The pandemic is far from over, but the steps that legal firms are taking to mitigate it have only just begun. Third-party funders are already seeing shifts in the way firms are approaching them. It’s not surprising that law firms will be creative and proactive in heading off financial woes before they occur—but it is startling how quickly things are changing.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
The pandemic is far from over, but the steps that legal firms are taking to mitigate it have only just begun. Third-party funders are already seeing shifts in the way firms are approaching them. It’s not surprising that law firms will be creative and proactive in heading off financial woes before they occur—but it is startling how quickly things are changing.
Eric Blinderman, CEO (U.S.) of Therium Capital Management, writes on Therium’s blog that his firm is already seeing a major upswing in funding requests for single cases. This seems to indicate that some firms are already strapped for liquidity, or that savvy managers are trying to get ahead of the coming money crunch by reducing risks and freeing up funds for other activities.
Perhaps the most striking aspect of this, is the fast formation of special practice groups specifically for COVID-19-related cases. These are likely to include securities litigation, breach of contract, insurance recovery, and more. Such groups are already overwhelmed with claims relating to business closures, supply chain issues, and a deluge of other losses.
One could argue that COVID-19 has given us a new legal specialty—pandemic management. This unique situation we all find ourselves in is leading to a flurry of change in legal circles that’s bound to permanently impact law in general and litigation funding in particular. It’s fortuitous that lit fin has become so accessible in times when low-income litigants would otherwise have no affordable legal recourse.
