Bentham IMF Launches Litigation Funding Task Force Guide for Firms Managing Their Way to Profitability

Last month, The American Lawyer noted a new trend as it reported its annual AmLaw 100 and 200 rankings: law firm management triumphing over market volatility. Statistics gathered by the publication indicate that firms are managing their way to prosperity in an otherwise unpredictable market. In fact, some sources, such as David Barnard of Blaqwell, Inc., point to the ways that firms are managing volatility as indicative of their potential to move past it being a threat at all within the near future. 

Litigation finance stands out this year as one of the few new management tactics that law firms are using to achieve increased profitability. The American Lawyer reports that when firms handle contingent cases, which were historically a driver of big swings in firm revenue and profits, they are using litigation funders to help smooth out the financial impact. 

Indeed, law firms that use Bentham IMF’s portfolio financing mitigate the risk they assume when taking cases on contingency. Typically, they do this by using our financing to cover a percentage of the amount they would earn from the portfolio cases if they were handling them on an hourly fee basis (essentially converting a contingency fee matter into a “hybrid” matter). Since our financing is nonrecourse, the firms retain the funded amounts even if the portfolio cases ultimately result in unsuccessful outcomes. 

Firms are also leveraging our financing to take on more contingency cases, and therefore avail themselves of opportunities to earn far more than they would earn in hourly-fee matters, without being overexposed. As we’ve demonstrated in recently published case studies on plaintiff-side portfolio financing and defense-hybrid portfolio financing, using funding often positions firms to earn higher revenues than they could earn by handling the cases without funding. 

As we’ve worked with firms seeking to use litigation finance, we’ve noticed a consistent need for guidance around how to systemize its adoption. We’ve responded to that need by developing a Law Firm Guide for Establishing a Litigation Funding Task Force. Covered topics include:

• Understanding the benefits of litigation finance compared to bank loans
• Learning the ABCs of funding, including:
  • The funding process
  • Typical funding models
  • The mechanics of capital deployment and returns
  • Funder roles and responsibilities
  • Preservation of confidentiality and attorney-client privilege
• Realizing opportunities to increase firm profitability with funding
• Setting firm-wide policies about litigation funding
• Forging relationships with funders

Click here to download the free guide or contact us for a consultation about how litigation finance can help your firm increase its profitability, expand alternative fee options for clients and smooth cash flows.