Podcast: Burford Briefings - Biglaw's Embrace of Contingency Litigation

In a recent Burford Briefing, “Biglaw’s Embrace of Contingency Litigation,” David Lat moderated a discussion on the changing economics of legal services and the growing role of affirmative litigation in law firm strategy. The conversation featured insights from Eva Cole (Partner, Winston Taylor), Avi Weitzman (Co-Chair of Complex Litigation and Arbitration, Paul Hastings) and Evan Meyerson (Managing Director, Burford Capital).

Recorded live at the Harvard Club of New York City on May 6, the discussion is now available as a special episode of the Original Jurisdiction podcast.

You can listen to the podcast here.

 

Avi Weitzman: There’s a lot of tunnel vision when you’re the lawyer. There’s a lot of risk that you are so bought in to your client’s case that you’re not seeing the other side. The litigation funders who do due diligence think about the cases in a very sophisticated way.

Evan Meyerson: Leaving this value on the table is not in the interest of your shareholders if you’re a public company or private owners, if you’re not.

Avi Weitzman: The clients increasingly have become much more sophisticated to see the power of affirmative litigation.

Eva Cole: What funding offers is a way to mitigate some of that risk.

Evan Meyerson: If you have a meritorious legal claim, that is an asset. It is an uncertain asset. We don’t know how much you’ll make from it at the end of the day. We don’t know how valuable it will be. But it is an asset nonetheless that you can finance.

Eva Cole: A lot of companies are becoming more sophisticated in looking at potential affirmative cases from a business perspective and thinking about how it can impact business strategy from a larger perspective.

Evan Meyerson: Whether or not we can finance a case, at the end of the day, it’s a math problem.

David Lat: Welcome to the Original Jurisdiction podcast. I’m your host, David Lat, author of a Substack newsletter about law and the legal profession also named Original Jurisdiction, which you can read and subscribe to at davidlat.substack.com. You’re listening to a special edition of this podcast, sponsored by Burford Capital.

The economics of legal services are changing. As affirmative litigation opportunities and alternative fee arrangements gain traction among corporate clients, traditionally defense-oriented global law firms are expanding into plaintiff-side and contingency work to differentiate their practices and drive growth. Legal finance is playing an increasingly important role in enabling firms to manage risk and scale these efforts.

To explore these developments, I moderated a panel on Wednesday, May 6, at the Harvard Club of New York. Titled “Biglaw’s Embrace of Contingency Litigation,” it featured three experts: Eva Cole, a litigation partner at Winston Taylor; Evan Meyerson, a managing director at Burford Capital; and Avi Weitzman, co-chair of the complex litigation and arbitration practice at Paul Hastings.

Without further ado, here’s my conversation with Eva Cole, Evan Meyerson, and Avi Weitzman.

Good morning. On behalf of myself and Burford Capital, I’d like to welcome you to this morning’s Burford Briefing. Our topic today is Biglaw’s Embrace of Contingency Litigation, which I actually wrote about for Original Jurisdiction last month. As affirmative litigation opportunities and alternative fee arrangements gain traction among corporate clients, traditionally defense-oriented firms are expanding into plaintiff-side and contingency litigation, enabling them to differentiate their practices and drive growth. Certainly legal finance has been a very important part of that development, and we’re going to learn about that in today’s discussion.

Today we have a fantastic group of panelists to explore this topic. I have to apologize in advance if I keep on confusing their names because we have Avi, Eva, and Evan, and I’m David. So between four panelists, our names use all of six letters of the alphabet. So again, apologies if I keep stumbling. I’m going to introduce them only briefly, because you’re going to learn about them and their practices in the course of our conversation.

Starting to my immediate left, Avi Weitzman is the co-chair of complex litigation and arbitration at Paul Hastings here in New York. He is a former federal prosecutor here in the Southern District of New York, and he has, over the course of his 25-plus year career, handled more than 20 trials and arbitrations.

To Avi’s left is Eva Cole. She is co-chair of the antitrust and competition practice at Winston, also based out of New York. She focuses her practice on civil antitrust litigation, class actions, and international cartel investigations.

And then to Eva’s left is Evan Meyerson. Evan is a managing director at Burford Capital, where he oversees the underwriting, origination, and portfolio-management functions. He previously practiced at Sullivan & Cromwell and Paul Weiss.

So, Eva, as a litigation partner at a major firm, what have you or your firm handled in terms of plaintiff-side or contingency work? You certainly had one very interesting plaintiff-side matter in the news recently—maybe you can talk about that too.

