on contingency-fee cases, it can take years to realize financial payouts – but those payouts can be substantial. Determining appropriate annual compensation for attorneys working on these types of cases can be challenging for many large law firms. Litigation funding can even out their compensation as they work to resolve these types of matters.
Offsetting non-attorney expenses
As e-discovery and other litigation related costs skyrocket, the burden of expenses alone – above and beyond legal fees for counsel – could be detrimental to seeing cases through to resolution. Litigation financing can assume the financial risks these expenses entail over the life of the matter.
Accommodating requests for alternative-fee arrangement
In today's economic climate, corporate clients are demanding lower costs and more efficient services from their law firms. Requests for alternative-fee arrangements as opposed to billable hour arrangements have become the new norm. Litigation financing empowers law firms to offer flexible financing options to their clients while billing the funder in billable hours, allowing the firm to maintain a consistent cash flow.
Conducting risk/reward analysis
Third-party litigation funders can undertake an unbiased evaluation of a potential case, offering early insights into the unique risks each new matter entails. At Vinson Litigation Finance, we use proprietary technology to perform our due diligence with respect to every case we consider for funding. The VLF Evaluation Protocol incorporates online panels of experienced trial lawyers, retired judges, expert witnesses and jurors to perform a statistically reliable, multi-dimensional assessment of the claims at issue and the potential for achieving a satisfactory recovery.
If your BigLaw firm hasn't looked into litigation funding lately, now is a perfect time! While the economy has bounced back from the recent recession, corporate legal departments are still under enormous pressure to work within ever tightening budget constraints. Litigation funding can help both you and your clients pursue cases worth taking to trial. Contact us to learn more.