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A Framework for Measuring Tech ROI in Litigation Finance

November 24, 2025

A Framework for Measuring Tech ROI in Litigation Finance

This article was contributed by Ankita Mehta, Founder, Lexity.ai – a platform that helps litigation funds automate deal execution and prove ROI.

How do litigation funders truly quantify the return on investment from adopting new technologies? It’s the defining question for any CEO, CTO or internal champion. The potential is compelling: for context, according to litigation funders using Lexity’s AI-powered workflows, ROI figures of up to 285% have been reported.

The challenge is that the cost of doing nothing is invisible. Manual processes, analyst burnout, and missed deals rarely appear on a balance sheet — but they quietly erode yield every quarter.

You can’t manage what you can’t measure. This article introduces a pragmatic framework for quantifying the true value of adopting technology solutions, replacing ‘low-value’ manual tasks and processes with AI and freeing up human capital to focus on ‘high-value’ activities that drive bottom line results  .

A Pragmatic Framework for Measuring AI ROI

A proper ROI calculation goes beyond simple time savings. It captures two distinct categories:

  1. Direct Cost Savings – what you save
  2. Increased Value Generation – what you gain

The ‘Cost’ Side (What You Save)

This is the most straightforward calculation, focused on eliminating “grunt work” and mitigating errors.

Metric 1: Direct Time Savings — Eliminating Manual Bottlenecks 

Start by auditing a single, high-cost bottleneck. For many funds, this is the Preliminary Case Assessment, a process that often takes two to three days of an expert analyst’s time.

The calculation here is straightforward. By multiplying the hours saved per case by the analyst’s blended cost and the number of cases reviewed, a fund can reveal a significant hard-dollar saving each month.

Consider a fund reviewing 20 cases per month. If a 2-day manual assessment can be cut to 4 hours using an AI-powered workflow, the fund reallocates hundreds of analyst-hours every month. That time is now moved from low-value data entry to high-value judgment and risk analysis.

Metric 2: Cost of Inconsistent Risk — Reducing Subjectivity 

This metric is more complex but just as critical. How much time is spent fixing inconsistent or error-prone reviews? More importantly, what is the financial impact of a bad deal slipping through screening, or a good deal being rejected because of a rushed, subjective review?

Lexity’s workflows standardise evaluation criteria and accelerate document/data extraction, converting subjective evaluations into consistent, auditable outputs. This reduces rework costs and helps mitigate hidden costs of human error in portfolio selection.

The ‘Benefit’ Side (What You Gain)

This is where the true strategic upside lies. It’s not just about saving time—it’s about reinvesting that time into higher-value activities that grow the fund.

Metric 3: Increased Deal Capacity — Scaling Without Headcount Growth

What if your team could analyze more deals with the same staff? Time saved from automation becomes time reallocated to new higher value opportunities, dramatically increasing the value of human contributions.

One of the funds working with Lexity have reported a 2x to 3x increase in deal review capacity without a corresponding increase in overhead. 

Metric 4: Cost of Capital Drag — Reducing Duration Risk 

Every month a case extends beyond its expected closing, that capital is locked up. It is “dead” capital that could have been redeployed into new, IRR-generating opportunities.

By reducing evaluation bottlenecks and creating more accurate baseline timelines from inception, a disciplined workflow accelerates the entire pipeline. 

This figure can be quantified by considering the amount of capital locked up, the fund’s cost of capital, and the length of the delay. This conceptual model turns a vague risk (“duration risk”) into a hard number that a fund can actively manage and reduce.

An ROI Model Is Useless Without Adoption

Even the most elegant ROI model is meaningless if the team won’t use the solution. This is how expensive technology becomes “shelf-ware.”

Successful adoption is not about the technology; it’s about the process. It starts by:

  1. Establish Clear Goals and Identify Key Stakeholders: Set measurable goals and a baseline. Identify stakeholders, especially the teams performing the manual tasks- they will be the first to validate efficiency gains.
  2. Targeting “Grunt Work,” Not “Judgment”: Ask “What repetitive task steals time from real analysis?” The goal is to augment your experts, not replace them.
  3. Starting with One Problem: Don’t try to “implement AI.” Solve one high-value bottleneck, like Preliminary Case Assessment. Prove the value, then expand. 
  4. Focusing on Process Fit: The right technology enhances your workflow; it doesn’t complicate it.

Conclusion: From Calculation to Confidence

A high ROI isn’t a vague projection; it’s what happens when a disciplined process meets intelligent automation.