Eva Cole: Yes, I’m happy to start with that one. Most recently, we were brought in to represent the state AGs in the monopolization trial against Live Nation and Ticketmaster. So I would say that’s probably one of the more recent and high-profile plaintiff-side cases that we have handled. I will say that historically, at least at Winston, we have always had a small bucket of plaintiff-side work. Some of that has grown out of our sports practice; we do a lot of work on behalf of the players’ associations and sports players. So a lot of that has been plaintiff-side. But we’ve also historically represented sophisticated commercial clients that have affirmative antitrust claims against their competitors, against their customers in some instances. And so we’ve always handled a little piece of that as well.

David Lat: Avi, what about yourself? What have you or your firm handled in terms of plaintiff’s side or contingency litigation?

Avi Weitzman: My firm has always handled some level of plaintiff-side work because we have a thriving patent practice—and when you have a thriving patent practice, you often will bring affirmative litigation. That said, we’ve expanded our plaintiff-side work considerably in the four years that I’ve been at Paul Hastings. And we’ve done that in part by accepting more litigation finance and also sometimes just contingency work.

So we represent, for example, the largest group of opt-outs in the Blue Cross Blue Shield antitrust litigation. We represent plaintiffs in founder’s disputes; for example, I’m representing a founder of a large unicorn AI company who was cheated out of shares worth $150 million. We represent plaintiff-side clients in trade secret cases. One of the plaintiff-side cases that my firm brought about a year and a half ago involved a founder who developed a technology that Coca-Cola stole—and so he has a large dispute, a billion-dollar dispute, against Coca-Cola.

There’s a range of disputes. Sometimes they are small or smaller companies who can’t afford large firms and will bring in litigation financing for that, or sometimes they are bigger companies who can afford our fees and either want to do a contingency fee arrangement or want to bring in financing and pay hourly.

David Lat: Avi, have you noticed a change in the mindset of clients when it comes to being the plaintiff? Because historically people might think that large corporations don’t like to be in the headlines for litigation—and when you’re the plaintiff, you’re the one who’s generating the headlines in a way. Have you noticed a change in client attitudes about that?

Avi Weitzman: Clients have become much more sophisticated. Typically, large corporations are fairly conservative: they’re on the defense side, they don’t want to get sued, they’re trying to avoid lawsuits, and they’re not trying to bring lawsuits or develop law that can hurt them later. But clients are increasingly seeing that affirmative litigation can have positive business effects—not just positive bottom-line financial effects, but also positive business effects: it can be a way to develop technology, or address anti-competitive conduct, or whatever it may be. It can have a real positive effect, not just be a distraction.

There are still lots of clients with concerns. We went around to dozens and dozens of hospitals when we were doing the Blue Cross Blue Shield recruiting process, and lots of them said, “Wait, you want us to sue our insurance provider?” And we said, “You already sued the insurance provider; you just didn’t know it. So yes, we want you to opt out now, because the settlement was a bad settlement.” There’s a lot of reluctance sometimes to being adverse to business partners. And so with clients, it takes some coaching, it takes some cajoling at times—but clients increasingly have become much more sophisticated to see the power of affirmative litigation.

David Lat: Eva, what about from where you sit? Have you had issues or challenges in terms of convincing clients? Or have clients been coming to you asking for help, asking how to negotiate or navigate some of the trickier aspects that Avi described?

Eva Cole: I’d agree with Avi that at least from my perspective, a lot of companies are becoming more sophisticated in looking at potential affirmative cases from a business perspective and thinking about how it can impact business strategy from a larger perspective. And particularly in the antitrust space where I practice, because there’s been so much regulatory activity that has been favorable to a lot of big companies going up against other big companies, these companies don’t want to get left behind, in terms of being able to take advantage of the benefits of some of those regulatory outcomes. So they’ve been much more open to exploring avenues to be plaintiffs—and what litigation financing offers them is a way to manage their litigation budgets. There’s a whole host of things that they have to be dealing with when they are defendants. So it’s certainly a little bit more challenging for a business to take on an affirmative case, where they’re unilaterally deciding to bring a lawsuit that’s going to be expensive and that’s going to potentially take a lot of years, especially in the antitrust space. What funding offers is a way to mitigate some of that risk.

David Lat: So I have an interesting follow-up question for you, Avi. You mentioned the Blue Cross Blue Shield litigation, which was actually an antitrust litigation, and of course antitrust law sometimes involves the government. You were a former federal prosecutor. Is the antitrust space affected by the eagerness or not-eagerness of government to be involved? Or more generally, is some of this plaintiff-side activity being driven by government perhaps stepping back?

