This post was contributed by Karen Kaplowitz. She is the founder of The New Ellis Group, and has been a business development strategist and coach for over 20 years. She publishes a blog on business development strategy for lawyers. http://www.newellis.com/MondayArchive.html. Her clients are partners in major law firms throughout the United States. Karen, a graduate of the University of Chicago Law School, was a partner for nearly 20 years in a Los Angeles litigation boutique, Alschuler Grossman & Pines. Karen can be reached at firstname.lastname@example.org.
If you have been looking for a niche that will help you attract new business from inside and outside your firm, one of the most promising areas is litigation funding. A wide range of lawyers in your firm need to be able to navigate litigation funding: transactional lawyers need to advise clients on the finance aspects of major litigation; litigators must advise clients who are considering potential claims of the various financing options available to them; and law firm leaders routinely evaluate the security and profitability of the firm’s fee arrangements with clients. Expertise in litigation funding has become a core competence. Being an expert in litigation funding used to be a competitive advantage. http://www.newellis.com/PDFs/2017/NewEllis-030617.pdf. But with the increased availability and acceptance of litigation funding, lawyers’ having experience with litigation funding– and funders—is a necessity and any firm lacking in this area will be at a distinct disadvantage.
Can you be your firm’s litigation funding navigator, the “go-to” lawyer who is consulted internally and who also attracts clients and external referrals? To position yourself as the “go-to” firm resource on litigation funding, plan to master several tasks:
- A thorough understanding of the options in litigation funding including the variations on how deals are structured; whether there are ethical or other restrictions in your state on third party litigation funding; how to maintain control of the litigation; and when and how to inform adversaries of your use of litigation funding.
- Establishing relationships with litigation funders. You don’t need to know all of them, but you need to have access and credibility with some funders to present viable options to clients and prospective clients.
- Understanding the difference among funders. How long will they take to evaluate your matter? How sophisticated are they about the types of cases that you are likely to present to them? What kind of ongoing support will they provide? What kind of track record do they have in successful litigation investments? Will an investment by a particular firm constitute an endorsement of the likelihood of success of your claim?
- Ability to negotiate a litigation funding agreement.
- Communication skills to present the litigation funding options to the firm’s management as well as to a client’s board and leadership.
If you are willing to become an expert in litigation finance and to play a key role in your firm’s access to and proficiency in litigation finance, here are some ideas on how to proceed:
- Start following the case law on the permissibility of litigation funding in jurisdictions which are relevant to your clients and your firm. There is a lot of variation among the states. https://abovethelaw.com/2017/06/the-best-and-worst-states-for-litigation-finance-part-i/.
- Attend seminars offered by litigation funders. Lake Whillans for instance provides continuing legal education courses on the ethics of litigation finance (for more information, contact Lake Whillans at email@example.com).
- Present programs on litigation funding to key constituents in your firm: the CFO; the management committee; transactional lawyers; litigation practice groups. You may want to start with litigation practice groups which attract litigation funding from litigation funders you know. For example, if you have a relationship with Lake Whillans which funds breach of contract, trade secret misappropriation and breach of fiduciary duty claims, you would want to connect with the lawyers in your firm who handle those kinds of matters.
- Consult with experienced lawyers in other firms about their perspectives. You can obtain the names of lawyers in other firms from litigation funders who will usually provide names of references.
- Encourage lawyers in your firm to include you in early discussions with clients about their litigation finance options.
- Get ready to spring into action to offer your clients and your firm a litigation funding option in appropriate situations.
Especially if your firm’s clients are sophisticated, your firm will be confronted by clients who specifically ask for your guidance on their litigation funding options. Your firm’s management will also be considering whether they can fund whole portfolios of cases to enhance the financial performance of your firm.
Is this an opportunity for you to stand out in your firm and to clients and prospective clients as an expert in the vital analysis of whether to bring litigation and how to fund it? Can you become an evangelist for the most cutting-edge litigation funding options and build your own practice and strengthen your firm’s competitive advantage?