The Importance of Focusing on the Client
The new year has brought a fresh batch of accolades bestowed upon firms that are truly excelling in the practice of law. This week, Law360 named three firms as Firms of the Year and 80 others as firms with practice groups of the year. The publication placed particular emphasis on the strides each “Firm of the Year” made during 2016 in delivering excellence and consistency in client service while taking on high-stakes work that yielded impressive achievements.
Firms taking stock of their own comparative performance can look to litigation finance as a tool for enhancing their capabilities and client service in 2017. In addition to serving as a means for reinforcing a firm’s financial strength, litigation funding provides a way to share risk with clients. In this short interview, Bentham IMF’s New York Investment Managers and Legal Counsel, Dave Kerstein and Jim Batson, explain how Bentham structures its financing deals to enable risk sharing while delivering simplicity, fairness, and transparency.
(text adapted from video)
David Kerstein: All of our transactions are structured differently, but we work off of what we call our 50/50 model, which involves sharing risk between the lawyers, the client, and Bentham. Utilizing that 50/50 model, lawyers or firms can actually increase, or enhance their revenue. Not only by winning new clients, and keeping clients that they have, but by taking measured risk in some of their cases and experiencing some of the upside in those cases. We'll ask the law firm to come up with a budget for the case. Bentham we'll commit to fund 50% of that budget. The law firm would invest 50% of it's time. In that ideal arrangement, Bentham would then take a 20% return only if the case is successful from the proceeds of the case if there's a settlement or a judgement. The law firm would also have a 20% interest in the litigation proceeds if the case is successful on top of the 50% of their fees that they were incurring on a regular basis.
Jim Batson: Because that's fair. We think that's fair, and most people find it fair, and it's sustainable.
David Kerstein: They've been able to get an amazing firm on basically a full business contingency, where they otherwise would not have been able to do so.
Jim Batson: Simplicity, you can understand our deals. Fairness, our clients wind up with at least half and historically Bentham's clients have wound up with over 60% of the returns. And transparency, a publicly traded company with its financials, and its case history publicly available.