Explore LFJ’s Thought Leadership library and stay informed through cutting-edge insights and expert perspectives from industry leaders who are defining the legal funding landscape.

Chris Janish, CEO of Legal-Bay, has spent two decades in pre-settlement funding, guiding Legal-Bay from a pure broker model to a hybrid structure and, most recently, to a fully direct funder operating off its own balance sheet.

Below is our LFJ Conversation with Chris Janish:

You've been in pre-settlement funding for 20 years, longer than most people in this space. How has the consumer legal funding industry changed from when you started to where it is today, and what's been the biggest shift you didn't see coming?

I think the biggest change is that documents and files move so much faster now with technology. Years ago we would have to fax major legal and medical files over fax and it was just maddening. Contracts are signed via electronic services too. Technology has made it easier to be efficient and scale. I see an industry that is only in its second quarter century of life — still much growth to go. I think products will get even more creative and advantageous for both plaintiffs and lawyers to advance cases with more liquidity and flexibility. The biggest thing I see coming is major consolidation — there is tremendous capital coming into the business who love the yields and want more credit lending capacity. Larger companies who are having a hard time scaling will start to acquire or "roll up" smaller companies.

Legal Bay started as a broker, evolved into a hybrid broker/funder model, and is now moving to fund entirely on your own balance sheet. Walk us through that evolution: what drove each transition, and what does going fully direct mean for the plaintiffs you serve?

I love this question, because it really takes us into what Legal-Bay is all about. Which is we were built on customer service. I've run the entire gamut in industry. In 2006 I started as an investor looking at this model, which was similar to my experience in running a hedge fund on Wall Street with similar convertible features. Then in 2010 I came on as a marketing consultant, driving leads and developing processing for Legal-Bay to be packaged for funding evaluation. By 2011, I decided to buy the Legal-Bay assets and became an owner in a business that had no money to invest directly in cases, but I was able to forge a partnership with a Canadian bank who had more flexibility than US banks at the time. (For the early part of this business it was very hard to get institutional capital due to restrictions and general uncertainty of the collateral.) Not having the capital, the only way to retain a lead was to ensure them that we would provide them the best customer service out there and work their cases until exhaustion. Legal-Bay made a name for themselves and the brand early on.

By 2018 we had made investments and partnerships in 2 startup funds, guided by my knowledge, that saw total AUM over $100MM. During those times we focused on origination and intake and let our partners work on capital raising. So, not having all our own capital made us part broker, part funder — hence why I said hybrid. All through it, we maintained our identity — and still do to this day — that when you call Legal-Bay you will always get a live person. Ultimately in 2023 we decided, after 5 years of a successful joint venture, to sell out of our profit share and create a liquidity event for Legal-Bay that gave us enough capital to go on our own and have a full end-to-end process right in our office from intake to funding to servicing, while still never losing our key identity.

You're looking to raise $25 million to fuel this next phase. What does that capital allow Legal Bay to do that it couldn't do before, and what are institutional investors looking for when they evaluate a consumer legal funding platform in 2026?

We have outgrown our capital needs and are looking to double our AUM in the next 2-3 years. The only way to grow in this business is you need to be putting out more money than what is coming back. You always want to have good portfolio turnover to show you are booking profits and picking the right cases, but in order to scale and grow, your originations need to be higher than your inflows coming back. That's what the capital is going to allow us to do — aggressively market in all 3 revenue channels we have and build core attorney relationships at the right pricing. And you guessed it: customer service.

Institutional investors are looking to evaluate every single last detail of your operation. We were lucky to have partners in the past that we basically outsourced this to, but I learned a lot through that process when I would pitch in with policy and procedures. So, we have a team now that is fully prepared with a full-scale data room that gives any investor a full understanding of any part of our business with a point and click.

New York just enacted the Consumer Litigation Funding Act, Kansas passed its own version, and more states are moving toward regulation. As someone who's operated through every phase of this market, do you see regulation as a competitive advantage for established players like Legal Bay, or does it create new headaches?

This is a double-edged sword and you hit on a chord that many of the smaller or medium-sized companies are going through. I'll take you back to when I started in this business and a new investor asked me, "what keeps you up at night?" And I said "regulation" — we had no idea which way the wind was going to blow. Litigation funding was a new frontier. Now, regulation is totally providing credibility to the industry, and the only thing that keeps me up at night is making sure our compliance team is up to speed on each and every state's compliance requirements. It takes a lot of resources and can create those headaches at times, but states are now giving us a privilege to service their consumers, and it is our job to ensure we are doing everything perfectly. Being a part of ARC and seeing what Eric Schuller has done for consumer funding throughout the country — going state to state in passing advantageous regulations — has been very inspiring. I am excited about building off of this in even more states in the future, despite the obstacles.

I do have one thing I would like to see, and that is getting a federal contract or guideline for litigation funding. With the nationalization of technology, it really makes more sense that there is one standard federal contract that works for all. That would remove a lot of those headaches.

Looking ahead, where do you see the biggest growth opportunities in consumer legal funding over the next three to five years, and how is Legal Bay positioning itself to compete against both the large institutional funders moving downstream and the smaller shops still brokering deals?

As the US population grows, more lawsuits are coming into the system and the backlog of cases each year grows. So the market breadth is growing, and that trend will continue. Additionally, I see a huge market in commercial funding for small to medium-sized deals — that is a market that is greatly underserved and something that Legal-Bay is working on specifically to develop that product further. Also, with the advent of better technology — AI, smart phones, and medical science — cases are much easier to be made based on strong liability and sciences. So it is becoming harder for defense teams to fight clear and convincing evidence or proof. Legal-Bay has prided itself on investigating emerging litigations in mass torts and being the first funder in, and we see this as a leg up for us in competing against the best in the future as well.

John Lopes is a market-leading bank executive and recognized authority in financial solutions for the plaintiff-side legal industry. As Senior Managing Director and Head of Specialized Legal Banking at First Horizon Bank, he leads a national platform focused on delivering capital, deposit, and technology solutions to contingency-based law firms, mass tort practices, claims administrators, and Qualified Settlement Funds (QSFs).

