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Key Takeaways from LFJ’s Virtual Town Hall: Spotlight on AI & Technology

By John Freund |

Key Takeaways from LFJ’s Virtual Town Hall: Spotlight on AI & Technology

On Thursday, February 27th, LFJ hosted a virtual town hall on AI and legal technology. The panel discussion featured Erik Bomans (EB), CEO of Deminor Recovery Services, Stewart Ackerly (SA), Director at Statera Capital, David Harper (DH), co-founder and CEO of Legal Intelligence, and Patrick Ip (PI), co-founder of Theo AI. The panel was hosted by Ted Farrell, founder of Litigation Funding Advisers.

Below are some key takeaways from the discussion:

Everyone reads about AI every day and how it’s disrupting this industry, being used here and being used there. So what I wanted to ask you all to talk about what is the use case for AI, specific to the litigation finance business?

PI: There are a couple of core use cases on our end that we hear folks use it for. One is a complementary approach to underwriting. So initial gut take as to what are potentially the case killers. So should I actually invest time in human underwriting to look at this case?

The second use case is a last check. So before we’re actually going into fund, obviously cases are fluid. They’re ever-evolving. They’re changing. So between the first pass and the last check, has anything changed that would stop us from actually doing the funding? And then the third more novel approach that we’ve gotten a lot of feedback

There are 270,000 new lawsuits filed a day. Generally speaking, in order to understand if this lawsuit has any merit, you have to read through all the cases. It’s very time consuming to do. Directionally, as an application, as an AI application, We can comb through all those documents. We can read all those emails. We can look through social and digest public information to say, hey, these are the cases that actually are most relevant to your fund. Instead of looking through 50 or 100 of these, these are the top 10 most relevant ones. And we send those to clients on a weekly basis. Interesting.

I don’t want you to give up your proprietary special sauce, but how are you all trying to leverage these tools to aid you and deliver the kind of returns that LPs want to see?

SA: We can make the most effective use of AI or other technologies – whether it’s at the very top of the funnel and what’s coming into the funnel, or whether it’s deeper down into the funnel of a case that we like – is that we try to find a way to leverage AI to complement our underwriting. We think about it a lot on the origination side just making us more efficient, letting us be able to sift through a larger number of cases more quickly and as effectively as if we had bodies to look through them all, but also to help us just find more cases that may be a potential fit.

In terms of kind of the data sources that you rely on. I think a question we always think about, especially for kind of early stage cases is, is there enough data available? For example, if there’s just a complaint on file, is that going to give you enough for AI to give you a meaningful result?

I think most of the people on this call would tell you duration is in a lot of ways the biggest risk that funders take. So what specific pieces of these cases is AI helping you drill down into, and how are you harnessing the leverage you can access with these tools?

DH: We, 18 months ago or so, in the beginning of our journey on this use case in law, were asked by a very, very big and very well respected personal injury business in the UK to help them make sense of 37,000 client files that they’d settled with insurers on non-fault motor accident.

And we ran some modeling. We created some data scientist assets, which were AI assets. And their view was, if we had more resources, we would do more of the following things. But we’re limited by the amount of people we’ve got and the amount we get per file to spend on delivering that file. So we developed some AI assets to investigate the nearly 40,000 cases, what the insurers across different jurisdictions and different circumstances settled on.

And we, in partnership with them, improved their settlement value by 8%. The impact that had on their EBITDA, etc. That’s on a firm level, right? That’s on a user case where a firm is actually using AI to perform a science task on their data to give them better predictive analysis. Because lawyers were erring on the side of caution. they would go on a lowball offer because of the impact of getting that wrong if it went to court after settlement. So I think for us, our conversations with financiers and law firms, alignment is key, right? So a funder wants to protect their capital and time – the longer things take, the longer your capital’s out, the potential lower returns.

AI can offer a lot of solutions for very specific problems and can be very useful and can reduce the cost of analyzing these cases, but predictive outcome analysis requires a lot of data. And so the problem is, where do you get the data from and how good is the data? How unstructured or structured are the data sets?

I think getting access to the data is one issue. The other one is the quality of the data, of course, that you put into the machine. If you put bad data in a machine, you might get some correlations, but what’s the relevance, right? And that’s the problem that we are facing.

So many cases are settled, you don’t know the outcome. And that’s why you still need the human component. We need doctors to train computers to analyze medical images. We need lawyers and people with litigation experience who can tell a computer whether this is a good case, whether this is a good settlement or a bad settlement. And in the end, if you don’t know it because it’s confidential, someone has to make a call on that. I’m afraid that’s what we have to do, right? Even one litigation fund or several litigation funders are not going to have enough data with settlements on the same type of claim to build a predictive analytical model on it.

And so you need to get massive amounts of data where some human elements, some coding is still going to be required, manual coding. And I think that’s a process that we’re going to have to go through.