The Live Nation case is interesting, Eva... this is a fascinating case, by the way, people should look it up if they haven’t followed it. Basically, the federal government was suing Live Nation for antitrust violations—and in the middle of a trial, with a jury already seated, the feds basically settled and were like, “Good luck!” But there were all these plaintiff states that wanted to continue litigating. So they tapped Eva and Jeff Kessler and Winston to basically step in, on a week’s notice or something, to handle this giant case.

Eva Cole: Eight days. Lots of time!

David Lat: Eight days….

Eva Cole: Plenty of time!

David Lat: Okay, more than a week—they had eight days—so that was just a crazy case. But, yes, I guess my question is about government and the role of regulation: is government action—or inaction—playing any role in that?

Avi Weitzman: I do think that there is always interest in government investigations that can help cajole defendants, frankly, into settling. If you can get the government involved as a plaintiff, you’re halfway there, because the last thing companies want is civil or criminal investigations, and when government gets involved, suddenly they see the wisdom of settling with the plaintiffs. That said, you lose a lot of control over a lawsuit when the government comes in—you could lose control over the False Claims Act claims, whatever it may be. So you have to measure what your litigation strategy is and decide whether government is helpful or not. The wheels of government sometimes turn very slowly, in every administration—and you as a plaintiff may want to go a lot faster, especially if you have litigation financing, where the payout to the litigation-finance company or funder sometimes increases as time elapses.

David Lat: Actually, that’s a good note on which to bring in Evan. Evan, I would be curious about what role legal finance playing in all of this. How is it contributing to the increased interest of defense-oriented firms to venture into the plaintiff space?

Evan Meyerson: I wouldn’t call it a full-scale evolution over the last half decade. But when you imagine the transition in thinking among what are naturally very conservative organizations, both law firms and corporate entities, I would like to think that much of that is driven by the idea that Burford pushes into the market every day, which is if you have a meritorious legal claim, that is an asset.

It is an uncertain asset. We don’t know how much you will make from it at the end of the day. We don’t know how valuable it will be. But it is an asset nonetheless that you can finance, just like you can finance your real estate or cash, and what we do should be a familiar form of corporate finance at the end of the day. Now, that’s easier said than done, when you are effectively selling into what has traditionally been the most risk-averse audience you can possibly sell into, which are in-house legal departments and major law firms who have, in fairness, done very, very well with the billable hour in the last many decades.

Nonetheless, when you’re thinking about a pie-expansion opportunity, we’ve found a lot of interested minds and even success in talking to companies. So let’s start there, with the idea that leaving this value on the table is not in the interest of your shareholders, if you’re a public company, or your private owners, if you’re not. And there’s a symbiosis between what a corporate entity could do to bring those claims and the interest of the law firms in retaining those institutional clients.

So if you think about corporate entities that 10 years ago would be on the rare side of the spectrum in terms of pursuing affirmative litigation, there were often the same few law firms that would be willing to represent those corporate entities—and it wasn’t Paul Hastings, and it wasn’t Winston. So what we allow is a smoothing of the path to corporate entities, thinking about a world of opportunity costs where we don’t have to have hard conversations with our CFO or C-suite about building budget in for affirmative claims, we can have places like Burford help us, and law firms saying, “I don’t want to lose Fortune 500 client X to the Quinn Emanuels of the world. I want to retain them within the blanket of the firm. And to do so, I have to be able to compete with the economics offered by contingency-driven law firms.” But as a partner, I can’t go to firm management tomorrow and say, “We are suddenly a contingency law firm.” So how do I do that? I go to a funding source to allow some smoothing of our path to taking on more risk, but not taking all of that risk. And so that combines for an ecosystem that allows litigation finance to play a role.

David Lat: A lot of our audience is familiar with the general mechanics of litigation finance. Evan, can you just briefly describe how it might work sort of at a pretty general level, but then also for the folks who are already somewhat familiar with just, say, how it might work in a straightforward, single-case kind of funding, what are some of the things that are emerging more recently in the market in terms of, I guess you could say, innovations in finance?

Evan Meyerson: Sure. So the memory tool I use, which my team will roll its eyes at because I’m really trying to make it happen, is “two-two-two.” Burford does a lot of things. The vast majority of what we do falls into a bucket that you can describe as two potential counterparties to our deals, either a law firm or its clients; two potential sources of what we’d call collateral or things we’re investing in, either a single case, one single piece of litigation, or a group of litigations packaged together, which we call a portfolio; and two forms that our financing can take.

The most vanilla traditional version is funding the costs of a litigation, the fees and expenses that go into pursuing that. And the other is what we call monetization deals, where unrelated to how expensive or not a given litigation will be, if you have a claim that is advanced or more valuable than others in the funder’s view, we might write you—and you again can be a client, the corporate entity, or a law firm—a check. And those funds might be paid all upfront or over time, but basically in advance of either the damages you’ll get later in time or the contingency fee that you’ve agreed upon with your client. So that sort of forms the universe in which we typically operate.

