At its inaugural annual conference on October 24 in New York, the International Legal Finance Association (ILFA) gathered a group of founding partners and law firm leaders to discuss how to build high value law firm practices.
“One of the ways you get premiums is to keep down the lodestar, the amount of investment in the case. If you just take every single issue and litigate it like it's the most important issue in the case—which is more of a defense strategy—it's going to be a lot harder to generate premiums because your lodestar is going to be much higher. So I think funders look at it from the perspective of: What is the investment? What are you going to spend money on? What's your budget? I find funders do a good job of due diligence early in the case where they're really trying to identify right from the get-go what the three or five most important issues are that if we prepare those issues, we should win. And then if you spend all your investment on just those issues, you tend to be more disciplined.”
- Phil Iovieno, Partner and Co-Chair of antitrust litigation group, Cadwalader
Partner and Co-Chair of the antitrust litigation group at Cadwalader, Iovieno reinforces the budgeting and cost management benefits of working with a legal finance provider, ultimately ensuring a greater rate of return both for clients and the law firms that serve them in contingency cases.
Law firms and companies that work with a professional legal finance provider like Burford get more than capital: They get a long-term partner in alignment with them who is focused on maximizing the value of the claim and managing case expenses. Senior in-house lawyers cite the high cost of litigation as a deterrent to pursuing valuable claims and judgments, particularly when operating under stringent cost management programs or budget cuts. In a recent survey, while three of five senior in-house lawyers believed that it was possible to predict with a high degree of accuracy what litigation matters will cost, nearly half said that their outside law firms do not provide accurate and reliable litigation budgets.
While legal financers are passive capital providers, they regularly confer with their counterparties about both the prospects of the litigation and the set of likely investment outcomes. A legal finance provider positions itself as an additional team member—an extra set of eyes and ears—and do their own substantive analysis so that they have the most complete possible picture of where the case is headed and when and on what terms it may be resolved.
About the panel
The panel was moderated by Charles Schmerler, Senior Managing Director & Head of Litigation Finance, Pretium, the panel included Natasha Harrison, Partner, Pallas Partners LLP; Phil Iovieno, Partner, Co-Chair Antitrust Litigation Group, Cadwalader and Jennifer Selendy, Founding Partner, Selendy Gay Elsberg.