John began his career over 20 years ago advising AM Law firms, building a strong foundation in traditional legal banking and developing deep expertise in the operational and financial dynamics of large defense-side practices. He later held leadership roles at institutions including Citibank, Wells Fargo, and Western Alliance Bank, where he managed significant portfolios, built high-performing teams, and executed strategic growth initiatives across the legal vertical.

Over a decade ago, John identified a critical gap in the market and shifted his focus to the plaintiff side of the bar—where firms face unique challenges related to contingent revenue, cash flow volatility, and complex settlement structures. Since then, he has become a trusted advisor to many of the nation's leading plaintiff law firms and ecosystem partners, structuring sophisticated credit facilities, supporting billions of dollars in settlement flows, and delivering innovative banking solutions across the full lifecycle of litigation.

John is known for his ability to bridge capital, technology, and legal strategy—partnering with law firms, claims administrators, and litigation finance providers to drive growth, enhance liquidity, and create operational efficiency at scale. Through his leadership, he continues to position First Horizon as a premier banking partner to the plaintiff bar, bringing institutional-grade capabilities to a rapidly evolving segment of the legal industry.

He holds a background in financial markets from Yale University and has continued to build on that foundation through executive education with the Yale School of Management.

Below is our LFJ Conversation with John Lopes:

What gaps in the settlement and mass tort landscape led you to build a dedicated Settlement Services platform?

Historically, most banks approached settlement accounts as transactional escrow relationships rather than as a specialized vertical requiring tailored infrastructure. As mass tort and class action settlements have grown in size and complexity, that model became insufficient.

We saw several structural gaps:

• Lack of dedicated infrastructure for high-volume sub-accounting and audit transparency
• Limited understanding of QSF governance, fiduciary responsibilities, and multi-party oversight
• Manual disbursement processes that created inefficiencies and risk
• Inflexible credit solutions for contingency firms managing large case inventories

We built our Specialty Legal Banking group to address those gaps holistically — combining dedicated settlement banking, digital sub-accounting, modern disbursement capabilities, and tailored financing solutions under one coordinated platform.

Rather than treating settlements as ancillary deposits, we treat them as a highly specialized ecosystem requiring neutrality, transparency, and purpose-built technology.

Courts increasingly demand transparency and auditability. How do you see expectations evolving around reporting and fiduciary accountability?

Expectations are rising meaningfully. Judges and special masters now expect:

• Real-time visibility into balances
• Clear segregation of funds at the claimant or fee level
• Transparent interest allocation methodologies
• Clean audit trails across every transaction

In complex QSFs, accountability is no longer theoretical — it must be demonstrable.

We've responded by building a platform that allows structured sub-accounting at scale, defined user permissions (analyst vs. approver roles), exportable audit logs, and reporting that aligns with court oversight requirements.

The future standard will be near real-time transparency, not quarterly reconciliation. Specialized banks must offer specialized infrastructure to the settlement process — not just holding funds.

What are the most significant fraud or AML risks facing settlement administrators today, and how can institutions mitigate them without slowing distributions?

The scale and speed of modern distributions introduce new risk vectors:

• Synthetic identity and claimant impersonation
• Payment redirection and ACH fraud
• Social engineering attacks targeting administrators
• Sanctions and cross-border payment compliance risk

The key is not adding friction — but adding intelligent controls. Financial institutions must offer:

• Multi-layer payment verification protocols
• OFAC and sanctions screening at both onboarding and disbursement
• Segregated user permissions and dual-approval workflows
• Positive pay and transaction monitoring services

Technology should accelerate payments while reducing exposure. The answer is not slowing distributions — it's modernizing controls around them.

Claimants now expect faster access to funds and more flexibility in how they receive payments. How is innovation reshaping the claimant experience?

The claimant experience is evolving dramatically.

Traditional paper checks are increasingly insufficient. Claimants now expect options — ACH, prepaid cards, digital wallets, and other electronic modalities — delivered quickly and securely.

Real-time rails and digital disbursement platforms are reshaping expectations around:

• Speed
• Choice
• Transparency of payment status

At the same time, the institution must provide tools so that flexibility coexists with compliance and oversight.

The institutions that succeed will be those that can offer multiple payment modalities within a controlled, audit-ready environment. That's where innovation truly adds value — not just convenience, but structured efficiency.

As litigation finance and aggregate settlements continue to grow, what role should specialized settlement banks play in reinforcing neutrality and trust?

As capital flows increase in mass tort and aggregate litigation, neutrality becomes even more critical. A specialized settlement bank must function as a stabilizing counterparty amid multi-party financial arrangements. In large aggregate settlements — especially where litigation finance is involved — clarity around control, reporting, and fee segregation becomes paramount.

Our role is not to influence outcomes, but to provide a compliant, transparent, and scalable platform that reinforces trust across all stakeholders: plaintiffs' firms, defense counsel, administrators, courts, and capital providers.

Ultimately, trust in the settlement process depends on financial infrastructure that is purpose-built for complexity — and governed by strong compliance standards.

John Lopes is a market-leading bank executive and recognized authority in financial solutions for the plaintiff-side legal industry. As Senior Managing Director and Head of Specialized Legal Banking at First Horizon Bank, he leads a national platform focused on delivering capital, deposit, and technology solutions to contingency-based law firms, mass tort practices, claims administrators, and Qualified Settlement Funds (QSFs).

John began his career over 20 years ago advising AM Law firms, building a strong foundation in traditional legal banking and developing deep expertise in the operational and financial dynamics of large defense-side practices. He later held leadership roles at institutions including Citibank, Wells Fargo, and Western Alliance Bank, where he managed significant portfolios, built high-performing teams, and executed strategic growth initiatives across the legal vertical.

Over a decade ago, John identified a critical gap in the market and shifted his focus to the plaintiff side of the bar—where firms face unique challenges related to contingent revenue, cash flow volatility, and complex settlement structures. Since then, he has become a trusted advisor to many of the nation's leading plaintiff law firms and ecosystem partners, structuring sophisticated credit facilities, supporting billions of dollars in settlement flows, and delivering innovative banking solutions across the full lifecycle of litigation.

John is known for his ability to bridge capital, technology, and legal strategy—partnering with law firms, claims administrators, and litigation finance providers to drive growth, enhance liquidity, and create operational efficiency at scale. Through his leadership, he continues to position First Horizon as a premier banking partner to the plaintiff bar, bringing institutional-grade capabilities to a rapidly evolving segment of the legal industry.