In terms of innovations, a lot of that is driven by the same thing we just talked about, which is some realization that this really is just a familiar form of corporate finance in a less familiar asset class, which is legal claims (and not in bankruptcy, because this has existed in some way in the bankruptcy space for decades). A healthy company that otherwise could afford pursuing litigation might actually seek outside financing in order to keep budgets and resources focused on the thing that company does best, which is almost always not litigation.

That is a surprisingly novel thought: the idea that I could take my advanced antitrust opt-out that has various indicators of success, from the class action proceeding or from government involvement, and say, “Instead of taking out a mortgage on this real estate my company owns, let me use this legal claim to find some non-dilutive financing solution to inject capital into my company.” It seems obvious to Burford—we pound the pavement on that all the time—but that is a novel thought for most corporate entities. So we’re seeing that change happen in real time. It may not be happening as fast as we want it to, but getting people in a room like this to think about it goes a long way.

David Lat: Burford Capital helps companies and law firms unlock the value of their legal assets. With a portfolio of over $7 billion and listings on the NYSE and LSE, Burford provides capital to finance high-value commercial litigation and arbitration—without adding cost or risk or giving up control. Clients include Fortune 500 companies and Am Law 100 firms, who turn to Burford to pursue strong claims, manage legal costs and accelerate recoveries. To learn more, please visit burfordcapital.com.

I can definitely see the argument for working with a legal-finance firm from the corporate perspective. You have duties to shareholders to maximize shareholder value, and if you have a valid litigation claim, that’s an asset, and if you just leave it there, not doing anything with it, you could perhaps be breaching duties to your shareholders. And certainly companies have core businesses, and they want to focus on their core businesses; they don’t necessarily want to spend large amounts of money on a litigation, since that’s not the business they’re in. So I understand from the corporate perspective why working with a company like Burford could be advantageous.

Avi, from where you sit at a law firm, and also as someone who’s involved in firm leadership and administration, what are the considerations and perhaps advantages that you see for firms in terms of working with legal-finance firms?

Avi Weitzman: So they’re twofold. One Eva already mentioned, which is it really smooths out the economics of the dispute. Most disputes will take years if they don’t settle early. And the law firm model is one where you bill every 30 days and you collect hopefully within 30 or 60 or 90. That’s how lawyers get paid. That’s how law firms count their receivables and their profits per equity partner. And it becomes a bit harder to do that where you’re not getting any money for years down the road. It does smooth out the downside risk and also the economics for the law firm.

The second benefit, and I cannot overstate this, is that you have an incredibly sophisticated legal team at the litigation funders who are evaluating the claims alongside you. There’s a lot of tunnel vision when you’re the lawyer. There’s a lot of risk that you are so bought in to your client’s case that you’re not seeing the other side. The litigation funders who do due diligence think about the cases in a very sophisticated way. They’re familiar with the judges, they’re familiar with the courts, they’re familiar with the defenses, and they’re really thinking, “Is this going to be a winnable claim, and how are you going to win it?” And they’re really a partner often to the law firm and to the lawyers in thinking about the claims and how to monetize them.

And so getting the buy-in from the litigation funder is a vote of approval to your management that we should bring these claims. But it also increases the level of sophistication to your claims and to your legal strategy.

Eva Cole: Avi really hit the nail on the head. From a firm management perspective, it really is managing the risk of the dollars coming in the door, particularly for long-term cases. So it’s a much easier sell to management in some ways if you can come in and say, “Look, the client really wants to do this. They’d like to do it on some kind of contingency. This is a very important relationship to the firm. However, we’re going to have a way, by using a funder, to have dollars coming in the door throughout the lifetime of the case.”

David Lat: As opposed to just a full contingency, where your partners on the transactional side are like, “Wait, we’re not getting paid?” So I guess I can kind of see that.

Eva Cole: Yes.

David Lat: And going to your point, Avi, it seems that in an age where everyone’s talking about lawyers charging $3,500 an hour, or someday a $10,000 an hour rate, the rates also make working with a legal-finance firm more attractive, it seems.

Avi Weitzman: Yes, when you sit in Eva’s position or my position at a law firm, we have to think, “Well, is this case worth my time?” Because if I’m not working on this case, I might be working on a different case, where a client is paying our rack rates. And we really have to evaluate what’s worth our time and what’s worth the law firm associates’ time and the counsel’s time. And so it’s really quite important to do that evaluation and to think about it in a long-term way.

