Law firm Chief Marketing Officers (CMOs) are on the front line of client development, and thus have an unobstructed view of how the legal market for complex litigation is developing. As budget pressures continue to weigh on corporate general counsel, the need for law firms to adjust their pricing to secure new clients is clearly being felt – some firms are now hiring specialty personnel to focus solely on the question of proper pricing. CMOs are thus actively speaking the lingua franca of today’s latest fee structures – from RFPs to AFAs and discounted fees.

Given this, it is surprising to discover that many otherwise business savvy CMOs know little about the emergence of commercial litigation finance. While some are keenly aware of the new industry’s progress – and eager to share their involvement in the funding of multiple cases – others are seemingly unfamiliar with the advent of specialist funding companies and the business development opportunities that they could present for them.

In fairness, due to the often confidential nature of commercial litigation finance, the commercial litigation finance industry has been somewhat constrained in publicizing itself. One example of this is at a recent conference I sat next to the sharp CMO of a top firm who asked me what litigation finance did and what company I worked for. I explained to him that we financed legal fees in multi-million dollar cases, and that we had recently funded a case involving his own firm!

At its most basic level, litigation finance is very straightforward. A third-party funds legal fees and expenses associated with a litigation or arbitration, in return for a portion of the ultimate proceeds (settlement or judgment), if any. Importantly, the funding is typically “non-recourse”, meaning that if there is no recovery for the plaintiff, the litigation financier receives no fee.

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Tags: business development, commercial litigation, Marketing Officers