financial analysis

How to Choose A Litigation Funder

Marla Decker

It’s 2019, and litigation finance is going to play prominently in the legal industry this year. Lawyers and claimholders increasingly desire the utility and flexibility of what litigation finance can offer. As demand for litigation funding has increased, so too has the number of litigation funders in the market. Some funders (like Lake Whillans) focus exclusively on litigation financing, while others have added litigation finance investments as part of a larger investment portfolio. The field has matured to the point that Chambers & Partners ranked litigation funders in the U.S. and U.K. last year. (Lake Whillans as a firm, and Lake Whillans co-founder Boaz Weinstein individually, each were ranked among the top bands in the 2018 Chambers rankings).

So if you are a claimholder, a lawyer seeking funding for your client or firm, or law firm management trying to differentiate between funders, how should you be analyzing the options? We suggest there are key differences among funders that you can use to compare:

Update: Rules Governing Disclosure of Litigation Finance

Garrett Ordower

The U.S. Court’s Advisory Committee on Civil Rules signaled in its recently released report that litigation finance continues “growing and evolving” and that considering potential rules mandating disclosure of funding arrangements must begin “if at all, by undertaking a careful quest for information that may be hard to come by.” That process will not proceed…

Litigation Finance Evangelism

Lee Drucker

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.

Doing business with the DoD (then and now)

Lee Drucker

Small businesses face particular challenges when endeavoring to protect their patent rights and rights to technical data. The committee report noted instances where the DoD gave another contractor access to intellectual property so they could “reverse engineer”and manufacture a patented invention. If a contractor feels his or her invention has been used unlawfully, the contractor’s only recourse, according to the report, is to sue through U.S. Federal Court –an inordinately expensive and time-consuming process.

Insights from Research on Corporate Venture in Medtech

Lee Drucker

Medcity New’s article discussing the findings from our research on which medtech corporate venture arms are the best partners:

“The shift in the stage of investment and where the perceived opportunities in biotech are have had a significant impact. Pharma corporate venture investors have broadened their interest from late stage to earlier stages of investment. Priorities have also shifted from the next blockbuster drug to more personalized treatments.

One of the consistent criticisms of corporate investors is the imperfect balance between strengthening the core business and the investment target.”

Read the article in its entirety here.

Litigation Finance: 10 Questions to Help Advise Your Client

Lee Drucker

We, at Lake Whillans, have been writing a lot about litigation finance in order to provide lawyers and claimholders with a framework for thinking about its use and potential benefits. I thought it might be time to take a break from writing, and provide an analytics tool to help claimholders and their lawyers determine whether litigation finance makes sense for the business.

How to Build a Quality Litigation Finance Firm

Lee Drucker

It might seem pretty obvious that picking smart investments is critical for developing a successful litigation funding company, but what might not be obvious are all of the reasons why.

Silicon Valley is a Paradigm for Lit Finance

Lee Drucker

When I jokingly explained that Lake Whillans was not the Iron Bank of Braavos in my last column, I was pretty sure that that was the last article I would ever write about HBO programming. Then episode 2 of season 2 of Silicon Valley aired on Sunday; the episode, titled Runaway Devaluation, depicts a quintessential paradigm for the use of litigation finance (or distressed venture funding, another financial product we provide).

Litigation Finance & Private Equity

Lee Drucker

About a month ago, I discussed the venture capital landscape, and why litigation funders are attractive partners for VCs and VC-backed companies in need of resources to adequately defend their businesses. A similar, but distinct, phenomenon exists in private equity.

Private equity firms (which invest in a broader class of companies and employ a wider array of value generating techniques than venture capital) share some common characteristics that make litigation finance a useful product within the industry.

Cost of Capital in Litigation Funding

Lee Drucker

At Lake Whillans, I spend most of my time valuing litigation related assets. There are many considerations in this exercise, some of which I wrote about here.

Today, I am going to write about cost of capital, which is a key component in valuation. Aswath Damodaran recently wrote:
“If there were a contest for the most measured number in finance, the winner would be the cost of capital. Corporate finance departments around the world compute it as an integral part of investment analysis. Appraisers estimate it as a step towards estimating intrinsic or discounted cash flow value. Analysts spend disproportionate amounts of their time working on it, though not always for the right reasons or with the right inputs.”

Contact Us

The best way for companies and their counsel to determine if litigation finance is an attractive option is to discuss it with us.

Lee Drucker drucker@lakewhillans.com