I haven’t heard about a $10,000 rate—I hope we do not get there, I really do. That would be shocking to me. But we’ll see.

David Lat: I went to a breakfast event with a bunch of legal technologists, and they were talking about how AI is going to disrupt anything. And there was sort of a betting pool on when are we going to get to $10,000 an hour. And the argument was, “Look, as AI just takes over a lot of very rote tasks, there will be fewer human lawyers. But the lawyers who are there, who have the ability to do the things that the AI can’t, like stand up and argue in front of a jury or exercise judgment over all of this stuff that the AI has processed in hours or days, which used to take weeks or months—that person will be extremely valuable.” And so people have been asking, “Is it going to be alternative fee arrangements, or is it going to just be very high billable-hour rates?” But we’ll see.

Avi Weitzman: You raise a good point, which is how AI’s disruption of the legal industry will help the Burfords of this world and plaintiff-side law firms. Because the challenge is, how do you control the cost and expense of a plaintiff-side case? Because you can blow your budget so quickly when the defendants, they’re paying hourly or every six minutes, whatever it is, and they’re just throwing everything at you, and you’ve got to figure out a way to deal with that as a plaintiff, in an efficient and economical way. We’re not there yet entirely, but I do think that AI is going to make it much more attractive to bring plaintiff-side cases.

David Lat: Actually, I want to pick up on that in a sec, but what you just mentioned, Avi, actually goes to a question that was submitted by an audience member in advance. In addition to the Q&A we’ll have at the end live, we did solicit questions from you when people registered, and there were a couple of interesting questions.

And I guess I’ll pose this question to Eva. If you’re doing something on a contingency, whether full or partial because of help from legal finance, how do you manage your budget? When you are billing by the hour, it’s easy because it’s sort of a cost-plus arrangement. It’s just, “Well, the hour costs this much, and we bill it out at that much, and there’s just that built-in profit.” Do you have thoughts on how to manage a budget in a case that is on full or partial contingency?

Eva Cole: It’s a great question, and it is one of the big challenges for traditionally defense-side firms to handle these cases. I would also say that very sophisticated companies who are thinking about these cases in a lot of ways still expect a defense-side firm to provide the same kind of quality and level of detail and attention on a plaintiff-side case as they would on a defense-side case. So you really have the pressure coming from both aspects.

So there are a few things, and I’ve seen different partners handle this differently. I’ve practiced with some partners whose philosophy actually is, “It doesn’t matter. Do the case exactly the way that you would do the defense-side case. Have confidence in that. Know that you’re ultimately going to get the win and that you will recoup that investment.” It takes a lot of confidence to take that position.

The more balanced approach is really thinking about budgeting in a way that defense-side lawyers usually don’t. And so I’ve seen all kinds of things. For example, we have a pricing department at Winston that’s terrific, and they can help you put together a budget on a per-project basis where you can really break it down and tell associate X, “You have X number of hours to work on this particular project. Do your best within that amount of time, and then let’s revisit and see where you are.”

So you just have to take a much more affirmative approach on the front end, in terms of organizing the time and prioritizing—that’s a big piece of it too. What needs to get done now? What’s an optional project that you might be able to wait a little bit longer to do, when the things that are higher priorities are finished? That’s how we tend to look at it, just being much more rigorous about setting the budget on the front end.

David Lat: Avi, anything you’d add to that?

Avi Weitzman: No, that’s right. I’ve taken the approach in some of my cases where I say, “Guys, don’t let efficiency be the enemy here. Because we could litigate this case on the cheap and we might lose as a result, and so losing however many X millions of dollars is worse than winning and spending a lot more.” So I take an approach on every decision, “Is this going to make the difference between potentially winning the case and potentially losing the case?” And if it could make the difference, then I say invest the resources.

David Lat: So this is really interesting. It actually goes to a comment that you made to me, Evan, when I was reporting my piece on this, where you said something like, “Look, even if a defense-side firm starts to do some plaintiff’s work, they’re not going to transform themselves into a traditional plaintiff-side, contingency-fee-oriented firm overnight. They’re still going to have a certain kind of mindset and orientation towards the billable hour.” And the column I published in Bloomberg Law today was actually about plaintiff’s lawyers and just how they think of things differently.

And one of the plaintiff’s lawyers I interviewed, Alex Walsh—she had her own firm, now she’s at Anapol Weiss—was saying that it’s a different way of thinking of things. Because when you are in Biglaw and at a defense-side firm, you can explore every legal issue. You have an economic incentive to review every document or take every deposition because you’re being paid by the hour. Whereas plaintiff’s firms that are handling a range of cases, if you’re at a Susman or a Quinn or a plaintiff-side firm, your time is not limitless. And so you have to prioritize. “Do we really need that witness? Do we really need that depo? Do we really need that tranche of documents?”

