Expanding a firm's client base (not its risk profile)
Patent & IP
US-based national law firm
Current and future patent matters
Challenge: Firm with funding fatigue risked turning away new clients
A US-based national law firm had growing patent litigation deal flow but was in danger of having to turn away future clients unless it could find a partner to share contingency risk. The firm had previously sought fees and expenses funding for cases but was tired of having to negotiate terms for each individual case.
Solution: $15 million facility to support and streamline new business
To help the firm mitigate risk and alleviate the administrative burden of financing individual cases, Burford provided $15 million in capital to cover partial fees and all costs for selected patent matters.
The assurance of having financing available for future matters ensured that the firm would not have to turn down a strong case or a new client simply because it could not absorb additional risk. In addition to the potential growth benefits associated with the capital, the arrangement also created cost and administrative efficiencies for the firm. Because the risk to Burford was cross-collateralized over a pool of cases, the overall cost of the capital was lower than it would be on a single-case basis. And by bundling financing under a single umbrella arrangement, the firm could avoid the investment of time and resources required by financing matters on a one-off basis. Still, the firm retained the de-risking benefit it had enjoyed with its previous fees and expenses agreements: The firm would repay Burford’s $15 million plus a return only if the firm won and the case generated cash and would keep any excess funds recovered after paying Burford’s return.
Impact: Expanded growth opportunity and reduced administrative burden
With Burford’s portfolio financing in place, the firm could expand the number of patent cases it took on risk without approaching the market for funding on an individual basis—allowing the firm to focus on litigating, not deal making.