Partnering to Add Value

January 16, 2019

It’s the season for firms to roll-out their partnership announcements, and the team at Bentham congratulates newly minted partners! It is a big deal.

The path to partnership is challenging. Meeting or exceeding annual billable hour thresholds; forging tight relationships with influential partners at the firm; mentoring more junior lawyers; building a network and book of business; all while generating top-notch legal work product. Further, it seems that hard work alone may not be enough. A successful partner must add value to the firm (e.g., bring in new clients and work), while also adding value for clients (e.g., delivering great results on a manageable budget).

As part of the search to add value, successful lawyers consistently explore new ways to offer their services to clients. Litigation finance is one such strategy.

How can litigation funding add value for firms and clients?

Bentham offers a range of funding structures which can help lawyers, firms and their clients. Here are two examples:

Scenario #1 – client with meritorious litigation. Whether a client is cash-strapped or well-resourced, innovative counsel can add value by raising the option of funding the claim.

For a cash-strapped client, Bentham’s funding allows that client to pursue the case with top-tier counsel. Rather than sending the client out the door, the lawyer can bring in a new client and the funder will pay the bills.

Even where a client is well capitalized, it may be reluctant to allocate resources to litigation. Bentham’s funding can be used for fees and disbursements, thereby freeing up the client’s capital for other strategic opportunities. Furthermore, funding may present an attractive way for a client to achieve budget certainty or to shift risk.

The potential benefits to the lawyer and the firm are clear: a new mandate, a party who will pay the fees, and a well-served client.

Scenario #2 – funding a portfolio of cases within a firm. An enterprising litigator may see contingency based work as an area for opportunity. By considering a portfolio funding structure with Bentham a firm may unlock contingency opportunities while reducing the firm’s risk and generating cash flow.

In a portfolio funding structure, Bentham provides non-recourse capital to the firm based on a portfolio of three or more commercial cases. The firm handles the cases on a contingency basis, but the firm receives a steady cash flow from Bentham. Upon success of one or more of the cases, the firm pays Bentham a multiple (usually 2x – 3x) of what Bentham has advanced. If none of the cases in the portfolio succeed, Bentham receives no return.

This approach allows an enterprising law firm to pursue contingency based claims and offer flexible fee arrangements to clients, while at the same time allowing the firm to more accurately predict its income, and to offload some risk to Bentham.

To learn more about how commercial litigation funding benefits law firms while aligning their interests with those of their clients, contact us.

 


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