Key findings
Economic pressures impact how clients manage their costs and partners
- A majority (52%) say they are likely to seek cost-sharing solutions with counsel or legal finance providers to mitigate the impact of the current economic climate.
- Although many say they are likely to implement cost-saving measures to mitigate these impacts (44%), in-house lawyers seem to favor cost-shifting over cost-cutting.
- Aside from relevant legal expertise, the top attributes in-house lawyers seek in outside counsel are efficiency and speed (89%), the ability to provide accurate budgets (87%) and familiarity with legal finance (69%).
Unenforced awards remain a problem—even more so in the current climate
- Vanishingly few senior in-house lawyers (2%) say they recovered 100% of the value of their judgments and awards over the last five years.
- A clear majority (61%) say that their opponents voluntarily pay their outstanding judgments and awards less than 50% of the time.
- The consequence of slow-to-pay or fail-to-pay judgment debtors is many millions of dollars in lost value to businesses at a time when legal teams wish to minimize costs and maximize recoveries.
Cost- and risk-sharing are increasingly important
- 61% of senior in-house lawyers say that uncertain or challenging conditions would impact their likeliness to consider legal finance solutions.
- Eight in ten (80%) view the ability to pursue claims and recoveries that will bring value to the business as an important benefit of commercial legal finance.
- A majority (57%) of senior in-house lawyers say they are likely to use financed enforcement and recovery services for a pending judgment or award.
Businesses are seeking cost-shifting solutions for disputes
Many are likely to implement cost-shifting and cost-saving measures to mitigate rising disputes in an uncertain economy.
Efficiency and budgeting accuracy are the most important attributes for law firms
Nearly nine in ten (89%) of senior in-house lawyers view efficiency and speed as an important attribute for their outside counsel, closely followed by 87% that view the ability to provide accurate budgets as key. More than two thirds (69%) also view familiarity with commercial legal finance solutions as important in a law firm partner.
Businesses are leaving money on the table
Vanishingly few senior in-house lawyers recover 100% of the value of their judgments and awards—demonstrating the need for funded recovery solutions.
Defendants are reluctant to pay judgment debts, and do so slowly
Most (61%) say judgment debtors voluntarily pay outstanding judgments and awards less than half the time. 50% also say judgment debtors delay payment—often drawing out enforcement and increasing costs to frustrate collection.
Economic factors impact choices about legal partners
Businesses are increasing considering legal finance solutions
Economic uncertainty increases the appeal of legal finance
In-house lawyers recognize the inherent benefits of funded enforcement
Immediate liquidity is a key benefit for funded enforcement and recovery
The top benefits of financed enforcement are access to immediate liquidity (77%) and cost reduction (72%).
Creditors often accept discounts on the full value of judgments and awards
40% say judgment debtors mostly negotiate discounts on awards and judgments to speed up recovery—not surprising given that judgment creditors have already spent significant sums on litigation and arbitration.
Maximizing value and minimizing costs are top legal finance benefits for GCs
The top cited legal finance benefits are the ability to pursue claims and recoveries that will bring value to the business (80%) and minimizing the impact of legal spend on profitability (70%).
Barriers to enforcement include jurisdiction, cost and other factors
81% say they recovered less than 85% of the judgment and award value in the last five years. Top perceived barriers to enforcement are jurisdiction and cost.
Pursue claim recoveries and enforce judgments without adding cost.
Senior in-house lawyers recognize that new solutions are needed to equip the legal department to navigate uncertain economic times. Legal finance can equip businesses and their law firms to do so strategically and cost-effectively.
The role of legal finance in an uncertain economic climate
- Advise on recovery strategy and budgeting: Legal finance experts can help businesses and firms prioritize and fund pending claims, judgments and awards.
- Shift cost and downside risk: Clients can pursue high value claims with fees and expenses funding, shifting cost and downside risk to a third party without impacting control.
- Accelerate capital for the business: Burford can advance some of the expected entitlement of pending claims, judgments and awards, locking in guaranteed recovery and providing immediate liquidity.
- Enforce judgments on a full or partial-contingency basis: Burford’s in-house asset recovery and enforcement team can help clients turn legal paper into cash, assuming cost and risk of enforcement in exchange for a return tied to whatever recovery is generated, removing the risk of pursuing assets for the client.
