LFJ’s latest digital event featured Litigation Finance advisors Rebecca Berrebi (Founder and CEO, Avenue 33, LLC), Peter Petyt (Co-Founder, 4 Rivers Legal), Andrew Langhoff (Founder and Managing Director, Red Bridges Advisors), and moderator Ed Truant (Founder, Slingshot Capital). The panel discussed how they navigate between funders, law firms and claimants, as well as the challenges they face in this market, and the numerous benefits they provide each counter-party.
ET: Can you comment on some of the key changes you have seen in the litigation finance market since you got started?
RB: The number one biggest change is that there is so much more money out there than there used to be. In 2016, we rarely had competition on deals. There are so many funds out there that want to allocate capital. If you have a good case, or a portfolio of cases that has merit and a good chance of winning, there would be multiple funders out there looking to fund your case. That is primarily the change I have seen over the arch of my life in litigation finance.
PP: The change that I have seen over the last couple of years is the willingness and appetite for funders to provide capital in addition to what is necessary to run the case. What I have seen is the willingness and appetite for funders to provide working capital. That’s definitely been the development over the last couple of years.
ET: What do you believe is your greatest value add for your clients?
PP: It becomes clear that a very low amount of opportunities that are presented to funders are actually funded. It is in the low single digits. And I am very confident that I will achieve much better success rates than that. And I think it’s the approach that is the most important thing and value add here.
ET: Can you talk about your origination efforts and how you find opportunities?
AL: I have been lucky over the last five years being a broker and intermediary, cases and opportunities have found me. What I have found is referral and repeat business is really the best part of the origination process for me. The trick is to find lawyers who are entrepreneurial, who are very open to litigation finance.
RB: I am a lawyer by background. I have a pretty strong network from my whole career working at law firms and funds. And I do try to educate the market the best way I can. Frankly, I get a lot of hits that way by being out in the market and talking in the media.
ET: When a client comes to you, what are they looking for?
PP: I think in the vast majority of cases, plaintiffs may have never used litigation finance before. There is no doubt in my mind that law firms are the right people to go out and seek opportunities. I think we perform a valuable role here and I think plaintiffs know that. I think it is about managing processes, but adding value.
ET: What are some of the legal considerations as you take on a new client?
RB: You have to start thinking about confidentiality from the get-go. Disclosure with respect to privilege we have to be careful about. There are state-specific issues related to litigation finance that you have to be careful about, specific to disclosure.
ET: In terms of the intake, can you provide us an overview?
AL: I think it is far more effective to take all the information, organize it, mitigate any concerns and present it to the funder. Almost in a way that you are doing the funder’s work for them. Ideally, when I give them that memorandum, I know many funders will paste it into their investment committee memorandum. And that is that idea, I am trying to make it drop dead simple for them.
Click here to listen to the entire episode.
