Litigation Finance

3 Questions For A Litigator Turned Litigation Funding Executive (Part I)

A little information on what it's like to transition from Biglaw leadership to the world of litigation finance.

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Back in April 2019, prominent litigation funder Longford Capital announced that it was opening a Dallas office, giving the company a foothold in the growing Texas legal market as it looked to deploy the remaining capital from its $500 million Fund II. To helm the new office, Longford brought in a leading local litigator, the then-managing partner of the Dallas office of K&L Gates, John Garda. After recently seeing that John (as well as a number of his Longford colleagues) had been recognized as one of the 2020 Lawdragon Global 100 Leaders in Legal Finance, I reached out, hoping to hear from John about his personal transition from Biglaw practice to running an office for a litigation funder. He graciously agreed to share his experience.

By way of background, John is responsible for managing Longford Capital’s Dallas office, investment sourcing, underwriting, and monitoring investments. John has more than 25 years of litigation experience, which includes representing clients in business disputes; complex commercial litigation; securities litigation; professional liability relating to accountants, lawyers, investment bankers, officers, and directors; and disputes involving healthcare contracts, real estate, and construction. John has appeared before state and federal trial and appellate courts, arbitration associations, and administrative boards around the nation. John also served as legal advisor to several corporate boards of directors and board committees, counseling directors on how to manage the critical issues related to their fiduciary responsibilities. John also represented clients, including independent audit committees, in corporate governance matters, SEC investigations, and internal investigations.

Prior to joining Longford Capital, John was the managing partner of the Dallas office of K&L Gates LLP, a Global 20 law firm, where he served on the firm’s management committee and advisory council. Following graduation from law school, John clerked for the Honorable Jorge A. Solis of the U.S. District Court in the Northern District of Texas. Prior to pursuing a law career, John practiced as a certified public accountant for the accounting firm now known as Ernst & Young. John earned a bachelor’s degree from the University of Delaware in accounting and a law degree from the University of Notre Dame Law School.

As seen below, and in next week’s installment, John is an enthusiastic proponent of the benefits of litigation finance for the legal industry and clients. His insights into the process that litigation funders use to diligence cases will be helpful to anyone looking to maximize their chances of success in terms of attracting litigation funding for meritorious claims.

As usual, I have added some brief commentary to John’s answer below but have otherwise presented his answer to my first question as he provided it.

Gaston Kroub: What excited you about transitioning from a Biglaw leadership position to opening an office for a leading litigation funder?

John Garda: I was so excited to be given the opportunity to open up a Dallas office and join a true pioneer and market leader in the litigation finance industry when the time was right. I first became excited about litigation funding when Longford Capital engaged my law firm — K&L Gates — to perform due diligence involved with some of its potential investments.  Longford Capital’s two-stage due diligence process is unique and effective — if we are interested in funding a case after we perform our due diligence on the opportunity, then we hire a law firm to perform an independent case assessment as part of the second phase of the due diligence process. I was able to manage several case assessment projects on behalf of Longford Capital as part of performing that due diligence. So, I have been personally involved and interested in litigation funding since Longford Capital began funding cases in 2013.

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Longford Capital has experienced rapid growth since it began funding in 2013. In 2017, Longford Capital launched its second fund dedicated to litigation finance for $500 million, which was the single largest litigation finance fund created in North America. This rapid growth continues today, and the company currently has over $1 billion in assets under management.

In 2019, Longford Capital was looking to capitalize on this growth, expand its geographic reach, and open up a Dallas office. At that time, I had been managing the Dallas office of K&L Gates for the past several years and had developed a very close relationship with the management team at Longford Capital, which I personally believed was the best management team in the industry. Having worked as a CPA for a Big 4 accounting firm, a trial lawyer focused on complex commercial disputes, and a managing partner at K&L Gates, I was particularly excited to combine these experiences and jump at the opportunity that Longford Capital presented to me.

GK: John’s path to his current position at a litigation funder is an interesting one and evidences a long relationship with Longford going back to his Biglaw days. His description of how seriously Longford approaches due diligence of potential investments is consistent with my personal experience working with funders, either as potential outside counsel for a client, or as outside counsel helping the funder diligence a potential investment in a patent enforcement campaign or case. While different funders approach diligence efforts differently, there is obvious merit to Longford’s combination of internal and outside resources for the foundational effort at the base of any successful funding effort. I am sure that Longford’s comprehensive approach to diligence helps the company on at least two fronts: 1) giving investors comfort that their capital will be deployed well, and 2) assuring potential funding targets that their proposed projects will get careful attention. Put another way, for a litigation funder diligence approaches can be a competitive advantage, a fact that Longford clearly recognizes.

Next week, we will conclude our interview with John, focusing on how lawyers and their clients can best position themselves for successful dealings with litigation funders.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

 

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