So I guess, Evan, can you say more about what you meant when you said, “Look, the mindset is not going to change overnight”?

Evan Meyerson: Yes. Going to Eva’s point, a lot of this comes down to client interest, and I can talk about how the financing world intersects with client interest. If your client is interested in a non-monetary outcome that may require a scorched-earth affirmative-side approach, then you do what your client asks, so long as they’re willing to pay for your time.

For Burford, and we try to instill this in our law firm partners as well, whether or not we can finance a case, at the end of the day, it’s a math problem. On the one hand, it will not make sense for a firm to take on a contingency fee if the more likely outcome is you will spend so much time on this case that you actually would have been better off getting paid your hours than the percent of the case you negotiated. That defeats the purpose of this pie-expansion idea of taking risk. And on the other hand, this is an anecdote that is very true at Burford, we will say no to a dead-to-rights liability case where the damages are insufficient to make our funding make sense. You are going to win this case. It is very, very likely you win this case. The damages are not sufficient to justify a $10 million commitment from Burford, because of the return we’ll need intersecting with the amount of damages you’ll get. We will say no to that case because the spending on it doesn’t make sense for the value.

And so that is key, right? No matter what your client’s interest is, it is incumbent on firms to figure out the math, and we can help here. This goes to Avi’s point: we want to be a resource. It is incumbent on the firms advising these clients to show people that the idea of spending $60 million for a case where if we go all the way through trial, maybe it’ll generate $100 million, but more likely you’ll settle for $40 million—that makes no sense. And so that does require some change in thinking among the Biglaw firm advisors who did spend most of their careers perhaps thinking about defense. To be clear, that does not mean that we want lower quality.

The other most important thing to Burford is the team that we are backing. We talk about that all the time, right? The facts are the facts and more times than not, litigation will be determined by the quality of the lawyering involved in that litigation. And it’s immensely important to us that we back teams that we have faith can be good stewards of our own capital. So we’re surely not looking for less quality representation, but it does require a bit of a different mindset in making the economics work when you’re on the plaintiff’s side versus the defense side.

David Lat: In terms of the aspect of counseling and advising clients, Avi, are you seeing clients asking you about the possibility of legal finance, or is this something you are raising with them on your own, or is it something that’s not really quite on people’s radar yet on the client side? How would you describe that?

Avi Weitzman: It depends on who the client is, and it will come in either direction. Lots of smaller companies and individual clients will absolutely raise the issue of litigation financing in the first instance. The larger companies are not as used to it. They have not had to dip into it. And so sometimes we’ll raise litigation funding as an ability, an opportunity to offset their risk and enhance their own budget.

One of the things that I say to clients when we’re trying to bring them in as plaintiffs, for example, is there’s an advantage to hiring a traditional defense-side firm as opposed to the traditional plaintiff-side firm (and I’m not really talking about a firm like Quinn Emanuel, which I really think of as an Am Law 10 firm). It’s not really the plaintiff-side firms that we think about in a traditional sense, whether it’s a Bernstein Litowitz or whatever it may be.

In a way, at a firm like ours, we know what the defense bar will do in a case better than many plaintiff-side firms. But the fear that a lot of companies have is that if they hire a traditional plaintiff-side firm, they’re going to get this scorched-earth approach, and it’s going to disrupt relationships with vendors, partners, or others. And boards—especially at public companies, but also at private companies—are worried about that type of disruption to business relationships.

And so what a defense-side firm can do is give them the comfort that we know how to litigate without that scorched-earth approach. We understand where the levers are and where the pressure points are, but we’ll also be sensitive to their business needs, because we interact with boards all the time. We understand what the boards really care about. And so we want to moderate sometimes our positions to the client’s advantage, not disadvantage. And that’s a very different approach, comparing what a traditional defense-side firm can do when it handles a plaintiff-side case versus what the traditional plaintiff-side, class-action law firm might do.

Eva Cole: I agree with that wholeheartedly. And clients very much understand that, and that’s what makes hiring a defense-side firm for an affirmative case very attractive to them, particularly for the larger claims, particularly when it comes to litigating cases against their business partners. They want that sensitivity brought to bear, and they want kind of a broader business strategy as part of the overall litigation picture to be contemplated.

Also, picking up on another point that Avi made, there is a huge advantage because the defense-side firms know what’s coming around the corner from the actual defense in a plaintiff’s side case, because we’re on that side all the time. So when it comes to drafting a complaint that can withstand a motion to dismiss, we are equipped in a very different way from some of the plaintiff-side firms to do that, and we’re equipped to anticipate some of the more nuanced arguments that the defense-side litigators are going to make in any given matter.

