Helping a US law firm increase contingency exposure and manage additional risk

Challenge: Law firm needed capital to take on new clients    

A leading US law firm sought to take on a series of high-conviction, similar affirmative claims against major service providers on behalf of large US-based companies. The service providers were allegedly overcharging the companies for the benefits they manage for the companies’ employees and retirees. 

The firm anticipated considerable interest from companies if it offered to work on contingency, but it needed to manage its level of contingency exposure before moving forward with the claims.  

Solution: $35 million+ non-recourse portfolio facility    

As these claims were relatively novel, the firm was unsure of how much they wanted to invest in them. However, they recognized that Burford would guarantee at least a partial realization on their hourly fees expended, helping to mitigate risk and allowing the firm to build a larger book of these claims than they would have been able to do absent funding from Burford. 

The law firm entered into a risk-share portfolio deal with Burford, receiving funding for a portion of the incurred hourly fees and out-of-pocket case expenses for the cases it took on contingency. Burford also assisted the firm in sourcing clients. Based on strong client demand, Burford later extended its commitment to $45 million. 

Impact: Firm grew its business while managing its overall risk exposure    

Burford's portfolio arrangement allowed the law firm to take on blue-chip, Fortune 500 clients they had not worked with before using full contingency fee engagements and maintain its profit margin on the cases, while managing overall risk exposure.