First day of two days 2021 LF Dealmakers Conference officially concluded. The day included an opening speech by Judge Shira A. Scheindlin, six panel discussions and a host of networking opportunities.
The initial roundtable was titled “State of the Litigation Finance Industry: Innovations and Perspectives”. The panel was moderated by Annie Pavia, senior legal analyst at Bloomberg Law, and included the following panelists:
- Brandon Baer, Founder and CIO, Pension capital
- Fred Manufacturer, Managing Partner, Maker
- Michael Nicolas, co-founder and managing director, Capital of Longford
- Andrew Woltman, Director and Co-Founder, Capital of the Statera
The discussion started with the broad trends regarding the economic downturn, which many believe will give legal services and the litigation finance industry a boost. The panelists all weighed:
Brandon Baer explained that the case pipeline has been extremely robust. There is a strong origin and a great need for capital on the part of law firms. Fred Manufacturer explained that for the law firm, it was the busiest period of his career in terms of workload. More opportunities have come to her attention in the past year and a half than ever before, with things very busy in the East and West Districts of Texas. And the quality of the opportunities is higher. New players are on the market and existing players have raised more money than ever.
Michael Nicolas added that he has seen an increase in all different sectors – law firms (both those who have used funding before and those who have never used funding before) and clients (faced with extreme demands resulting from COVID-related issues). Longford manages over $ 1 billion in assets under management, giving it great flexibility in terms of investment potential.
Andrew Woltman ended the discussion by noting how comfortable law firms and clients feel with litigation financing. Structurally, they are more proactive than ever in their dealings with fund managers.
The panel all agreed that the demand is strong across the board when it comes to types of cases. Deploying capital is not an issue here, and panelists expressed hope that this trend continues and that clients continue to recognize the value that funders bring to the table.
In terms of the current challenges facing the industry, duration and collectability are obvious issues, but these lead to some efficiency gains, such as courts learning to be more efficient in order to manage duration risk. . So there is a silver lining here.
At this point, Annie Pavia, the moderator, changed the subject and asked Michael Nicolas about Longford’s $ 50 million funding deal with Willkie Farr. Nicolas acknowledged the long-standing relationship between the two companies and how it turned into a $ 50 million funding deal. Willkie also brings a lot of business issues to the table, which helps Longford diversify away from its primary focus on intellectual property issues. Nicolas also mentioned that they made the deal public in order to be fully transparent to Willkie’s clients and let them know that Longford funding is possible for their claims.
The question of disclosure then arose. Will disclosure of the funding relationship lead to unnecessary discoveries in Willkie’s claims? Nicolas doesn’t think publicity of the relationship will hinder Willkie’s claims and that the trendline favors courts deeming the discovery irrelevant, when it comes to litigation funding (in most cases). While he understands this can spark questions, Longford isn’t particularly worried about the consequences here.
Of course, most funds still keep their partnerships private, so Longford’s decision to publicize his relationship with Willkie could perhaps be a turning point for the industry – could less opacity be around the corner? Nicolas believes we’ll see more transparency as the asset class continues to grow.
The remainder of the day was devoted to panels on a wide range of topics, including legal and regulatory challenges in the United States, and changes in law firm and contingency fee models. A discussion on “How CFOs View Legal Assets: Data and Insights from a Recent Survey,” brought together Kelly Daley, director of Burford Capital, and Bruce MacEwen, chairman of Adam Smith, Esq. MacEwen asked an interesting question about the attitude of law firms: Legal and financial services don’t usually talk to each other. So, how are the conversations with law firms going, compared to the conservations with the CFOs of companies?
Daley explained that conversations with law firms are different from those with businesses, because law firm assets are human labor, so it may be more difficult for law firms to take advantage of them. that for companies to exploit abstract assets. Law firms take their time more personally, so the conversation with law firms is more about risk transfer than cash flow. Legal finance does both, but a different value is applied to each depending on the specific assets you are enjoying.
MacEwen agreed and continued by noting that it can be difficult for clients to define the value they get from a law firm and so they are always looking for ways to get discounted rates. . Litigation funding can play a role in this regard… by alleviating client concerns about overpaying for legal services.
Overall there was a lot of covered ground on day one of the LF Dealmakers conference. And with the plethora of networking opportunities (both digital and in person), the event surely struck a chord with all attendees.
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