Burford co-founder and Chief Investment Officer Jonathan Molot authors a piece for Legal Week and Law.com International on how outside equity investments in law firms are the future of legal innovation.
Molot writes that “Pursuing private equity investment through an ABS offers the flexibility of capital law firms seek to invest in growth and expanded offerings, without opening themselves up to capital market fluctuations or greater public scrutiny of firm operations.
“Legal finance companies, which are becoming increasingly prominent as finance experts for the legal sector, are natural partners for law firms that embrace the ABS model. In equity financing arrangements, the legal finance provider takes a minority position in the ABS. The immediate cash injection allows firms to make long-term investments without sacrificing post-tax partner capital...
“… It is likely that in the coming months and years, we will see increasing interest in law firm equity investments as a way for law firms to innovate, grow and better serve clients."