David Lat: Let’s turn to the other side. What are some of the challenges you face as lawyers who do a lot of defense work moving over to the plaintiff-side? Are there challenges in terms of your partners and associates understanding a certain mentality? Do you have a hard time shifting mindset? What are some of the things that might be more difficult or tricky about this?

Avi Weitzman: Probably the biggest challenge is it’s not so much our partners, it’s more so our associates. I always say to the team, “Guys, we’re the plaintiff here. Stop playing defense. Let’s play offense.” I say that all the time to the team. “What’s our strategy? What are we doing? Let’s look ahead. Let’s carry the ball forward 10 yards every day, and let’s figure out how to get into the end zone.” (I fortunately did not mix up my sports metaphors; maybe I should have gone with the Knicks on that one, “Let’s figure out how to get 140 points.”)

But I always say, “We’ve got to think like a plaintiff. What is our strategy here? How do we get them to settle? How do we press the pressure points to bring them to their knees? How do we get to the board, get them to change their mindset?” Whatever it may be, I tell my associates, “We’ve got to think like plaintiffs.” It is very different than thinking like a defendant.

Eva Cole: To that point, I will share an amusing anecdote. So I had a plaintiff-side case that I handled a few years ago. And again, it’s always been kind of a piece of my practice, but a small piece. So we got a proposed pretrial schedule from the other side, the defendants in the case. And I opened it. It’s in the middle of my day. I’m looking at a bunch of other emails. I open it, I scan it, and my first instinct is, “Oh, this seems like an extremely reasonable schedule.” And then I stopped and said, “Oh no, wait a minute. This is a case where I’m the plaintiff. This is a terrible schedule. This is going to take way too long.” So there is a mind shift that you have to have: you have to think like a plaintiff and you have to be a little bit more aggressive, which is fun.

Another fun but also challenging aspect is that as a plaintiff, you are thinking a little bit more about the PR piece in a way than on the defense side, where it’s very much damage control when you’re thinking about PR. On the plaintiff-side, you’re thinking about how PR can help advance your positions and your claims and the way that your case is viewed in the marketplace more broadly. And that’s a piece of it that adds a very interesting strategic layer, when you’re working often with PR firms and thinking about how to shape the public-facing story of a particular case.

Evan Meyerson: Eva’s point about schedule is enormously important. And there’s two sides to that coin. On the one hand, when we are in the market talking about what Burford does, again, to what can be one of the most conservative audiences one can have in any market, the mindset often of the people we’re speaking to are, “How do I prevent a loss? How do I not lose money?”

Eva Cole: Definitely.

Evan Meyerson: And the thing that we want people to think a little bit more about is, “Obviously we don’t want you to lose. That is bad for everyone, no question about it. But the thing that our capital can help with is also duration.” Burford is exceptionally good at many things, and we’ve told the market this many times. The thing that we, even as the experts in our space, admittedly continue to struggle with—and this will probably resonate with some in this room—is predicting with much certainty the schedule for how a litigation will resolve. There are so many unknowns in the various inflection points that get you from the start of filing a claim to resolving that claim that the duration of litigation weighs very, very heavily on every financing decision.

And so to Eva’s very well taken point, the thing that Burford is constantly talking to our law firm partners about is, don’t blindly accept every extension request on your litigation schedule, even if you would have sought the same extension as a defendant. Time is money, and letting these litigations go on for three, four, five, seven years, it is in no one’s interest, least of all your client’s, certainly not in Burford’s. So pushing the schedule and trying to overcome the duration uncertainty that’s attendant on every litigation is enormously important when thinking about being on the plaintiff-side.

David Lat: The duration point is actually very interesting to me. This is perhaps a little bit of a digression, but Evan, I had a very interesting conversation with one of your colleagues, Aviva Will, about this—and maybe this is a little bit of a plug for Burford—but Burford is a public company.

Evan Meyerson: We love those. Aviva’s right there, too.

David Lat: Burford’s a public company. It has its own capital. And so if a case does take longer than expected, Burford actually has the financial wherewithal to stick it out. A lot of other litigation finance firms operate on a kind of fund model, where there’s a particular period of time, a particular duration, there’s a window for the investors to get their capital back. And so at a certain point, a funder other than Burford might kind of get a little antsy, and they may have reasons or incentives to do certain things that maybe are not in the interest of the litigation. I don’t know if you agree with Aviva on that.