He holds a background in financial markets from Yale University and has continued to build on that foundation through executive education with the Yale School of Management.

Below is our LFJ Conversation with John Lopes:

What gaps in the settlement and mass tort landscape led you to build a dedicated Settlement Services platform?

Historically, most banks approached settlement accounts as transactional escrow relationships rather than as a specialized vertical requiring tailored infrastructure. As mass tort and class action settlements have grown in size and complexity, that model became insufficient.

We saw several structural gaps:

• Lack of dedicated infrastructure for high-volume sub-accounting and audit transparency
• Limited understanding of QSF governance, fiduciary responsibilities, and multi-party oversight
• Manual disbursement processes that created inefficiencies and risk
• Inflexible credit solutions for contingency firms managing large case inventories

We built our Specialty Legal Banking group to address those gaps holistically — combining dedicated settlement banking, digital sub-accounting, modern disbursement capabilities, and tailored financing solutions under one coordinated platform.

Rather than treating settlements as ancillary deposits, we treat them as a highly specialized ecosystem requiring neutrality, transparency, and purpose-built technology.

Courts increasingly demand transparency and auditability. How do you see expectations evolving around reporting and fiduciary accountability?

Expectations are rising meaningfully. Judges and special masters now expect:

• Real-time visibility into balances
• Clear segregation of funds at the claimant or fee level
• Transparent interest allocation methodologies
• Clean audit trails across every transaction

In complex QSFs, accountability is no longer theoretical — it must be demonstrable.

We've responded by building a platform that allows structured sub-accounting at scale, defined user permissions (analyst vs. approver roles), exportable audit logs, and reporting that aligns with court oversight requirements.

The future standard will be near real-time transparency, not quarterly reconciliation. Specialized banks must offer specialized infrastructure to the settlement process — not just holding funds.

What are the most significant fraud or AML risks facing settlement administrators today, and how can institutions mitigate them without slowing distributions?

The scale and speed of modern distributions introduce new risk vectors:

• Synthetic identity and claimant impersonation
• Payment redirection and ACH fraud
• Social engineering attacks targeting administrators
• Sanctions and cross-border payment compliance risk

The key is not adding friction — but adding intelligent controls. Financial institutions must offer:

• Multi-layer payment verification protocols
• OFAC and sanctions screening at both onboarding and disbursement
• Segregated user permissions and dual-approval workflows
• Positive pay and transaction monitoring services

Technology should accelerate payments while reducing exposure. The answer is not slowing distributions — it's modernizing controls around them.

Claimants now expect faster access to funds and more flexibility in how they receive payments. How is innovation reshaping the claimant experience?

The claimant experience is evolving dramatically.

Traditional paper checks are increasingly insufficient. Claimants now expect options — ACH, prepaid cards, digital wallets, and other electronic modalities — delivered quickly and securely.

Real-time rails and digital disbursement platforms are reshaping expectations around:

• Speed
• Choice
• Transparency of payment status

At the same time, the institution must provide tools so that flexibility coexists with compliance and oversight.

The institutions that succeed will be those that can offer multiple payment modalities within a controlled, audit-ready environment. That's where innovation truly adds value — not just convenience, but structured efficiency.

As litigation finance and aggregate settlements continue to grow, what role should specialized settlement banks play in reinforcing neutrality and trust?

As capital flows increase in mass tort and aggregate litigation, neutrality becomes even more critical. A specialized settlement bank must function as a stabilizing counterparty amid multi-party financial arrangements. In large aggregate settlements — especially where litigation finance is involved — clarity around control, reporting, and fee segregation becomes paramount.

Our role is not to influence outcomes, but to provide a compliant, transparent, and scalable platform that reinforces trust across all stakeholders: plaintiffs' firms, defense counsel, administrators, courts, and capital providers.

Ultimately, trust in the settlement process depends on financial infrastructure that is purpose-built for complexity — and governed by strong compliance standards.

Ian is a qualified solicitor (non-practicing) in England & Wales. Having been involved in the Legal Expenses Insurance industry since November 1992, he has dealt with Before the Event (BTE) and After the Event (ATE) Legal Expenses Insurance in its various forms.

His work has included underwriting for ATE cover, a number of the early competition claims seeking damages for abusive anti-competitive conduct being brought then both in the High Court and Competition Appeals Tribunal (CAT) in England.

He also underwrote for ATE cover a number of group actions many of which were run under Group Litigation Orders (GLO) and other case management devices, spanning a wide variety of case types. Ian has underwritten numerous commercial litigation cases, civil fraud claims and insolvency matters.

Since 2020 Ian has acted as a broker, intermediating various insurance products relating to litigation and arbitration risks as well as intermediating litigation funding requirements where required.

Below is our LFJ conversation with Ian Coleman:

There are many strong opportunities available in the UK with excellent law firms. The use of litigation funding has become normalised in conjunction with ATE Insurance to cover the adverse costs exposure. Litigation funding is no longer seen as a tool just for the impecunious.

Opportunities range from commercial arbitration and investor state disputes to commercial litigation, civil fraud claims and of course the various forms of competition compensation claims conducted in the Competition Appeals Tribunal (CAT).

The availability of litigation funding frequently drives the law firm enquiry.

The Supreme Court decision in PACCAR remains current authority albeit that the Government has said that it will legislate to reverse the position and has received recommendation that be both retrospective and prospective. The caveat being when parliamentary time allows. However, a multiple on capital deployed (or in some cases committed) is permitted offering healthy returns for investors.

It has been suggested that ‘light touch regulation’ will be included in any such legislation or in follow-on legislation. The Lord Chancellor requested advice from the Civil Justice Council (CJC) with regards to the question of regulation. The CJC published its Final Report in June 2025. The CJC has recommended that regulation should not apply to arbitration proceedings as it should remain a matter for arbitral centres to determine whether and, if so, how any such regulation should be implemented. In Court and CAT proceedings regulation of litigation funders should be weighted according to whether the funding is provided to consumers or commercial parties.

The CJC suggests a minimum, baseline, set of regulatory requirements should therefore apply to litigation funding generally. These should include provision for: case-specific capital adequacy requirements; codification of the requirement that litigation funders should not control funded litigation; conflict of interest provisions; the application of anti-money laundering requirements; and disclosure at the earliest opportunity of the fact of funding, the name of the funder, and the ultimate source of the funding. The terms of LFAs should not, generally, be subject to disclosure.

