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. Litigation funding (also referred to as litigation finance or alternative litigation finance) was born out of a realisation that contingency fee arrangements, especially in the US, gave law firms an effective monopoly to co-invest in litigation with their clients. Litigation finance broke that monopoly by giving outside capital a chance to participate in litigation returns, a prospect that turned out to be both lucrative for the funders and quite useful to law firms (especially those without the capacity or the culture to take on contingent fee cases) and their clients. Fast forward a decade or so. Now, law firms in jurisdictions like the UK, which only recently allowed US-style contingency fee arrangements in commercial litigation, are looking to the funder’s outsized returns and exploring  the tools available for capturing more of them.

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