Evan Meyerson: Well, I agree with Aviva on everything, and certainly that. That is, of course, true about Burford. And I would say two things. One is it is certainly right that one of the distinguishing features for us as a business, Burford specifically as a business, is that we are a public company. And that means a couple of things for every counterparty or potential counterparty to one of our deals. One is you can see into our business in a way you can’t with a private fund. We have quarterly and annual reporting obligations, and we put out 10-Qs and 10-Ks, and you can read all about us. And that level of transparency is very unique in our market.

It also means that you can have a greater level of certainty because of that transparency in knowing that Burford’s ability to fund what can end up being pretty long-duration events won’t be dictated by our ability to raise the next fund. Oftentimes in any litigation funding deal, we are committing to a multi-year event. We’re saying, “We will give you up to $10 million towards your litigation that may take four years.” And when we make that commitment, Burford is a bit unique in being able to say, “You can look at our balance sheet and see that we’ll be able to fund it,” as opposed to, “You’ll have to take a leap of faith that we’ll be able to raise a new fund in two years to actually be able to afford doing it.”

The second big point—one that Avi made earlier, which applies to our industry as well—is comfort and trust. One of the big sales points for why a client should stay with the law firm that does their defense work is that the firm knows the client in and out better than any other firm on the planet. And that goes a long way to being an effective representative in a plaintiff-side litigation. The same can be true of your litigation funder.

What I tell people all the time, and this is often the most eyeroll-worthy part of our pitch, is that we are genuinely smart money, and we are a partner. And then oftentimes we get the response, “Yes, but what does it cost?” There’s a certain level of dismissiveness that I get when we make that pitch. But what I try to tell people—and it’s always a little bit hard—but those who have worked with us get it, and it’s that you can always figure out who can you negotiate with that you can make cheaper at the margins. That tiny amount of money you saved upfront is going to mean nothing when you have to have the hard conversation about a budget overrun or litigation taking too long or whether to settle a case. And so what you should be thinking about at the outset is, “Who do I want to have the hard conversations with?” Not, “Who do I want the cheapest capital from?” And that is something our repeat counterparties have experienced with Burford more times than not.

David Lat: Eva or Avi, any final observations you wanted to make?

Eva Cole: What I would say is that litigation funding really offers a new way for longstanding firm clients to think about taking advantage of potential affirmative claims. I would say from the firm perspective, having a process in place for how to think about litigation funding, contingency funding, what cases you’re going to take, having somebody who understands how the process works is really helpful because so many of our partners are not familiar. So I would say if it’s something that your firm is interested in, I would take the time to invest on the front end in terms of getting your ducks in a row, thinking about the process, thinking about who’s going to become the expert on this particular subject, because it will make all the other cases that you fold in under the umbrella go along much more smoothly.

Avi Weitzman: We’re talking about dollars and cents, and fundamentally litigation funding does provide the opportunity to become a plaintiff. I want to talk about something else, which is how much fun it is to be the plaintiff. I was a federal prosecutor for many years in the Southern District of New York, and it was the privilege of a lifetime. I got to be the plaintiff over and over again, standing up in court and saying, “It’s a privilege and an honor to represent the United States of America in this criminal case,” or whatever it was.

And every case, whether it’s a trade-secret dispute or an antitrust dispute, is about prosecuting wrongdoing. It’s about prosecuting wrongdoers. And there’s always a narrative of wrongdoing that you get to stand behind and say, “It’s a privilege and an honor to represent this client as they’re trying to remedy this evil scourge of this wrongdoing,” whatever it may be. And I love that. I love standing up and saying that I’m doing something that’s important for society as the plaintiff or important for my client. There’s always something bigger than just my client.

And I thank litigation funding for giving me that opportunity because normally I’m playing defense, and it’s a very different narrative when you’re on the defense. You’re going second, you’re not going first, you’re not able to persuade the jury in the same way or the judge in the same way. It’s very hard on the defensive side as a result. It’s a lot of fun, but it’s also a bigger challenge on the plaintiff’s side. A defendant sometimes can throw up 10 arguments and has to win just one. We have to run the table on the plaintiff’s side in order to win: we have to run the table on liability, we need to run the table on damages, and that’s very challenging and very strategic. And I just think it’s a blast to be a plaintiff.

David Lat: Thanks so much to Eva, Evan, and Avi for joining me. I enjoyed and learned a great deal from our conversation, and I hope my listeners did as well.

This transcript has been edited from the original audio for clarity and readability, including the removal of verbal fillers and, where appropriate, the addition or adjustment of words to clarify meaning. The transcript was originally edited by David Lat’s team at Original Jurisdiction and appeared in connection with this Original Jurisdiction post.