It should be noted that the CJC specifically rejected the introduction of caps on litigation funders’ returns.

Law firm portfolio funding or case by case funding are options to consider albeit a balance of the law firm’s and their clients’ needs will be key in deciding which approach is requested. The CJC has recommended specific regulatory provisions for portfolio funding.

What is known as ‘The Arkin Cap’ continues to provide that the Court can make an appropriate decision concerning litigation funder liability for adverse costs on a case-by-case basis. For this reason, litigation funders will inevitably require that suitable ATE is in place.

It should be noted that no regulation has yet been introduced and it is debatable when there will be parliamentary time to attempt to do so. In any event regulation logically would be prospective only.

Where litigation funding is sought it is extremely common in the UK for ATE Insurance to be required as part of the package and often Capital Protection Insurance is purchased by the litigation funder. Most of the insurance capacity for these products emanates from markets based in London.

Insurance may only be sold into a territory for which the insurer has a licence. The licencing requirements are dictated by the domicile of the Proposer (the party seeking insurance).

The Insurers invariably have a licence for the UK and Europe but not necessarily for other territories. In order to maximise the choice of insurance offerings the Proposer is ideally domiciled somewhere in the UK or Europe.

Where the Litigation Funder seeks Capital Protection Insurance (CPI) domiciling the SPV in say Guernsey may have a double benefit both in terms of insurance availability (to achieve the best terms) but also to maximise tax efficiencies. Most jurisdictions levy some form of insurance tax, but those that do not may be seen as attractive to the party paying the insurance premium. Any Litigation Funder seeking to set up an SPV in a tax and licencing friendly location should of course make their own enquiries in order to satisfy themselves that both requirements are met in that particular territory.

Where the Claimant is domiciled in a location that raises licencing challenges this may be overcome by the Litigation Funder providing an Adverse Costs Indemnity via its funding SPV and obtaining the ATE Insurance to cover off that risk.

This will however generally mean that security for costs must be provided but the ATE Policy can be fortified with what has become known as an Anti-Avoidance Endorsement (AAE). AAEs have been accepted in the UK Courts and in many arbitral forums.

Notwithstanding the place of domicile of the Proposer, the insurance policies will generally be written on the basis that the policy is governed by English Law and accordingly the duty of disclosure for the Proposer will be set out in the Insurance Act 2015 for non-consumers and Consumer Insurance (Disclosure and Representations) Act 2012 for consumers.

CPI can be obtained to protect some or all the capital deployed. This can be purchased either on a portfolio basis or case by case. Both methods have their advantages and disadvantages and that discussion deserves its own separate analysis. Both do mitigate the risk of losing capital. The scope of claim circumstances is a matter of negotiation with Insurers.

Generally, the conducting law firm will require some funding of their fees. Their fees can be further insulated from risk by Work in Progress Insurance (WiP) which protects an element of base fees should the claim be unsuccessful. In some circumstances WiP may be used to curtail the funding requirement.

For bilateral investment treaty arbitrations Arbitral Award Default Insurance (AADI) may also be available.

ATE is used commonly where costs follow the event to protect the risk of the claimant and litigation funder becoming liable for adverse costs.

There has been much discussion about the CAT since the changes in 2015. Case longevity, case outcomes and distribution have been frequent topics of conversation. The question to be posed is whether ‘herd-thought’ means that good opportunities are being over-looked. That has most certainly been the experience of the writer.

The sector in the UK has a number of strong law firms, and the CAT requirements are being clarified with decisions that are now flowing through the forum.

Decisions from senior Courts have further assisted in setting out road maps for bringing and conducting such cases particularly with regards to Opt-Out and abuse of dominant position claims.

It should not be a surprise that as the new regime bedded in the earlier cases would take longer to conclude and the pathway would need to be set.

In Opt-Out cases the CAT does consider the funding and ATE packages at Certification stage together with the Class Representative’s understanding of how they work. Whilst certification can be refused on the basis of the above it does not equate in the event of certification to a blessing of the arrangements which can be revisited later.

Sensible pricing models from the outset are important. Certification will now have some regard to the merits of the claim, scope of the defined class and distribution. These can all be well managed to substantially mitigate the risk of the CAT subsequently intervening in stakeholder entitlements.

For cases that are not Opt-Out the above considerations do not apply.

The hygiene factor around funds being used to support litigation and arbitration matters is increasingly significant. Litigation Funders should be aware of this and consider the level of checks that are required in other financial sectors. Matters such as KYC, AML, UBOs and sanctions / PEP enquiries are often mandatory. This approach would be reflective of the CJC recommendations.

The confirmation that such checks have been conducted and were satisfactory could well prove to be decisive where there are competing offers of litigation funding on the table.

Jason Levine is an antitrust and commercial litigation partner in the Washington, D.C. office of Foley & Lardner LLP.  He previously served as the D.C. office head, and head of U.S. antitrust strategy, at Omni Bridgeway, a global commercial litigation finance company.

Jason’s legal background spans over 25 years in private practice as a first-chair trial lawyer and antitrust litigator in several multinational law firms.  He has tried over a dozen cases and served as lead counsel for plaintiffs and defendants in numerous billion-dollar disputes, including defending against two of the nation’s largest antitrust MDLs.  Jason graduated cum laude from Harvard Law School and clerked for Judge Randall Rader on the U.S. Court of Appeals for the Federal Circuit.

Where does litigation finance add the most value in antitrust cases, particularly given their scale, duration, and cost profile? 

As in any complex dispute, litigation finance adds significant value in antitrust cases by shifting the risk of fees and legal costs away from the plaintiff or the law firm and to a funder.  Antitrust cases are particularly well-suited to litigation finance because they can be exceptionally costly, require specialized counsel and often multiple expert witnesses, tend to have a long duration, and can involve massive amounts of discovery.

The aspects of the case where a financing arrangement adds the most value will vary depending on the funding mechanism.  If a law firm is handling a matter on a contingent fee basis, then the greatest value from financing typically comes from covering the legal costs the firm would otherwise advance on its own.  Outside a contingent fee scenario, financing is most important in paying counsel’s legal fees, although the funder may also cover legal costs.  The universal point is that, for companies pursuing antitrust litigation, financing can be very attractive because it is non-recourse, permits the company to reserve its legal budget for defensive and compliance matters that are not amenable to financing, and helps convert the legal function from a proverbial “cost center” into a revenue generator.

