As we all know, litigation is expensive—and it can cost more than money. The strain on cash flow can limit your options, reduce the amount of new business you take on and—most importantly—impact strategy on your current cases.

To help your practice stay nimble, Steno has released The Modern Guide to Litigation Financing, a primer that shows how the emerging field of litigation financing can provide resources to law firms of all sizes. The addition of funding can help you increase options, develop new business, mitigate risk and fight harder for clients.

“The size of your wallet shouldn’t determine your legal strategy—or the outcome of your case,” said Dylan Ruga, co-founder, president and chief legal officer at Steno. “It should not limit your business, either.”  

An Emerging Industry

An entire industry dedicated to litigation financing has evolved in recent years to help attorneys access capital. It is already a multi-billion dollar business, with the average deal topping $8.5 million. Innovative companies are also offering smaller investments to smaller law firms, some as low as $10,000.

Litigation funders, which include banks, investors and financial services firms, provide monetary assistance for cases in exchange for a share of the potential recoveries. Funding is often provided as a “non-recourse” investment, meaning no payment is required unless the case is resolved favorably.

While regulations are still being written in many states, the entire industry is leaning toward treating investors as passive participants, with no control over case strategy or the attorney-client relationship.

For many firms, litigation financing can be a game changer, an option that every attorney, and particularly members of the plaintiff’s bar, should investigate and understand.

“Companies in many industries rely on lines of credit to conduct their business,” Ruga said. “Litigation financing takes that time-tested idea and adapts it in a way that is helpful to law firms, so a tool that is common in the business world is now becoming common in the legal world.” 

A Comprehensive Primer

The Modern Guide to Litigation Financing  explains how the industry works in detail so that your firm can understand the process and make decisions. Among the topics it covers are:

• The Potential. What litigation financing can provide for your practice, including new micro-financing options available for plaintiffs’ attorneys and other types of funding.
• The Process. How the financing process works, including how to select a case, apply for financing, facilitate the due diligence process and sign an agreement.
• The Landscape. Which states offer “non-recourse” investment (there are 35) and which do not.
• The Future. What’s coming in the year ahead as litigation financing continues to evolve, from emerging players to the regulatory regime.

“Litigation financing is gaining momentum,” Ruga said. “While the market will continue to evolve, the concept makes sense. It gives law firms additional resources to fight for their clients.” 

To learn more about what litigation financing can do for your firm, download a copy of The Modern Guide to Litigation Financing.