Five years ago, technology investor and former Time Warner Inc. General Counsel Chris Bogart and Georgetown University law professor Jonathan Molot founded the litigation financing firm Burford Capital.
The concept had obvious appeal. To corporate CFOs, a winning verdict is an asset that can only be realized at some point in the future, while its associated costs — legal fees — are incurred in real time. So rather than spend cash every month to pursue a speculative, far-off asset, Burford finances the litigation costs.
For years, businesses have played hardball with their lawyers, hoping to lower rates and switch to more risk-based arrangements, but the fundamental gap between expenses and revenue hasn’t changed. Burford thinks it’s the answer and has grown quickly. The London- and Manhattan-based firm tripled its investment commitments in 2014 to $150 million, and now has over $500 million invested now to fund major corporate litigation.