Funding also increases the client’s options for which counsel to retain, which is particularly important in antitrust cases given their nature.  With outside financing covering legal fees and costs, the client can focus more on the expertise and “fit” of counsel than on their billing rates.  Relatedly, litigation finance can enable a small company to hire a “Big Law” firm that doesn’t offer contingent fee arrangements, rather than potentially being limited to a firm that does.  The same point applies to expert witnesses, making the top echelon available whereas they might otherwise have been prohibitively expensive.

In short, with a meritorious case and litigation financing behind it, a small corporate plaintiff can match a much larger defendant’s litigation resources.  This benefit of leveling the playing field is very clear in antitrust cases, given their scope and cost to litigate, which helps explain why they are funded at a higher rate than most other categories of commercial litigation.

Are there specific types of antitrust claims or procedural postures where you think funding is especially well suited?

Funding is very well suited to antitrust claims where a company has opted out of a class action and is pursuing its claim independently.  This is particularly true if the opt-out occurs after the putative class action has survived motions to dismiss, if not class certification.  At either point, a funder will consider the opt-out case at least partly de-risked.

This benefits the funder because the case is less risky and will have a shorter remaining duration.  It benefits the funding counterparty because the funder’s required return should be lower, given the de-risking, leaving more of the proceeds for the client and the law firm to share.  Substantively, funding is well suited to various kinds of antitrust cases, so long as quantifiable money damages are at stake rather than solely injunctive relief.

What regulatory or legislative developments in litigation finance should antitrust litigators be paying closest attention to right now?

There is significant activity at both the federal and state level that warrants attention, although not specific to antitrust cases.  At the federal level, bills have been proposed that would seek to compel detailed disclosures of the existence and details of litigation financing arrangements, including to the adverse parties.  Another bill would seek to largely shut down the involvement of foreign entities in litigation finance, both by prohibiting the practice by certain state-affiliated actors and also by requiring extremely detailed disclosures by others.

Although it’s fair to say that none of these proposals are a very high legislative priority, they definitely warrant attention, given how far the proposed federal tax on litigation finance proceeds progressed in 2025.  That tax has not been formally re-introduced yet, but that is another possibility that would merit watching.

As the midterm elections in 2026 draw closer, the prospects for movement on any of these proposals will likely decrease, with the exception of a possible “midnight rider” slipped into a year-end Appropriations bill.  That’s something else to watch out for.  In addition, the Advisory Committee on the U.S. Federal Rules of Civil Procedure is considering potential Rule amendments involving disclosure of litigation funding uniformly in federal cases, and this is worth monitoring as well.  Given all these developments, defendants have an increased incentive to seek information about litigation funding arrangements through discovery requests.

At the state level, at least a dozen states are perennially considering different disclosure regimes and regulations that would complicate the use of litigation finance.  Some of this is performative, having failed multiple years in a row in some states.  I would keep a particularly close watch for state-specific versions of the litigation finance tax that failed to pass in the U.S. Senate last year, especially in California, New York, Texas, Florida, and Illinois.

How do you expect evolving disclosure or taxation proposals to affect big firm strategy in funded matters?

Certainly, large law firms that are considering funding arrangements, or that have them already, will be monitoring the regulatory landscape for important developments.  I would anticipate that the imposition of new regulations in general will cause firms to focus closely on compliance, both on their part as either funded counterparties or as counsel to them, and also on the part of funders.  This might lead to a tendency to favor larger, more established funders that have robust internal compliance capabilities.

Law firms and their funded corporate clients will also likely scrutinize funding agreements even more carefully.  Similarly, if any new industry-specific taxes are enacted, law firms will likely focus on funders’ ability to adapt their return structures to minimize the passed-through impact.  Pricing in line with the market is always important, but potential tax changes could highlight this even more.  Greater regulation could also lead to further consolidation in the litigation finance industry, leaving fewer – but likely larger – companies in the space, making it all the more important for law firms to seek out whatever edge a particular funder can provide in a deal.

I would not expect any new disclosure or taxation regimes to change the way law firms actually litigate their cases, with the exception of disclosure requirements giving rise to more discovery efforts aimed at funding arrangements.  It is possible that a new, aggressive disclosure regime could give certain companies pause about pursuing funding, but I also consider this unlikely to change law firm litigation strategy.

Based on your own transition, what advice would you give Big Law partners or senior associates considering a move into litigation finance or a finance adjacent role?

I would advise them to be patient and to focus on relationships.  Litigation finance companies do not have a classic recruiting pattern like law firms do.  Headcounts tend to remain steady, with opportunistic hiring for purposes of expansion or replacement of departing personnel.  I know several people whose transitions from a law firm into litigation finance took over a year because there simply weren’t openings available.  In that situation, it’s important make contacts at one or more companies and check in with them periodically, because expressing interest in a position and staying top of mind can make all the difference.  A warm internal introduction is much more valuable than cold outreach.

I would also recommend gaining direct exposure to litigation finance before seeking out a position.  Funders will favor partners and associates who have previously handled funded litigation or at least negotiated deal terms with a funder.  This not only credentializes the job-seeker’s interest in a role, it also demonstrates some familiarity with the industry and how it operates.  Relatedly, job-seekers should learn as much as they can about the funder as possible before approaching it.  What kinds of cases does it fund?  Does it have geographical limits, or funding amounts that it favors?  This information is often on the company’s website, and knowing it shows diligence and also helps ensure fit.  For the few publicly traded funders, I strongly recommend reviewing investor materials and annual reports before interviewing.

In addition, particularly for partners, I would emphasize the importance of objectively assessing one’s network and prospects for helping to generate deal flow.  Similar to a law firm, at most funders, origination is a key aspect of a more senior role.  What is your base of potential funding clients?  Do you have strong contacts with litigation business generators at multiple law firms, or with well-placed in-house counsel at companies with suitable litigation?  Are your contacts limited to particular kinds of litigation, and if so, are those ones that tend to receive funding?

