• Blog

Monetizing judgments to optimize cash flow

The scenario from which a typical, single-case funding arrangement arises is likely a familiar one: A client is unwilling or unable to pay a firm’s hourly rate, but the law firm’s business model can’t support an alternative fee arrangement. The firm may then work with a litigation finance provider to secure non-recourse capital to cover ongoing legal costs—bridging the financial gap between client and firm, while moving the risk from the firm to the funder.

While financing pre-settlement commercial litigation and arbitration matters remains a cornerstone of legal finance (both on a single-case and portfolio basis), financing can also address the problems law firms and their clients may face even after the successful resolution of a case.

Legal fees and awards can be delayed for years when settlements are subject to court approval or other claim administrative processes. This can frustrate clients and law firms, both of whom have better uses and more immediate needs for their capital. Nonrecourse financing from Burford helps claimants and law firms avoid this problem by immediately monetizing outstanding legal assets.

Post-settlement financing enables law firms to monetize completed litigation and client work as early as possible. This helps them lower their contingent risk on fees and reduces their exposure to variables outside of the firm’s control, such as unanticipated delays in the litigation process, uncertain claims requirements and clients’ financial health. Thus, instead of expending years of additional effort and cost, clients can use finance to accelerate their receipt of settlement payments and begin using capital immediately.

Capital needs do not follow a court schedule. Litigation finance provides a tool that can help clients and law firms monetize their legal assets and optimize their cash flow at every stage. And with over $3.3 billion invested in and available for legal finance, Burford is well positioned to help throughout the process, from pre- to post-settlement.