Moving on from the Billable Hour

Bentham IMF - Moving on from the Billable Hour

Matthew Harrison - Investment Manager at Bentham IMF
Matthew Harrison, Head of SF Office
Bentham IMF
Priya Pai - Legal Counsel
Priya Pai, Legal Counsel
Bentham IMF

SAN FRANCISCO — Matthew Harrison left the Latham partnership in May to open an office for fast-growing litigation funder Bentham IMF, aiming to bankroll David v. Goliath litigation in the tech industry. "It's going gangbusters right now," said Harrison, a former Latham & Watkins securities litigation partner. "The cases are absolutely rolling in."

For help, he turned to Priya Pai, a former Latham associate. She joined Bentham last month.

The Recorder caught up with Harrison and Pai to find out how Bentham's business drew them away from Big Law, and how they like playing the banker-and-bettor role.

Why did you make the move to litigation funding?

Pai: I have nothing but great things to say about my Big Law experience. Great people, really good work, great training. But when I heard about this opportunity to join Matt at a litigation fund, it seemed like such a unique opportunity. That's what struck me about it. I felt like I could go into a business as a business person. I couldn't think of another instance like that where something would come across my plate. What I really like about it is that I can use my litigation skills here at Bentham, and I can use them to add to the bottom line for the company. And that is just something that is unique and very appealing for me. At the same time, the type of skills that I'm using—it's like high-level case analysis, the type of work that you get to do. And for me that was sort of the fun part of litigation.

What skills does someone need to work at a litigation funding firm that they don't necessarily need at a law firm?

Harrison: I think a lot of it, honestly, carries over. I mean, we look for strong analytical skills, obviously, because you're analyzing whether or not to invest millions of dollars in these cases. One key element that might be a little different for the younger folk or even partners, is you kind of have to have a good sales mentality. And I'm not talking about a used car salesman. You need to just be able to get out there and explain your business, explain to folks why you can add value to them, which is a really fun part of my job. I did a lot of recruiting when I was at Latham, and that was probably one of the best things about my job at Latham, just convincing young folks that this is the best law firm to go to. It's sort of like that now. But I don't think you necessarily have to have that type of skill at a law firm, getting out and getting in front of people.

Pai: It's not a sales mentality, so much as an education mentality. You have to be able to go out and explain the industry and what we offer, because it's still so new, and there are a lot of lawyers out there who don't know that this is available to them. And there's lawyers who view it negatively when they don't understand what we offer. So you have to be able to go out and talk about it and educate folks who haven't heard about it before, which isn't something that you would necessarily need at a law firm.

Harrison: We obviously did a lot of business development at Latham, and they definitely encouraged that. We were very successful in that. But this is BD on steroids. I mean half of our job is getting out there and doing speeches and panels and writing articles and meeting people for lunches and dinners to get the word out. But I think if you spent 50 percent of your time on BD at Latham, you wouldn't last long. Because it's not as big a part of the business, to be honest, especially if you're a younger associate.

About how many hours a week do you work?

Harrison: It varies, especially based on entertaining people at dinners and stuff. I wouldn't even count that, because it's fun. I'd say I get in at 9 or 9:30, and I'm home by 6.

Pai: It's a more traditional 40- or 50-hour work week. It's a wonderful lifestyle change.

What kind of cases are coming to you?

Harrison: As you'd expect, there's a lot of IP, especially patent stuff that comes in. There's antitrust cases, breach of contract. There's some qui tam stuff that's come in. There's employment disputes or partnership disputes. There's also a lot of trade secrets stuff because of the startups. A wide variety of cases, which has made it fun. We've seen some international arbitrations come in. It's made it really interesting to be able to work on all this stuff. But I would say IP is the most prevalent so far.

Obviously with patent cases, we're very, very careful because they're risky. There are many ways to lose, so we have to analyze this carefully before we try to invest in it.

Do you have anything that's made the cut?

Harrison: Definitely. We're very excited about it.

When you see your law school classmates, what is it like explaining what you do?

Harrison: For starters, I explain that I love my job. My wife calls me a lunch funder because I do so much entertaining and outreach. In a nutshell, I just tell them: we invest in meritorious cases for people who otherwise wouldn't be able to bring them on their own. And when the client wins, we get a percentage of that cut. If they lose, we don't get any.

Does litigation funding have a reputation that some might see as unseemly? What effect does that have on your ability to recruit from law firms?

Harrison: You know, Priya and I have worked together for years. She was able to do research and figure out what we do pretty quickly, because she knew that someone that she trusted had left to do this venture. In terms of recruiting, I think a lot it is going to be sort of grassroots. We're not going to be doing OCI [on campus interviews] at law schools looking for people or things like that. I think it'll be more outreach to people we know and trust at various firms. Given they're our contacts, they'll know what we do. … And of course we can just tell them that you don't have to do billable hours anymore.

I can tell you my favorite day so far since Priya started. When we were in here working together, she was highlighting a brief. She looked up with a big grin on her face and said, "I don't need a billing number for this!"