Friday Funding Series: Portfolio Funding for Law Firms
In the third installment of our Lawline 6-part Friday Funding video series, Bentham IMF’s Jim Batson describes a common financial challenge facing law firms that take cases on contingency. For those that want revenue to flow more consistently, Bentham’s portfolio funding can help.
(text adapted from video)
Jim Batson: What we've talked about so far is providing funding directly to the client. We give money to the client, the client uses it to pay their lawyer's fees, or to pay their expenses, or for the running of their business.
Another type of funding involves portfolios for law firms. There you may have a firm that takes cases either on a full or partial contingency. They have multiple cases in their pipeline that they're working on but they want to take on more or the revenue from contingency cases can be very lumpy. If you get a couple of quick resolutions, a lot of revenue comes in. But then you can go years without revenue while certain cases, such as anti-trust, historically have a really long time period to run.
Litigation funders can provide capital directly to the law firm but only when they're collateralized by multiple cases because there's an ethical constraint for lawyers to share fees with non-lawyers. If there is a one-off case, as I understand it and Brad I'll turn it to you, we can't fund a lawyer's contingency component on a single case.