When you need financing for plaintiff litigation, you want to make sure you choose the best financial product and lender that aligns with your firm’s goals. Litigation funding is becoming an increasingly popular option, but not all lenders are created equal.
If your firm requires or might benefit from litigation finance, you need to go through the proper due diligence and understand the terms of the lending product, what implications it has on your firm’s P&L and a myriad of other factors . As you know, legal disputes can last for several years. So the funding relationship will be similarly long-term and you should have measures in place to manage that relationship.
To help you narrow down the list of litigation funding companies and find a solution that works for you and your client, we’ve provided the list below. We believe these companies to be among the best available to you. Take a look at each listing and let Case Works know how we can support your goals at this time.
Why Your Firm Should Consider a Litigation Funding Company
As a longtime litigator, it’s likely that this is not the first time you have faced a tough business or legal decision. Should you take on a case that is outside of your financial wheelhouse or let it fall into the hands of a firm with more capital?
With litigation funding, you can take on those big cases that are expensive upfront, but ultimately worth the resources they require. Oftentimes, the loans only require repayment if and when you settle the case. This makes litigation funding a low-risk but high-reward strategy.
Any one of the companies on this list can offer you an advance on the costs and fees of your case. Once your client has obtained a settlement or won the case, you’ll pay back the advance (plus fees).
Consider One of These Top Litigation Funding Companies
There are many litigation funding companies to choose from and as we mentioned, the choice is an important one. While we have provided a brief overview of each, we recommend that you do a deep dive into the companies on this list. Doing so will help you find the best fit for your firm, your client, and the case at hand.
Kerberos Capital Management
Criteria
Kerberos Capital Management defines itself as a “boutique” alternative asset manager. But its recent success in raising $500 million for its third fund suggest that “powerhouse” may be the more appropriate term.
Kerberos specializes in providing capital solutions to law firms, and has earned its reputation as a trusted partner with deep expertise in litigation finance and creative structuring. If you have built your firm upon a success-fee model, you will find the financial support you need to build and win your case at Kerberos Capital Management.
Still need some convincing? These accreditations speak for themselves:
- Named one of the Top 3 Global Newcomers by Private Debt Investor
- Considered as a finalist for the 2021 Industry Innovation Awards by Chief Investment Officer magazine
Kerberos is located in Chicago, IL. But as a global asset manager, they fund cases all over the world.
Contingency Capital
Founded in November 2020 and located in New York, Contingency Capital is another top contender on our list. Upon their launch, Tetragon Financial Group committed $50 million to the company’s investment fund, with options to further invest.
At the time, Contingency Capital claimed that it sought to provide access to high-quality assets for litigators. Specifically, their goal was to target clients driven by regulatory, tax, or legal processes. Thus far, they seem to be reaching said goals.
Furthermore, Fortress Investment Group entered into a co-investing arrangement with Contingency at the time. Reports indicate that Fortress planned to invest up to $500 million with Contingency Capital.
In other words, this company is backed by big money. If you want a funder with some serious capital, this would be the one.
American Law Firm Capital
This funding company works exclusively with U.S. and EU plaintiff trial lawyers., they primarily fund law firms involved in personal injury, class actions, and mass torts.
Together, the team at American Law Firm Capital has over 50 years of experience. In other words, they are considered leading experts in orchestrating legal asset lending and underwriting of this unique asset class. Their loan sizes available range from $1MM to $100MM or more per each firm funded.
Their model has over 20 years of proven success. Their capital partners include banks, private equity and hedge funds. As a result of their many capital partner options and unique hybrid model, American Law Firm Capital is a great alternative to traditional banking loans as they base their funding decisions on anticipated future legal fees and costs. They also often allow deferment of monthly interest payments until you reach a settlement.
If you are interested in American Law Firm Capital processing a loan for your firm, you may reach them at 1-928- CAPITAL or www.alfcapital.com
- Apply for funding by providing basic (but high-level) information about the firm collateral (your cases) financials and your loan needs.
- American Law Firm Capital then performs initial due diligence in preparation of a term sheet
- Upon signing a term sheet more granular due diligence is performed to validate initial firm disclosures.
- Upon completion of successful a underwriting, loan documents are then prepared for all parties approval and to fund
- Your firm is funded with periodic future reporting, payments submitted as cases settle.
The typical timeline to fund is 30 days for loans under $10MM and 45-60 days for loans over $10MM
Benefit Street Partners
Benefit Street Partners (“BSP”) is an alternatives credit manager with $39 billion in assets under management as of January 31, 2022. BSP offers a broad spectrum of investment capabilities to its investors through corporate performing and distressed private credit, structured credit and commercial real estate. BSP has an established team of 115 investment professionals and 225 total employees throughout seven offices in the United States. It is also a wholly owned subsidiary of Franklin Templeton, a $1.5 trillion asset manager.
The firm prides itself on the ability to help partners develop creative solutions to their financing needs while establishing deep relationships. It also has long-term locked-up capital that allows it to be more flexible than other capital providers. We highly recommend that you reach out to BSP to explore if they can be a potential fit for your firm.
