Litigation finance will change the way litigation lawyers make money. Litigation finance is introducing a new perspective on legal disputes and how they should be resolved. It is accelerating the evolution of the lawyer to proto-legioeconomist. Their perspective will be grounded in economics and science. Their process will crave algorithms,analysis and modeling.

Litigation assets are proven, prime, high-yield investments. They are plenty and ever-replenishing. Why would any litigator worth his salt not want to invest at least some measure of his wealth in his own litigation assets rather than exclusively take high hourly fees, only to turn his surplus earnings into listed securities that are routinely battered by market malfeasance and pandemics?

What will happen to growth in the legal market when the economy starts to recover from the current crisis? Growth as a strategy will need re-thinking as firms struggle to rebuild revenue streams and are pinched by the changing demands of clients, pricing pressures and reduced headcount. We believe that growth is not dead yet, it can be revived.

None of us are starved for Covid-driven content these days, but Jay Herrington’s article Reinventing Your Law Firm: If Not Now, When? tickled my fancy. Jay evokes a great and powerful image of this troubled time as a positive time for reinvention, re-imagination and (eventually) rejuvenation in the law industry.

Today an article appeared in Law 360, Are Litigation Funding Documents Protected From Discovery? It is an interesting article insofar as it helps lawyers begin to understand the complexities of information flows between them and the traditional litigation funders—those advancing cash to the lawyer’s client that the client can use to pay the lawyer’s fees and expenses.

Eight years ago, at a restaurant in New York the night before speaking at a litigation finance conference, I told Reed Oslan he was probably the first Chief Investment Officer at any law firm in the world.

It was reported today that Spanish-Portuguese powerhouse firm, Cuatrecasas, has completed a partner capital call raising €20 million to deal with Covid-19 revenue shortfalls. (Law.com/International; Spanish Firm Raises €20M With Cash Call to Shore Up Finances) This of course follows months of social shutdown on the Iberian Peninsula and escalating cost-cutting measures by Cuatrecasas globally.

We’ve been here before. Not in the same way of course; the magnitude and length of the disruption caused by the coronavirus pandemic on the economy and the law markets will not be known for some time. However, although a pandemic is a new challenge, severe market disruptions are not.

There’s a lot of chatter about litigation funding these days. Today, the American Lawyer published an article, "Law Firms Flock to Litigation Funders.” True, litigation funding is abundant and often provides needed solutions for the illiquid or impecunious client.

Reforming the legal regime regarding the use of damages-based agreements (DBAs) in the UK is a vital, and long overdue, development. It’s a step that needs to be taken if the settled policy of allowing lawyers to fund cases for their clients in return for a share of the recovery is ever going to become an important tool for financing litigation in this jurisdiction.

Ten years ago, the Institute for Legal Reform (ILR) campaigned to kill litigation finance in the cradle. A decade later, it is clear the ILR failed.   

There is a growing realisation among law firms that they are missing a trick: litigation funders are making attractive returns from assets that are the law firms’ domain, and law firms are handing them those returns. In many respects, this is an example of the world coming full circle in a relatively short period of time.

A fair amount of commentary has been published recently about the opinion issued by the New York City Bar Association’s Professional Ethics Committee (the Opinion) concluding that a popular form of financing for law firms conflicts with Rule of Professional Conduct 5.4(a).