More often than not, corporate legal departments have their own preferred provider network of law firm partners. Periodically, these networks are reevaluated and updated to streamline strategy or control costs. These occasional reviews have become more frequent, and requests for proposals (RFPs) are up 25% from where they were in 2017. As restructuring and budget shortfalls are becoming increasingly common thanks to COVID, these panel reviews are likely to continue.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
More often than not, corporate legal departments have their own preferred provider network of law firm partners. Periodically, these networks are reevaluated and updated to streamline strategy or control costs. These occasional reviews have become more frequent, and requests for proposals (RFPs) are up 25% from where they were in 2017. As restructuring and budget shortfalls are becoming increasingly common thanks to COVID, these panel reviews are likely to continue.
Burford Capital explains that while corporate legal departments are retooling and adapting, partnering with a legal finance company may make a lot of sense. Risk-sharing, for example, by entering a portfolio funding arrangement—can help buttress otherwise stressed balance sheets.
In-house lawyers often say that they’ve chosen not to pursue valid, promising legal claims due to cost. By leveraging legal finance, firms in that situation could simply use non-recourse funding to increase liquidity at the same time they lower their own risk.
Legal finance may help achieve many of the goals GCs pursue, as they review their legal networks. The expertise of established litigation funders is a boon to any legal team. Their experience is more likely to lie in vetting cases, possibly filling a knowledge gap within the existing team.
Legal finance makes budgeting easier by increasing the certainty of incoming funds. Funders can be utilized not just for the funds themselves, but for strategic purposes as well. In addition to expertise and a winning track record, funders should be well-financed and open to transparency. Scale is also important, so it’s vital to choose a funder that can meet your legal finance needs.
Establishing and evaluating legal partner relationships should be a regular occurrence for GCs. The time to reevaluate isn’t after a meritorious case emerges. The key is to be ready to strike when the opportunity presents itself.
