In a recent article from the Wall Street Journal (subscription required), third party funders are rushing to hire top legal talent. Bentham IMF has hired ten new attorneys in the past two years, and “[o]ther firms have hired dozens more” from top firms like Arnold & Porter, Latham & Watkins LLP, Proskauer Rose LLP, and Wachtell, Lipton, Rosen & Katz. Principals at TPF firms have said that their inboxes are full on unsolicited applications and there simply are not enough positions to meet the growing demand.
The Wall Street Journal reports that many of the new hires are flocking to TPF firms because they believe it is the future of litigation in America (and around the world). TPF firms also make it an attractive career-move by offering six-figure salaries, reasonable hours, and sizable bonuses if investments pan out. The funders themselves are quite happy with the new attention because the TPF firms need to keep pace with the influx of money and business the industry has seen over the past few years.
According to the Wall Street Journal, Bentham currently has $136.6 million committed to US cases. Longford Capital Management LP, which has raised $556.5 million since its 2011 founding, currently has $330.3 million committed in 38 investments, including portfolios with multiple lawsuits (for more information about portfolio funding, read our blog post – here). And those are only a few of the current market leaders; new ventures like Validity FInance are popping up around the globe with hundreds of millions of dollars worth of capital to invest in promising litigations and arbitrations. All these firms need legal analysts to determine the validity of each claim, and how a litigation or arbitration will likely unfold.
For those working in the industry for a while, this is a noticeable a noticeable shift of the stigma that used to be associated with litigation finance.
When Marla Decker first started working at Lake Whillans Litigation Finance in 2015, “I noticed, especially with lawyers, an eyebrow raise” when talking about the industry, she said. The former Cleary Gottlieb Steen & Hamilton LLP lawyer said she detected a shift last year, where now people say, “this is something I need to know about.”
The rise of third party funding and its growing popularity among legal practitioners is a sign that the TPF industry is gaining momentum and legitimacy.