These are important questions to answer as granularly as possible before approaching a funder for a job.  For more junior lawyers, consider where you would fit in the funder’s structure, and how you can add value, particularly in the nuts and bolts of underwriting cases.  Here, again, subject matter is important.  Expertise in areas of law that don’t yield funded cases is unlikely to support the business care for a new hire.

In this episode of the LFJ podcast, we sat down with Lauren Harrison, co-founder and managing director of Signal Peak Partners, to discuss Signal Peak's upcoming symposium on February 26th, in Houston, Texas.

Lauren discussed what makes this conference different from the other industry events, what we can expect in terms of themes and panel discussions, the keynote speech honoring H. Lee Godfrey of Susman Godfrey fame, and other issues surrounding the litigation finance space.

For more information on Signal Peak's upcoming event, visit their website.

Thomas is the Founder of Fenaro, a modern fund management platform for litigation finance. He holds a law degree from Durham University and has spent his career designing and delivering large-scale, complex financial services platforms. Prior to founding Coremaker's Fenaro product, he spent much of his career at Accenture, PwC, and other management consulting firms, working with global banks, asset managers, and institutional investors.

Below is our LFJ Conversation with Thomas Bell:

The litigation finance industry has grown to over $16 billion, yet your blog notes that many firms still run on spreadsheets. What specific operational pain points do fund managers face with legacy systems, and how does Fenaro address them? 

Despite the industry’s rapid growth, most litigation funders continue to rely on in-house spreadsheets or fragmented systems that are not designed to handle litigation finance. From our conversations with funders across the market, three operational pain points consistently arise.

The first is calculation risk. Funders regularly tell us about issues arising from manual models and fragile data infrastructure, ranging from investor reports needing to be reissued due to errors (surprisingly common), to material budget discrepancies only being identified late in a case lifecycle (less common, but in some cases career-ending). Purpose-built fund management systems substantially reduce this risk by centralising data and automating complex calculations.

The second is friction with law firms after a deal has closed. One funder summarised their biggest challenge as “getting lawyers to think in IRR terms.” In practice, this reflects the lack of efficient processes for tracking budgets, agreeing drawdowns, reviewing invoices, and sharing case updates. Fenaro addresses this through the borrower portal, which provides law firms with a structured and transparent way to work with funders throughout the life of an investment, resulting in a much more positive relationship.

The third is operational complexity limiting scale. Many funders speak candidly about ambitious growth plans being constrained by manual reporting, bespoke processes, and operational bottlenecks. Without greater standardisation and automation, it is difficult to scale portfolios or support increased institutional participation. Fenaro is built from the ground up to reduce the overhead of operational processes, while giving funders all the key information required to focus on growing and managing the fund.

In mass tort strategies, some funders are managing regular updates across tens or even hundreds of thousands of individual claims and many different law firms. Several have told us that keeping this information accurate and up to date is a data nightmare that quickly becomes unmanageable, and worry they’re spending too much time on administrative data-wrangling efforts, and not enough time on actually mining the content for value.

Fenaro is designed to process high volumes of case data from multiple law firms in a consistent format. Updates can be submitted through borrower portals or uploaded directly, allowing funders to see the status, valuation, and history of every claim at a glance. As part of this process, the platform runs validation checks and identifies potential duplicate claimants, a serious and well-known issue in mass tort funding. The same validated data is then used to produce investor and internal reports without the need for manual reconciliation.

We frequently hear that fund visibility tends to drop sharply after capital is deployed. Monitoring budgets, drawdowns, and expenditure often relies on periodic reporting and manual review.

Fenaro provides funders with continuous visibility at both the portfolio and case level. At the same time, Fenaro gives law firms access to a free borrower portal. Contrary to the perception that firms resist new technology, many lawyers have told us directly that they are willing to adopt tools that reduce administrative burden and improve clarity. The borrower portal allows firms to track funding, compare spend against budgets, submit updates, and request additional capital, reducing friction on both sides and improving the overall relationship.

Funders often tell us that building and maintaining waterfall models in spreadsheets is one of the most time-consuming and error-prone parts of the investment process. Fenaro allows complex waterfalls to be configured in seconds, with multi-step logic based on capital return, interest, IRR, MOIC and other calculation types.

A flow view presents the waterfall logic in plain English, and scenario-modelling functionality allows users to test scenarios and explain outcomes to investment committees and LPs. Once a deal is live, waterfalls update automatically as cashflows occur, removing the need for repeated spreadsheet rework and reducing calculation risk.

Many funders we speak to see the biggest opportunities in greater standardisation, which would help unlock institutional capital and support a more liquid secondary market. There is still significant friction in how funders, law firms, investors, insurers, and brokers interact, and we’re tackling this one step at a time, focusing on the most pressing pain points first.

We are also frequently asked about AI and machine learning. Our view is that near-term value lies in decision support rather than decision replacement—particularly in reducing the time spent evaluating the majority of cases that are ultimately declined, while equipping underwriters with better information to make faster, more confident decisions. It will likely be some time before the technology is sufficient to take underwriting decisions on behalf of the funder, given the complexity and variation of the underlying legal cases, but things are moving quickly in the AI space so we continue to test and review various models as they evolve.

Rory is the CEO of Eperoto, championing the use of decision analysis to improve clarity around litigation and arbitration risk. Originally from New Zealand, he's worked within legal technology for decades, delivering innovative solutions to the top global firms, government, as well as specialist legal boutiques.

Below is our LFJ Conversation with Rory Kingan:

Eperoto’s approach emphasizes using lawyer judgment rather than AI or data-driven models. Why is that distinction important, and how does it build trust among lawyers, funders, and other stakeholders?

At Eperoto, we believe that lawyer judgement is the foundation of credible litigation and arbitration analysis. High-stakes disputes aren’t like consumer tech problems where large-scale historical data exists and small inaccuracies are insignificant. They're unique, context-dependent situations where experience and nuanced legal reasoning are irreplaceable. In most commercial cases, AI simply doesn’t have the training data or contextual nuance to make defensible predictions. Right now it also struggles with the complexity of jurisdictional variation and the role of precedent. No funder or sophisticated client should rely on a generic model to value a multi-million-dollar dispute.

