Year-end planning is universally frustrating to law firms and companies alike. Firms struggle to balance the urgency to collect outstanding hourly and contingent fees with challenges such as delayed payment, damaged client relationships and lower profits. Meanwhile, their clients’ finance teams bear the burden of dealing with the negative accounting treatment of litigation as well as the prospect of delayed collection on recoveries ahead of earnings season.
To meet this clear market demand, Burford has developed solutions to help law firms and their clients finance litigation and legal costs more efficiently in the fourth quarter and gain immediate access to capital at the time of year when costs are the most highly scrutinized.
Fee and award acceleration
For law firms, Burford can accelerate payment for outstanding hourly or contingency fees and other legal receivables. Firms immediately recognize the revenue they’ve earned, and are spared the effort of hounding clients to pay outstanding bills (clients who are focused on their own fiscal year performance).
For companies, Burford can accelerate payment for awards that are delayed by administrative proceedings. Where staged payment settlements exist, Burford can purchase some or all of the outstanding legal receivables—providing lump sum payments that otherwise would have taken years to pay out.
Fee and award monetization
Burford can also help law firms and their clients in instances where a significant award exists, but additional legal proceedings (such as an appeal) make timing or even the ultimate receipt of the award uncertain. Burford can purchase a firm’s contingency fees or a client’s outstanding legal receivables—enabling firms and clients to manage risk and unlock the value of their claims.
Securing year-end legal finance
The fourth quarter is the busiest time of the year—lawyers and CFOs have neither the time nor the inclination to divert their attention away from the core areas of their businesses. As a result, Burford’s team works quickly to ensure firms and clients have access to the capital they need, when they need it (we once monetized an eight-figure contingent fee matter with an Am Law 25 firm within ten days of our initial conversation with the firm).
Burford’s year-end legal finance process consists of three steps:
- Collateral review: After signing a confidentiality agreement, Burford reviews case materials to confirm post-settlement collateral, or reviews billing records to confirm fee receivables
- Pricing and term sheet: Burford assesses pricing, including factors such as likely time to repayment and payor credit risk, and provides a term sheet for matters in which we wish to invest
- Investment: Burford provides definitive documentation and execution of the deal
Year-end legal finance provides immediate access to the funds law firms and clients with outstanding receivables are entitled to—making payment more convenient and less risky than waiting for the claims to resolve on their own.