Tell us a bit about your background and practice.
I was an attorney in New York at Cleary Gottlieb for 12 years, doing a mix of general litigation and bankruptcy. When the financial crisis started to percolate, I moved over almost exclusively to bankruptcy—both out of desire and necessity. I did that until I left the firm in July of 2014 and moved out to California, where I joined a bankruptcy boutique. Keller Benvenuti was founded by two former partners at Jones Day less than a year before I joined and I became their partner three months later.
We represent companies that are in financial difficulty or distress looking for high-quality legal advice but aren’t large enough or have enough cash flow or assets to justify hiring a large firm, with all its attendant fees. Our clients are looking for a firm that is leaner and isn’t going to throw a lot of people at the problem, but gets to the point giving high-level advice. Out here in the Bay Area, there are a lot of start-up-type companies that aren’t well-established but have a lot of promise. Before bankruptcy, we work on bankruptcy prevention and contingency planning. Once a company is in bankruptcy, we’ll represent the companies, creditors, counterparties and potential buyers.
It’s very different than the work I did at Cleary. The issues are similar, and similarly complicated, but the money at issue is smaller. We try to do things leanly and efficiently.
What are your views on trends in litigation which are “leveling the playing field” through technology, funding alternatives, other innovations?
So many things that have made the world a smaller place have had practical effects in making it possible to replicate the quality traditionally associated with big firms at a small firm level: electronic service; the lessened need to appear in person for ministerial hearings and settlement conferences due to the availability of telephonic and video conferencing; the wide range of outsourcing options for administrative functions, such as accounting, marketing, IT, etc.; and the prevalence of legal resources online. That last point is particularly transforming—there are now so many relatively inexpensive sources of knowledge available online that the costly and space-consuming large law libraries that only large law firms could house are now largely obsolete.
Litigation funding helps potential litigants with meritorious claims or defenses realize the strength of that merit, rather than concede prematurely for no other reason than a lack of current funds. Moreover, litigation funding allows litigants to select the best counsel they can for the matter, rather than settle for counsel with less experience or expertise simply because they are more affordable.
For example, in retail bankruptcies, there may be a large group of customers who have strong legal claims to inventory that otherwise would get sold by the debtor, but individual customers likely don’t have enough at stake to put up the expense of a lawyer. Similarly, there are often employees and retirees of companies in bankruptcy who are entitled to certain preferential treatment under the Bankruptcy Code, and the availability of litigation funding may allow them to find qualified counsel more easily to represent them through potentially arduous and complex negotiations.
Can you share with us account of a “David & Goliath” case, where a party was able to leverage new approaches to succeed against a seemingly better resourced opponent?
I’ve definitely been involved in situations where new approaches, and particularly litigation finance, would have helped to level the playing field against a well-resourced opponent. Without getting into specifics, our firm has represented bankruptcy estates where a major asset was a litigation against well-heeled defendants. A significant part of the defendants’ litigation strategy was a scorched-earth tactic designed to prolong the litigation, with the knowledge that the bankruptcy estate had a finite and shrinking pool of funds, to pressure the bankruptcy estates and creditors to accept a less attractive settlement of meritorious claims. Litigation funding could certainly have helped to shift the leverage and not allow the costs of litigation to become a barrier to obtaining the right result.