Litigation and arbitration are inherently grey-zones. Outcomes turn not only on points of law, but also on credibility assessments, witness performance, tribunal psychology, and how fact narratives are perceived. These are areas where AI is weak and where judges and experts routinely disagree. Research across behavioural psychology and negotiation theory shows that human reasoning is still essential in these environments. Lawyers will often use an AI tool as a sounding board to explore different ideas and arguments, but ultimately they rely on their own judgement and reasoning to assess how different elements of the case are likely to unfold.

Eperoto is therefore built around a simple principle: Lawyers make the judgement; the platform helps them to structure and quantify it.

This distinction builds trust for three reasons:

1. It reflects how top practitioners already work. Clients retain leading counsel for their experience, intuition, and ability to form a reasoned opinion, not for machine-generated answers.
2. It avoids “false precision.” AI-driven confidence levels often create a misleading impression of certainty. Eperoto keeps the human experts in control.
3. It aligns with stakeholders’ expectations. Funders, insurers, GCs, CFOs and boards want a lawyer’s professional assessment, but expressed in a structured, decision-analytic way. Eperoto strengthens, rather than replaces, that judgment.

The result is a decision-analysis workflow that is transparent, explainable, and fully grounded in legal expertise. Precisely what stakeholders need to trust the numbers behind a funding or settlement decision.

When litigation funders assess potential cases, they often rely on intuition and experience. How does Eperoto help them quantify risk and likely outcomes in a way that strengthens those investment decisions?

Every litigation funder knows that a case is a contingent asset, and valuing that asset depends on understanding the likelihood of outcomes at trial or arbitration. Yet the process used to reach those views is usually unstructured, highly subjective, and difficult to defend when presented to an investment committee or external partner.

Eperoto addresses this by helping lawyers to apply decision-tree analysis. This is a method used for decades in energy, pharma, finance, and indeed litigation. Instead of relying purely on intuition, lawyers:

1. Map the key uncertainties. What issues drive liability? Likely quantum outcomes? How might damages be reduced? Where do procedural or evidentiary risks sit?
2. Assign probabilities grounded in legal judgment. No AI predictions: purely the lawyers’ professional view expressed clearly rather than implied.
3. Estimate costs & cost-shifting, interest, and any enforcement risk.

From this the tool calculates a visual quantitative risk report, showing funders the likely outcomes, expected value, downside scenarios, tail risk, and more.

This sort of analysis:

• makes an investment case more rigorous,
• dramatically improves internal and external defensibility, and
• surfaces insights impossible to see from narrative memos alone.

Funders, insurers, and counsel repeatedly tell us that this level of clarity is transformative. It sharpens decisionmaking, strengthens underwriting discipline, and improves alignment across stakeholders. Over time, a consistent, structured approach creates a more disciplined portfolio and generates a feedback loop that measurably improves investment decisions.

Clearer communication of risk and value benefits all stakeholders. What are the biggest barriers to achieving that clarity in practice?

The biggest barrier is language ambiguity. A typical merits opinion reads something like:

“It's most likely the defendant will be found liable for X, with only an outside chance the court will accept the argument Y. Damages could be as high as Z.”

Terms such as “very likely,” “little chance,” or “low risk” are interpreted wildly differently by different people, even among seasoned professionals. Research consistently shows a huge disparity in how people interpret such terms. For example "unlikely" can be interpreted as meaning anywhere from below 10% to over 40% likely to occur. Your investment decisions shouldn’t be subject to this margin of error just from internal communications.

A second barrier is complexity overload. Lawyers often present lengthy written analyses where different legal issues are explained sequentially:

“X might happen, but if not then Y. In that case Z will determine…”

Decision-makers are left to combine all these uncertainties mentally, plus litigation costs, insurance, interest, enforcement risks, appeal probabilities, and timing assumptions. Even highly experienced professionals can't intuitively do this correctly.

Eperoto solves these issues in three ways:

a) It forces clarity through quantification. “80% likelihood the contract is valid” is unambiguous, whereas “very likely” may be understood as 65% by one person and 95% by another.

b) It combines the factors automatically. No one needs to mentally integrate legal issues, damages pathways, costs, or conditional dependencies.

c) It presents the analysis visually. Charts and diagrams let stakeholders see the shape of the dispute, rather than reading dense text.

Together these remove unnecessary complexity, leaving stakeholders to focus on the true strategic questions rather than being stuck in ambiguous details.

Many lawyers hesitate to provide quantitative estimates because they fear being “wrong.” How do you encourage practitioners to engage with uncertainty in a more structured, transparent way?

This is a common concern, but it fundamentally misunderstands what quantification achieves. Providing estimates numerically doesn't remove uncertainty, it communicates it transparently. The alternative isn't "not being wrong"; it's being vague, which is far worse for the client or investor.

Sophisticated clients, funders, and boards understand that litigation outcomes are uncertain. What they want is clarity, not perfection. Yes, you should still make clear that a percentage estimate is not a promise; it is a transparent reflection of professional judgement, less ambiguous than vague adjectives. But once everyone accepts that, it allows for greater clarity and indeed honesty.

We encourage lawyers to adopt a mindset similar to experts in other industries:

• Quantification is not about being right; it’s about making uncertainty explicit.
• A structured model allows you to compare multiple scenarios, e.g. optimistic vs pessimistic or comparing different counsel’s assessments.
• Visual decision-trees help practitioners and clients see how different issues interact without needing to commit to one “correct” narrative.

Lawyers often find that once they begin using numeric estimates and decision trees, discussions with clients become easier, expectations align more quickly, and advice becomes more defensible. Many even rely on the visual component alone when presenting paths, strategy, and what truly drives the dispute.

How can tools like Eperoto help bridge the gap between legal reasoning and financial analysis, bringing dispute resolution closer to the standards of decision-making seen in other business contexts?

Business-critical decisions in energy, pharmaceuticals, and corporate strategy have used quantitative decision analysis for decades. A pharmaceutical company wouldn't greenlight a $50M clinical trial based on phrases like "good chance of success" or "strong scientific rationale". They'd model probabilities, conditional outcomes, and expected value. Yet litigation decisions involving similar amounts often rely on purely that kind of qualitative language.

The gap isn't from a lack of judgment. It's that legal reasoning and financial decision-making speak different languages. Lawyers think in terms of arguments, precedents, and likelihoods. Funders think in terms of expected values, downside risk, and portfolio returns. Eperoto translates between these worlds.