Calumet Capital
Calumet Capital is a growing nationwide provider of legal lending solutions for contingent-fee law firms and legal service providers. What’s more, they offer consultative support to the firms they work with — even going so far as to drive growth and improve operations.
Over the years, Calumet has earned its reputation and experience by deploying more than $1.2 billion of private funding to law firms. Whether your firm needs a loan of $5 million or $100+ million, Calumet has the resources to support you.
Because they are in the business of mutual success and want your firm to reach favorable outcomes, they cover ongoing services and support to get you there. Calumet has worked with countless law firms like yours and can advise you on how best to face your challenges. This is the kind of expertise that sets Calumet Capital apart from other lenders in the space.
When you turn to Calumet, you may select from their list of three investment products. These are:
- Term loans that are backed by existing case inventory. You may use these loans to support operational expenses, growth-oriented marketing efforts, client advances, and more.
- Case cost financing platforms that track the expenses of individual cases. If needed, Calumet can even charge interest to specific client accounts.
- Transition planning- Calumet Capital provides the capital and expertise necessary for law firm founders and principals to transfer all or part of their interest to junior partners, next generation family members, or outside parties.
If you are interested in one or more of these investment products, get in touch with Calumet Capital.
Virage
Virage has been in the litigation funding business since 2013. In that time, they’ve helped litigation lawyers and law firms of all shapes and sizes. Unlike other lenders on this list, they fund not only contingency-based cases but also those that are hourly billable or a combination of the two.
Among the case types they support are the following:
- Employment law
- Environmental law
- Intellectual property law
- Business litigation
- Single-event torts
- Mass torts
- Mass actions
- Class actions
When you receive funding from Virage, you may use it on growth, overhead costs, case expenses, and marketing. Virage has designed its services to keep you operational, efficient, and on the path to further growth.
What’s more, Virage is willing to get creative with its lending services. In the past, they have helped borrowers network, develop their cases, and expand their understanding of funding opportunities. In short, they want your firm to succeed and are ready and willing to make it happen.
Although Virage is located in Houston, TX, they fund lawyers and firms across the United States. They understand your business better than a traditional lender or bank will, so give them a call to learn more about your options.
Parabellum Capital
Criteria
Are you sitting on a business dispute claim that is worth $10 million or more in alleged damages? Bring it to Parabellum Capital. In response, you get these outstanding benefits:
- A true partnership in which your funder wants to see you succeed
- More than a decade of experience on your side
- Help from a team of investment bankers, legal pros, and financial juggernauts
- Relationships with a network of litigation practices across the country
- Access to hundreds of millions of dollars in funding capital
Parabellum is proud to say that they can finance and support you through any case, no matter the size. They want to help you win and have the resources to do so.
Frequently Asked Questions about Litigation Funding
Litigation funding is still a relatively new concept. As such, you may be unfamiliar with the concept and how it works. To help you better understand how litigation funding will work for you, your client, and your case, we’ve provided some FAQs and answers. As always, turn to Case Works if you still have lingering questions.
Is litigation funding only for plaintiffs?
Originally, litigation funding was designed to help a plaintiff pursue their case. More recently, the scope of this type of funding has begun to expand.
It is not always possible to secure litigation funding for a defendant, but it has been known to happen. In this situation, the advance is made with a negotiated fee depending on the case’s outcome.
Can litigation funding only be used on litigation?
This will depend upon the agreement made with the funding company. Oftentimes, you may be able to use these funds for related business costs and overhead costs as well.
Does the litigation funder assume any control over the case they have funded?
No, a litigation funding company never has the right to take control of the cases in which it invests. Instead, they provide funding so that you and your client have what you need to make the case a success.
Must I share case details with the funding company? Will doing so infringe upon the privacy rights of my client?
Client privacy is a well-respected issue in the litigation funding world. Oftentimes, both parties will sign healthy confidentiality agreements to protect any sensitive information. If you are worried about the ethics of your agreement with a funder, you should contact their team directly with your concerns.
How long will it take my firm to apply for and receive funding?
This will depend on your situation and which litigation funding company you select. Expect the process to take some time. Generally, it takes several weeks or even a few months. If timing is an issue, you should speak directly with the funder to learn more about the options available to you.
Allow Case Works to Further Support You
Of course, funding is not the only support you need when taking on a big case. You may also find yourself in need of more streamlined systems or supporting staff. Case Works is here to fill those needs and more, whenever and however you need them.
Specifically, we offer these customizable services:
- Case filing
- Creation of plaintiff forms
- Case operations management
- Client communication and management
- Client diagnostic service coordination
- Medical record review and summary
- Medical record retrieval
- New client onboarding and welcome calls
We know that you are already doing your best to support the clients you have. We want to be an extension of your team and help do some of the backoffice work. That way, you can step into the front lines and start building your successful case.
If you are looking to secure litigation financing, simply request your free consultation and make sure you partner with us to ensure your investment is well protected. You can visit our contact page to learn more.
