Omni Bridgeway is pleased to announce expansion and key promotions within its U.S. team, which has grown by over 100% in the past 12 months.  In New York, Sarah Tsou has been appointed Senior Investment Manager and assumes the role of Portfolio Manager - Global Intellectual Property overseeing Omni Bridgeway’s widely recognized IP business and team of dedicated IP professionals. This portfolio role underscores Omni Bridgeway’s unique global IP capabilities and worldwide footprint spanning key IP markets. Fiona Chaney, who heads the company’s Los Angeles office, was also recently appointed to Senior Investment Manager and Legal Counsel. Fiona also serves as co-lead of the company’s insurance initiatives. We also congratulate Chris Citro (New York), who has been promoted to Investment Manager and Legal Counsel, with a focus on patents and other intellectual property matters. Further building out the company’s dynamic IP team is Phillip Goter who recently joined as Investment Manager and Legal Counsel. Phil’s arrival marks Omni Bridgeway’s continued expansion on-the-ground including new operations in the Midwest. Based in Minneapolis, Phil joins from Fish & Richardson with over a decade of experience representing plaintiffs and defendants in high-stakes disputes involving patents, trademarks, copyrights, trade secrets, antitrust and competition law, and FDA clearance. Phil is an Adjunct Professor at the University of Minnesota Law School and a member of the Expert Network for Lunar Startups, an incubator specializing in growth and innovation for diverse, high-potential entrepreneurs. In Washington D.C. we welcome Matt Leland as Investment Manager and Legal Counsel. Matt joins us from King & Spalding LLP where he was a commercial litigation partner and successfully litigated diverse legal issues for corporate plaintiffs and defendants in the energy, manufacturing, healthcare, pharmaceutical, and construction industries. Matt helped clients recover substantial damages in many of his cases, which often involved contract and commercial disputes, government reimbursement claims, unfair business practices, civil RICO, protection of trade secrets, and trademark infringement. Prior to this, Matt was a partner at McDermott Will & Emery LLP. On the business side, we welcome Joseph Cho as Corporate Counsel based in New York. Joe joins us from Weil, Gotshal & Manges LLP where he represented public and private companies in complex mergers and acquisitions. His previous experience includes private practice at Cahill Gordon & Reindel LLP and Wilson Sonsini Goodrich & Rosati PC. The U.S. team has also grown its slate of associate investment managers, legal counsel, and business support, doubling Omni Bridgeway’s U.S. headcount to over 45 in the past year.  Andrew Saker, Omni Bridgeway’s Managing Director & CEO and Chief Strategy Officer – US notes, “We are delighted to welcome Phil, Matt and Joe, and congratulate our investment team colleagues in their promotions. We are committed to attracting and retaining the top talent in the U.S. market who bring a unique combination of legal expertise and financial innovation, to result in the best outcomes for clients. Our model is more than financial – we are skills, plus capital. Companies and law firms in the U.S. are responding to our offering, and this is reflected in our continued growth.”

In the final panel of the conference, Michael Kelley, Partner at Parker Poe, moderated a discussion on lessons that can be learned from past deal issues. Panelists included Chip Hodgkins, Managing Director of Statera Capital, Tracey Thomas, CEO of IP Zone, and Erika Levin, Partner at Fox Rothschild. This panel highlighted several stressors and break points that occur in funding relationships and transactions. One issue that often comes up is that communication problems arise. For example, there can be reporting requirements that firms forget to bring up at the start of a relationship. It's often difficult to communicate all of the various burdensome filing requirements. Another issue that can arise is economic inefficiency. Sometimes an inversion occurs, where a lack of attention to the budget arises, or a secondary counsel comes in and there's an issue there. These things can cause obvious problems, given that lawyers just aren't that great at budgeting, according to the panel's perspective. The panel recommends transparency, and addressing issues instead of burying them, which is often the temptation. For example, on budgetary issues, often counter-parties might not even be aware of where they are in the budget, so a lot of times avoiding problems just comes down to sharing information before a dislocation occurs. Another interesting point: sometimes the relationship between law firm and funder becomes too cozy, and it's no longer aligned with the client's best interests. Tracey Thomas of IP Zone pointed out that in such situations, they've had to terminate the relationship, and they've found that termination is in their best interests in such circumstances. On case management, sometimes funders can try to take control of the budgetary decisions of the case. One example that was brought up was when a funder told a client to 'shut up and dribble,' and follow their lawyer's advice on where to spend money. While that may have been in the best short-term interests of the case, it fractured the relationship. Not to mention the fact that it was borderline unethical. At the end of the day, the relationship between a lawyer and client should be sacrosanct. Once funding enters the relationship, things can get murky, and this can present ethical considerations that are very problematic. So this will be an ongoing source of contention as the litigation funding industry continues to mature.

