GCs see a commercial role for legal, and room to grow
GCs are ambitious for the legal department’s impact and wish to transcend its outdated cost center typecasting. Over half (54%) say the legal department is understood to add value to the business by pursuing recoveries through litigation or arbitration. An even larger majority (69%) say identifying new ways to add value to the business is the most important means by which in-house lawyers can contribute to the success of the company. However, many see opportunities to do better, and over half (51%) say they need to build infrastructure and process to add value through meritorious affirmative recoveries.
Clients expect law firms to be ready to provide guidance on value generation
GCs expect their law firm partners to be ready to advise and educate them on opportunities to add value, and law firms should thus be ready to present innovative solutions and ideas. A clear majority (65%) say that receiving guidance from law firm partners about opportunities to innovate or add value to the business is one of the most important factors in individual GC success. Six in ten say either that their panel litigation firms have spoken to them about legal finance in the last five years or that the firm’s doing so would have contributed to the company's success.
Legal finance is poised to play an increasingly important role in GC success
GCs see a role for legal finance, especially in relation to their affirmative recoveries. Just under a third of GCs (27%) say their companies have used legal finance. Further, almost six in ten say either that they reviewed legal finance partners in the last five years or that doing so would have contributed to the company success.
Legal is perceived as adding value through recoveries
Just over half (54%) of in-house lawyers say the legal department is understood to add value to the business by pursuing recoveries through litigation or arbitration.
Recovery efforts are core to legal value
Half (50%) of in-house lawyers say that the company pursues affirmative recoveries when they have meritorious claims rather than leaving money on the table.
GCs say adding value is legal’s top impact on company success
A significant majority (69%) of in-house lawyers feel that identifying new ways to add value to the business is the most important means by which in-house lawyers can contribute to the success of the company as a whole.
Affirmative recovery programs need improvement, GCs say
In-house lawyers recognize the inherent benefits in recovering more from meritorious claims and judgments, but more than half (51%) say they need to build infrastructure and process to do so.
Law firms aid individual GC success
When asked about the factors that impact their own individual career success, GCs put a premium on the role that external partners can play. More than seven in ten (71%) in-house lawyers say developing relationships with external partners is important to their individual success.
Reviewing firms and fee arrangements is routine
Not surprisingly, it is common for in-house lawyers to routinely review their company’s panel firms and law firm fee arrangements. Just over half (52%) of in-house lawyers say they have reviewed the company’s panel of firms and fee arrangements for litigation and arbitration in the last five years.
Clients expect law firms to be conversant in risk sharing
Law firms are missing opportunities to engage clients with cost- and risk-sharing options, including legal finance. Nearly three in ten in-house lawyers (28%) say that their panel law firms did not talk about the availability of legal finance to de-risk their litigation or arbitration claims and felt that it would have aided company success had they done so.
Legal finance is poised to play a bigger role
Just under three in ten (26%) say their companies have used legal finance. Directionally, this indicates continued growth as well as significant remaining growth potential.
Reviewing corporate legal finance policy and partners would aid company success
Only three in ten (30%) say they reviewed existing or potential legal finance partners for the company in the last five years and a slightly smaller number (27%) say they considered a legal finance policy for the company. What is noteworthy is the number of in-house lawyers who say that while they did not review legal finance partners (29%) or policies (28%), doing so would have aided company success.
Knowledge of legal finance products varies
While awareness of legal finance has grown, there is an opportunity for greater education around its most sophisticated products. While almost half (44%) of in-house lawyers are very aware of traditional fees and expenses litigation finance, only a quarter are very aware of monetization, which provides companies the flexibility to accelerate or advance a portion of the expected entitlement from a pending claim.
GCs add value through more effective recoveries
Identifying new ways to add value to the business is recognized by a clear majority of in-house lawyers as the most important means by which they can contribute to the success of the company as a whole—begging the question of how to do so.
Certainly, one concrete way legal departments can add value is by ensuring that when the company is harmed and has a meritorious claim, the loss is recovered through litigation or arbitration. Consistent with this, we see corporations increasingly investing in affirmative recovery programs that can transform legal departments from cost centers to liquidity generators for the business. Legal finance has a role to play in supporting these recovery efforts by shifting cost and risk to a third party.
The role of legal finance in an affirmative recovery strategy
- Fund legal fees and expenses associated with pursuing meritorious claims
- Accelerate a portion of the expected entitlement from pending claims or unenforced judgments
- Finance one case or multiple matters (claims and defense) in one facility
- Provide non-recourse capital—when clients win their claims and get paid, Burford earns our money back and a return
- Funding does not impact client control of litigation
- For legal teams lacking robust litigation experience or expertise, Burford can help funded clients identify and prioritize their most valuable claims