By starting to measure what truly matters—reallocated hours, deal capacity, and capital drag—fund managers can turn ROI from a spreadsheet abstraction into a tangible, strategic advantage.

By Ankita Mehta Founder, Lexity.ai — a platform that helps litigation funds automate deal execution and prove ROI.

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Malaysia’s New Arbitration Funding Rules Follow Collapse of Therium-Backed Sulu Claim

Two Malaysian jurists have published a retrospective on the Sulu arbitration, drawing a direct line from the failure of the funded US$15 billion claim against Malaysia to the statutory framework the country has since built around third-party funding of arbitration.

As reported by The Edge Malaysia, the piece is written by Tan Sri Zainun Ali, a former Federal Court judge, and barrister J J Chan. They note that the claim brought by parties describing themselves as heirs of the Sultan of Sulu "was reportedly backed by third-party litigation funding, attributed in public reports to Therium Capital Management," on the usual basis that the funder would take a return if the claim succeeded.

It did not. The Paris Court of Appeal annulled the award in full on 9 December 2025, holding that no valid arbitration agreement capable of binding Malaysia existed. The claimants were ordered to pay Malaysia €200,000 in costs, and separately lost costs orders in proceedings before the Netherlands Supreme Court.

The legislative response is the part with the longest reach. Malaysia's Arbitration (Amendment) Act 2024 took effect on 1 January 2026 and, in the authors' description, "brings third-party funding of arbitration within a clear statutory framework," requiring disclosure of both the funding arrangement and the identity of the funder.

For funders, the sequence is instructive: a single high-profile enforcement campaign against a sovereign produced a disclosure regime that will now apply to every funded arbitration seated in the jurisdiction.

Commercial

New York Poll Finds Nearly 80% of Voters Would End Third-Party Litigation Funding

A statewide survey of likely New York voters has found that close to four in five would do away with third-party litigation funding altogether, placing the practice among the least popular items in a broad tort reform poll.

According to the Empire Center for Public Policy, which commissioned the survey from Cygnal and published the results on 2 September, 79.7% said they support ending the arrangement under which outside investors finance lawsuits in return for a share of any recovery.

Litigation funding did not stand alone. The poll found 94.5% supporting prosecution of staged-accident fraud, 83.4% favouring limits on pain-and-suffering awards, 79.7% backing changes to workplace-injury liability rules, 77% supporting reforms aimed at frivolous lawsuits, and 66.6% in favour of amending the Scaffold Law, New York's absolute-liability statute for elevation-related construction injuries.

The clustering matters as much as the individual figures. Funding is being tested here alongside fraud and damages caps rather than as a discrete question about access to capital, and the framing offered to respondents describes investors financing lawsuits for a portion of the proceeds without reference to claimants who could not otherwise bring a case.

New York enacted consumer legal funding protections earlier this year, and the state has no disclosure statute covering commercial funding. Polling of this kind is likely to be cited in Albany as the next session approaches, and funders should expect the 79.7% figure to travel well beyond the survey it came from.

Commercial

DIFC Court Orders Defendant to Reveal Who Is Funding His Legal Team in $456M TrueUSD Case

A Dubai court has given a defendant in a $456 million stablecoin dispute until 7 September to swear an affidavit identifying who has been paying his lawyers, in an unusually direct judicial demand for the source of a litigant's legal funding.

As reported by CryptoSlate, the Dubai International Financial Centre Courts made the order in *Techteryx Ltd v Aria Commodities DMCC and others*, the proceedings over $456 million transferred out of the reserves backing the TrueUSD token. Matthew William Brittain, one of the respondents, must disclose by 4pm Gulf Standard Time.

The order is specific about what is wanted. Brittain must give the amounts, dates and bank accounts behind fees paid to Quinn Emanuel, Horizons, Gall, Campbells and FTI Consulting, identify the original sources and ultimate beneficial owners of those funds, explain how the accounts were funded and produce supporting documents. It singles out $1,083,912.49 paid by Aria Bio Industries FZE on 31 October 2025.

Compliance is required "to the best of his ability," and the court indicated that further adjournments would need "the most extreme circumstances" backed by strong evidence. Sanctions are not automatic; Techteryx would have to apply. A committal hearing with a four-day estimate is listed for 26 October.

Most disclosure fights concern claimant-side funding. This one runs the other way, and shows a court treating the defence's funding chain as a matter it is entitled to see.