You can view the full panel discussion here.

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John Freund

John Freund

Commercial

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CSAA Sees 2026 Shift in Litigation Finance Fight

By John Freund |

A senior legal executive at CSAA Insurance Group has signaled what she describes as a potential turning point in the long-running conflict between insurers and the litigation finance industry. Speaking amid heightened political and regulatory scrutiny of third-party funding, the comments reflect growing confidence among insurers that momentum is shifting in their favor after years of unsuccessful pushback.

An article in Insurance Business reports that CSAA’s chief legal officer argued that 2026 could mark a decisive phase in efforts to rein in litigation finance, citing increasing legislative interest and judicial awareness of the role funding plays in driving claim frequency and severity. According to the article, CSAA views litigation funding as a key contributor to social inflation, a term insurers use to describe the rising costs of claims driven by larger jury verdicts, expanded liability theories, and aggressive litigation tactics.

The executive pointed to a wave of proposed disclosure rules and transparency initiatives at both the state and federal levels as evidence that lawmakers are taking insurer concerns more seriously. These proposals generally seek to require plaintiffs to disclose whether a third-party funder has a financial interest in a case, a reform insurers argue is necessary to assess conflicts, settlement dynamics, and the true economics of litigation. While many of these measures remain contested, CSAA appears encouraged by what it sees as a shift in tone compared to previous years.

The article also highlights the broader industry context in which these comments were made. Insurers have increasingly framed litigation finance as a systemic risk rather than a niche practice, linking it to higher premiums, reduced coverage availability, and increased volatility in underwriting results. Litigation funders, for their part, continue to argue that funding expands access to justice and that disclosure mandates risk revealing sensitive strategy and privileged information.

Axiom Shuts Arizona Law Firm After Three-Year Experiment

By John Freund |

Axiom, the global legal talent and services provider, has decided to close its Arizona-based law firm, Axiom Advice & Counsel, marking the end of a high-profile experiment under the state’s alternative business structure regime. The move comes roughly three years after the firm launched, and reflects a broader strategic refocus rather than a regulatory intervention or disciplinary issue.

An article in Reuters reports that Axiom voluntarily chose to wind down the law firm as part of a reassessment of where it sees the greatest opportunity for growth. The firm plans to surrender its license, with the process subject to review by the Arizona Supreme Court, and indicated that the decision was made in 2025 following internal changes and departures at the firm. Axiom described the venture as a useful learning experience but ultimately one that no longer aligned with its core business priorities.

Axiom Advice & Counsel launched in early 2023 after Arizona became the first US state to permit non-lawyer ownership of law firms. The firm was positioned as a novel hybrid, combining Axiom’s flexible legal staffing model with direct legal services delivered through a licensed law firm. At launch, Axiom emphasized efficiency, technology enablement, and an alternative to the traditional law firm structure. However, by early 2025, key personnel had left the practice, and the firm concluded that operating a regulated law firm was not the optimal use of its resources.

The closure comes amid continued experimentation under Arizona’s ABS framework. Around 150 entities have been licensed, including legal services platforms such as LegalZoom and Rocket Lawyer, professional services providers like KPMG, and other alternative legal service providers testing new delivery models. While some have expanded their footprint, others, like Axiom, appear to be recalibrating their approach.

Omni Bridgeway Reports Strong 2Q26 Portfolio Performance

By John Freund |

Global litigation funder Omni Bridgeway has released a positive second quarter portfolio update, pointing to strong completion metrics and reinforcing confidence in its diversified funding strategy across jurisdictions and dispute types. The update highlights the importance of disciplined case selection and portfolio construction at a time when the legal funding market continues to mature and face closer scrutiny from investors.

An article in GlobeNewswire outlines that Omni Bridgeway recorded excellent completion outcomes during the quarter, with multiple matters reaching resolution and contributing to realizations. The company emphasized that these completions were achieved across different regions and segments of its portfolio, underscoring the benefits of geographic and claim diversification. Management noted that the results were consistent with internal expectations and supported the firm’s longer term return profile.

According to the update, Omni Bridgeway continues to focus on converting invested capital into realized proceeds, rather than simply growing commitments. The funder highlighted that completion metrics are a key indicator of portfolio health, as they reflect both successful case outcomes and effective timing of resolutions. Strong completions also provide liquidity that can be recycled into new opportunities, supporting sustainable growth without excessive balance sheet strain.

The update also touched on broader portfolio dynamics, including the ongoing mix of single case investments and portfolio arrangements with law firms and corporates. Omni Bridgeway reiterated that its underwriting approach remains cautious, with an emphasis on downside protection and realistic settlement expectations. While the company acknowledged that litigation timelines can be unpredictable, it expressed confidence that the current portfolio is well positioned to deliver value over the medium term.