Here's a concrete example: A law firm presents a case with "strong liability prospects" and "substantial damages potential." The investment committee sees an attractive headline but struggles to assess the risk. Using Eperoto, counsel maps the decision tree and reveals that while liability looks good at 70%, the real value driver is a secondary issue: whether a contractual damages cap applies. If the cap doesn't apply, a 40% likelihood, it would triple the recovery. The investment thesis becomes clear: this isn't a simple 70% bet on liability; it's a case where the upside scenario creates most of the expected value. That fundamentally changes how you price the funding, structure the terms, and think about settlement strategy.

This kind of insight can easily be buried in a narrative memo but obvious when properly structured.

Specifically, Eperoto enables:

1. A common analytical framework - When counsel says "we have a strong case but quantum is uncertain," Eperoto forces that assessment into a structure funders recognize: probability-weighted scenarios with costs, timing, and enforcement risk factored in. This isn't dumbing down legal analysis; it's making it actionable.

2. Proper treatment of uncertainty - In portfolio management, no one expects point estimates: they expect distributions, scenarios, and sensitivity analysis. Eperoto brings that same rigor to litigation assets, showing not just expected value but the shape of the risk distribution. What's the 10th percentile outcome? How sensitive is the return to different assumptions? This is standard practice in all other asset classes.

3. Defensible investment decisions - Just as a PE firm documents the assumptions behind an acquisition, funding decisions should have the same analytical discipline. Eperoto creates an audit trail showing why a deal was approved or a settlement accepted, based on structured analysis rather than gut feel. Critical for investment committee scrutiny and stakeholder confidence.

4. Portfolio-level insights over time - Applying decision analysis consistently across a portfolio creates compounding benefits. Funders develop better calibration of their judgment, identify patterns of cases that outperform or underperform expectations, and build institutional knowledge about what drives value. Over time, this disciplined approach strengthens underwriting quality and improves portfolio returns. Just like how data-driven decision-making in other industries creates feedback loops that enhance performance.

The result is that litigation funding can be managed with the same analytical rigor as any other alternative asset class. Lawyers retain their essential role as expert judgment-makers, but that judgment gets expressed in a framework that investment committees can understand, stress-test, and defend to stakeholders.

Lauren Harrison serves as a co-founder and managing partner of Signal Peak Partners. Named one of Lawdragon’s Global 100 Leaders in Litigation Finance, Ms. Harrison brings over 25 years of high stakes commercial litigation experience to her role as funder. Prior to co-founding Signal Peak, Ms Harrison served as a Vice President to Law Finance Group.

As a trial lawyer, Lauren was a partner at Vinson & Elkins and later at Jones Walker. She was recognized as a Texas Super Lawyer annually from 2009 to 2021, a Best Lawyer in America for Intellectual Property, Antitrust Law and Commercial Litigation, and a Top Woman Attorney. Chambers recognized Ms. Harrison for her Antitrust work. She was awarded a Pro Bono College of the State of Texas Award for her work on behalf of nonprofit art institutions.

Lauren is a frequent speaker at conferences and law schools, presenting recently at BU Law School, SMU Law School, the UH Law Center, the Institute for Energy Law, and LitFinCon.

Below is our LFJ Conversation with Lauren Harrison:

Litigation funding conferences are a great way to connect with our counterparts within the industry. They offer space to discuss innovation and to workshop best practices. We are fortunate that, for the most part, third party funders recognize that each of us fills a niche. Rather than competing in a zero sum game, we contribute to the evolution of a powerful litigation tool. That said, industry events can devolve into echo chambers. We wanted to create an event where our peers do not form a supermajority, and where we can listen with fresh ears to new ideas.  Our sector faces rising tides of interest in regulation, taxation and disclosure. The time is now to come together to address those issues, and in order to do that it is important to have the full range of stakeholders and policymakers present. 

Signal Peak was founded on values like honesty, alignment of interests, speed, and creativity, and you’ve framed litigation funding as helping plaintiffs ascend complex cases. How does the Symposium help reinforce your firm’s identity and commitment to transparency and partner-first funding?

Litigation finance events typically do not draw much interest from the market side - practicing litigators and their clients. A point of pride at Signal Peak is that we are trial lawyers for trial lawyers. We want to hear attorneys’ insights about how we can be of help and to enjoy a level of discourse that comes from having experience with the type of complex commercial disputes that we are sourcing and underwriting. We have a comfort level with the tools, timelines and techniques of the adversarial process that builds trust. In a guild profession that is guided by ethical and fiduciary bounds, shared experience is significant. We expect our event to highlight our foundational expertise, to promote collaboration, and to create new opportunities to better serve our market. 

We understand that every first chair lawyer is essentially the CEO of their case, and some of their core executive functions are accessing needed capital and deploying resources efficiently towards case conclusion. Because we have worn the shoes of the trial attorneys who participate in funding, we are focused on keeping their and their clients’ needs front and center.  While we will never look for case control or intercede in the attorney-client relationship, we do look for opportunities to partner with top lawyers in ways that help them manage case expenses and durational risk. We like to say that all boats rise on a rising tide. Signal Peak strives to align with lawyers’ and their clients’ interests so that everyone has sufficient back end interest to reach their goals.

Lee Godfrey and his partner the late Steve Susman developed the model that underlies Signal Peak’s business, and really our entire industry. We want to work with attorneys who are willing to invest in their cases just as we do, and Lee and Steve exemplified that with gusto. Lee was a personal friend and one of the great trial attorneys ever to set foot in a courtroom. Stories of his prowess are legion, and I do not want to steal anyone’s thunder by previewing them here. I will say that Lee’s voir dire was the stuff of legend, and his gentlemanly wittiness on cross examination will likely not be matched.

We are excited to showcase our team. Before Mani Walia and I decided to join forces, we knew that our values and interests were aligned, but we did not predict the extent to which Signal Peak would feel greater than the sum of its parts. We are eager for our colleagues Jackson Schaap and Carly Thompson-Peters to share the spotlight with us. We could not have accomplished so much in such a short time without their brilliant collaboration. I hope that our friends who join us in Houston on February 26 will get to see the alchemy that blends our team and will understand that when they work with Signal Peak, they will become part of a cohesive and nimble group.