This Day 2 panel featured Alex Chucri, CEO and Founder of Pravati Capital, Vincent Montalto, Partner at DLA Piper, and Ronald Schutz, Partner at Robins Kaplan. The panel was moderated by Kathryn Boyd, Partner at Hecht Partners. Discussion topics ranged from operationalizing firm decisions involving funding, to the best ways to structure a funding partnership or alliance. Not everyone knows about the various structures of relationships between law firms and funders, so the panel addressed the various models in play, including those that involve some form of recourse funding. Pravati has a debt structure in play, which founder Alex Chucri thinks makes the most sense for his firm's structure. He believes in recourse to the firm, to the management team, and personal guarantees. This makes investors more comfortable, knowing that Pravati has skin in the game. Panelists also discussed having to monitor the capital structures, and being cautious about capital allocation. A lot of funders raise $100MM and need to put that capital to work, and so they finance claims the wouldn't otherwise take on. This is concerning. "When you put capital into a deal, it changes the whole landscape of a deal," according to Vincent Montalto. His firm has implemented internal structures to monitor capital expenditure and management. The panel also delved into some of the risks of partnering with funders, including whether funders will withdraw their funding - how and why would they do this? Where is funder money coming from - there are all types of investment structures out there, law firms have to be aware of those, so they can better understand the risk to the funder, which presents a downstream risk to them. These are things that the average lawyer in a law firm doesn't appreciate, but it's very important to know if the funder  has the capital on hand, is it subject to capital calls, etc. One final point on the tax implications of recourse funding: recourse funding can be clawed back, and so its treated as a loan and so it's not taxed. Recently there was a legal standing that if the funding structure is non-recourse, that is treated as income, which means it is taxes. Often, there are a lot of emotions about getting a deal done, so they overlook the tax implications, and there is a real danger there.

Day 2 of the LF Dealmakers conference kicked off with Roy Strom, a reporter at Bloomberg Law, interviewing Adam Gerchen, CEO of Gerchen Keller Partners and Keller Postman LLP. Adam Gerchen spoke on a variety of issues.  A few takeaways below: On the growth of claims sizes: Prominent case examples like the 3M class action, which several years ago would have been 50,000 claimants, and today is above 250,000 illustrate the sector's evolution. That is due to advancements in digital marketing, and technology enabling the intake and management of all of those claimants. So the industry is ballooning in ways that are rather unique. On fundraising: Within a portfolio, the lack of co-variance is actually similar to reinsurance. So there are all sorts of powerful things you can do from a portfolio construction perspective. LPs already have so much exposure to litigation funding and they don't even know it. It's much less of a unique thing than they previously believed. On the interesting macro-environment right now:  If I were on the allocation side right now, this is a space I would definitively find attractive. The thing LPs may not know is, where you are in the lifecycle of these claims is very interesting. Look at mass torts - you have torts that have been around for several years, that are not being priced correctly. On what he is most excited about: Insurance wrappers that can wrap an entire fund - "I can't believe it." In the spectrum of things Gerchen would do, an IP appellate risk doesn't seem the most attractive, but that is where folks seem to be most engaged. He thinks in the short-term this is extremely interesting, but then again, insurers have a much lower cost of capital than funders, so that could compress pricing downstream, which could cause issues. But overall, these are very exciting times.