Litigation Finance, Litigators, Money

Litigation Finance Firms: Clients Tell Us About The Players That Matter

Findings from the first-ever survey of client experiences with litigation finance firms.

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Today, we share some findings from the first-ever survey of client experiences with litigation finance firms. Commercial litigation finance is of course a nascent industry: none of the firms rated in our survey date back any further than 2007, and most are of very recent origin. (Although Bentham US is a subsidiary of the Australian firm that claims to have originated the practice of litigation finance back in 2001.)

Unsurprisingly, given the relatively brief history of the industry, there is a dearth of information available on its various players. Further obscuring the situation is the fact there are typically confidentiality agreements between funders and claimants.

Our survey findings provide new—and as-yet the only publicly available—insight into the major players in this increasingly relevant aspect of the sophisticated litigation landscape.

With our survey, we were interested in learning more about “commercial” litigation finance, as opposed to the “consumer” version of the practice. The latter is predominately concerned with plaintiff personal injury claims, while the former finance the lawsuits (and sometimes more) of entities ranging from under-resourced startups to Fortune 100 corporations looking to manage risk and legal spend.

Another important differentiator is the value proposition of commercial litigation finance, which, unlike its consumer analogue, can include consultative services and subject-matter expertise concerning the claims at issue.

Who’s on the list
We had 255 responses to our litigation finance firm survey, conducted between July and September of this year. In creating our survey, there were seven significant litigation finance firms identified. In alphabetical order:

· Bentham US
· Burford Capital
· Gerchen Keller
· Juridica Investments
· Lake Whillans
· Longford Capital Management
· Parabellum Investments

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Digging deeper
“Would you choose to partner with this litigation finance firm again in the future?” When we posed this, perhaps the most crucial question from a client perspective, to respondents who had firsthand experience working with the firms in question, the responses grouped the firms into three distinct tiers:

Tier 1:
Gerchen Keller
Lake Whillans

These two enjoyed an approximately 80% level of “Yes, definitely” responses to the question whether clients would be repeat customers.

Tier 2:
Parabellum Investments
Bentham US

65-70% of respondents who have worked with these two would do so again, unreservedly.

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Tier 3:
Burford Capital
Juridica Investments

Only 20% of experienced respondents would definitely engage Burford again; the large majority (65%) chose “Possibly, with some reservation.” Juridica’s numbers were 15% and 42% respectively.

[NOTE: There were too few respondents with firsthand experience of Longford for us to share any meaningful findings.]

Client satisfaction
Additionally, we asked this same group of experienced respondents to rate their satisfaction with the particular firms on a scale from 1 (“Very Dissatisfied”) to 10 (“Very Satisified”).

Interestingly, even the firms that fared less well on the binary “Would you partner again?” question received decent mean ratings on the satisfaction question:

Firm Mean
Gerchen Keller 8.66
Lake Whillans 8.55
Bentham US 8.26
Parabellum Capital 8.18
Burford Capital 7.65
Juridica Investments 7.05

Testimonials
Finally, important context is provided by the comments respondents shared with us. With a few exceptions, those who gave us qualitative feedback were quite positive. Here are some representative examples:

· Bentham US

Our experience with Bentham has been first-rate. From calling them just to bounce an idea off of them, through the diligence process for a prospective matter for funding consideration, Bentham is head and shoulders above the rest.

· Burford Capital

An established player.

· Gerchen Keller

Gerchen Keller is a top-notch professional organization with a strong commitment to its cases both in terms of depth of understanding and responsiveness. In particular, as a funder, it has an exceptional knowledge of patent-related litigation. They are a real pleasure to work with and in my experience, an exemplar to the litigation finance industry.

· Juridica Investments

The Juridica team [is] very strong.

· Lake Whillans

Lake Whillans is headed [by] two very smart, experienced and talented fund managers with a great sense for the important details, excellent creativity and insightful analyses. They are responsive, innovative and understand this burgeoning business as well as or better than anyone else. It is always a pleasure to work with them and Lake Whillans.

· Parabellum Investments

Parabellum is fantastic, very sophisticated, experienced, solid. Best in class.

The lesson here is that—regardless of aggregate opinion—each of these firms has its enthusiastic proponents. We anticipate that the breadth and depth of the ATL audience’s experience with litigation finance firms will only continue to grow, and we look forward to tracking how these perceptions develop over time.

If you have questions or comments about this survey, or if you would be interested in having Above the Law conduct custom research on your behalf, please contact us at research@abovethelaw.com. Thanks.

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