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5 minutes with… Craig Arnott

July 1, 2020
Craig Arnott

Earlier this year, you became Burford's Deputy Chief Investment Officer. How does your new role impact clients?

New and prospective clients are often focused on the process of obtaining capital; rarely do they place equal emphasis on what happens after Burford makes a commitment. Ultimately, though, what happens after the commitment is just as important as the commitment itself.

Burford has a case management function for existing matters—and in my new role I oversee this function, focusing on its ongoing development and professionalization. While it’s important to note that Burford does not control the cases in which it invests, we do leverage data and collective experience to help clients optimize results. We not only provide our clients with capital to pursue their claims, but we also offer guidance and expertise that can lead to better outcomes.

What is unique about Burford’s case management function?

Firstly, many legal financiers lack such a function. The mere fact of it separates Burford from many other players in the space. Similarly, Burford performs all case diligence in-house, whereas many finance providers outsource such diligence. Both sides of our commitment team—those who work to diligence and close deals and those who monitor cases after Burford has committed capital—come from the world’s leading law firms and financial institutions. Of the 130 people at Burford, we have over 60 lawyers on staff, which gives us a team with unparalleled experience.

Secondly, Burford has deployed more capital in its history than any other legal finance provider. As a result, we have a rich set of proprietary data that not only helps inform our diligence process, but also can help inform strategy for those clients who wish to avail themselves of such insights.

Burford’s business—and legal finance writ large—emerged out of the global financial crisis to help law firms and their clients access capital in a cash-constrained environment. As the global economy enters a potentially lengthy recession, how should law firms and companies be thinking about legal finance?

Prospective legal finance users should think of the category as a way of pursuing meritorious litigation and arbitration without using cash that is likely better spent elsewhere. For law firms, this might mean exploring more creative fee structures or sharing risk with a company like Burford to allow for an inflow of new business. For in-house legal departments, third-party capital is a powerful corporate finance tool that can bridge the gap separating them from their law firm of choice in a litigation or arbitration matter that may represent desperately needed inflows of cash. Legal finance provides liquidity in an environment that is constrained and likely to become even more so, and it will be an increasingly essential tool to allow for claims to proceed efficiently.

Your work at Burford is inherently multijurisdictional and global. Given that COVID-19 has all but eliminated travel and face-to-face meetings, what impact has this had on the broader legal industry?

I am heartened by how well the legal industry has functioned despite the challenging circumstances. It’s difficult to say whether the changes we are seeing in day-to-day operations, both of the courts and between law firms, clients and finance providers, will persist once the world returns to a relative equilibrium. But I think we have seen from this crisis that the legal industry is resilient and better equipped to handle an increasingly digital environment. I would not be surprised if the industry achieves some new efficiencies on the heels of this challenging period.

As a matter of course, lawyers spend a great deal of time in their offices. Having come from a law firm background yourself, how have you adjusted to working remotely?

In many ways the disruptions to my normal routine have created opportunities. For instance, the time I once spent commuting to an office can now be spent helping clients and doing the work needed to move Burford’s business forward. That said, I do miss seeing my colleagues. Thankfully, Burford’s robust IT platforms have allowed me to stay in close contact with my coworkers. And as conditions in London continue to improve, I am expecting we will be back in the office in the not-too-distant future.