Trending Now
  • ILFA Urges Government to Clarify Rather Than Rebuild the Opt-Out Collective Actions Regime

“Show Me the Money” – Diverse Teams are a Revenue Driver and Not Just the Right Thing to Do

By Molly Pease |

“Show Me the Money” – Diverse Teams are a Revenue Driver and Not Just the Right Thing to Do

The following article was contributed by Kirstine Rogers, Legal Director at Certum Group, and Molly Pease, Managing Director at Curiam Capital.

Both are also on the steering committee for Women of Litigation Finance (WOLF). WOLF is an organization intended to give women in and around the litigation finance field a space for support, mentorship and connections. WOLF holds quarterly zoom meetings focused on specific relevant topics and hosts various networking events throughout the year.  Please find out more through our LinkedIn page or by contacting any member of the steering committee. WOLF welcomes the support and participation of all industry members. 

—

As our country continues to debate the pros and cons of diversity, equity, and inclusion programs in the government and private sectors, the litigation finance industry would be well served by remembering that diverse teams make companies better.  Indeed, several studies have explored the link between diversity initiatives and increased profitability in organizations and found that a more diverse workforce can positively impact business performance, innovation, and profitability.

There are many reasons for this.  First, representation matters.  Whether it is getting a phone call for a potential new investment opportunity from a female general counsel who wants to see diversity in the team she might be working with or being able to hire top talent who want to work with a diverse team, better opportunities present themselves to litigation finance market participants when those firms present a diverse and capable team.  Second, a diverse team allows for more diverse networking opportunities, which encourages investment opportunities from a wide variety of sources.  And finally, and potentially most importantly, diversity of backgrounds, skills, and expertise allows for a risk assessment in underwriting investment opportunities that is less likely to miss potential risks or pitfalls that a more narrow-minded team might not see.  Better underwriting decisions result in better investments, which results in more revenue for the company.

Diversity need not be a mandate for it to be an intentional and profitable choice.

“If you build it, they will come.” 

Does your company reflect the world of your counterparty or their counsel?  

Research has shown that consumers are more likely to buy from or engage with businesses that appear to understand their specific needs, often through shared demographic traits like race, gender, or age.  Businesses that reflect their target consumers’ characteristics and values are more likely to foster trust and client loyalty.   The same is true in commercial transactions with counterparties and their counsel.  In entering into a funding agreement, you are forming a potentially long-term partnership.  Communication and trust are essential to the success of that relationship.  You only maximize the likelihood of that success with the diversity of the decision makers on your team.   

Companies with inclusive environments are also more likely to attract top talent and retain employees.  Why wouldn’t a firm cast the widest net possible?

“Nobody puts baby in a corner.” 

Having a diverse workforce also increases opportunities for connection and visibility in the market.  It provides a vehicle for commonality – a shared experience, history, or perspective.  This is because similar backgrounds make it easier to communicate, share common goals, and find mutual interests, which in turn can lead to individual career opportunities and company-wide growth.

Diversity-based industry groups like the Women of Litigation Finance (WOLF) facilitate interaction between market peers, provide leadership and speaking opportunities, and lead to collaboration between companies seeking to work together.  Bar associations also frequently have smaller diversity-based committees that provide a smaller community from which to network and form connections.  Bigger fish. Smaller pond.  Stronger bond.  And these genuine connections formed on shared experiences can lead to exponential networking growth.  A familiar face at one industry event only leads to more familiar faces at the next one.  

This is true for thought leadership too.  If every member of a panel of speakers looks the same and does not reflect the different faces in the audience, there are people in that audience your panel is not reaching.  If every article is written from the same perspective, there are readers who are not listening.  

“You’re gonna need a bigger boat.” 

At its core, the litigation finance industry assesses risk.  The better a firm can do that – whether it is a funder, a broker, or an insurer – the more profitable it will be.  Risk assessment involves seeing things that others might miss and making sure no stone gets left unturned.  

There are many components of a due diligence risk assessment, including reviewing the strength of the legal merits of the claims, assessing the credibility and testifying potential of key witnesses, and predicting what arguments or defenses will be presented by opposing counsel.  A diligence team with diverse backgrounds, experiences, and perspectives will be better at identifying risks and assessing the value of potential claims.  For example, a funder will often speak extensively with key witnesses to assess how they would present testimony at trial and whether a jury would find that testimony credible and persuasive.  If a trial team were conducting a mock jury to test these points, it would assemble a diverse panel of men and women from different ages and backgrounds to get various views on the testimony.  Similarly, a funder trying to make its own internal assessment will be better served by a diverse team with a variety of perspectives.  If everyone in the room has the same basic background, characteristics, and experiences, they are likely to see things similarly and thus miss key factors that could be important in determining the impact of the testimony.  And this is only one aspect of a risk assessment.  Each step of the diligence and risk assessment process would benefit from analysis by a diverse team.  The biggest concern in the litigation finance industry is that a funder, broker, or insurer misses a significant risk in their assessment of a legal asset and finds themselves funding an investment that has a low chance of success in hindsight.  A diverse team will protect against this outcome and therefore drive revenue for industry participants.

“You talkin’ to me?” 

At the end of the day, the value of meaningfully implemented diversity initiatives is clear.  Having the benefit of differing experiences and perspectives makes companies better.  And, as to litigation finance in particular, diversity without question strengthens the return on investments. 

But just having a diverse workforce does not necessarily result in a better company or improved profitability.  The company needs to foster an inclusive environment where diverse perspectives are valued and integrated into decision-making processes and where those selected as thought leaders demonstrate how diversity is implemented, prioritized, and integrated into company culture.

In honor of International Women’s Day, make this a call to action – what can you do at your company to ensure you have the broadest perspectives represented?  Ask yourself, does the panel you are sponsoring completely reflect your target client base?  Does your leadership team include those with different perspectives?  Does your company provide women with networking and mentoring opportunities? 

After all, diversity presents an opportunity for someone at your company to collaborate with other market participants to write an article just like this.  

About the authors:

Molly Pease is Managing Director and Chief Compliance Officer at Curiam Capital, and Kirstine Rogers is Legal Director at Certum Group. They both serve on the Steering Committee for WOLF, the Women of Litigation Finance.  They can be reached at molly.pease@curiam.com and krogers@certumgroup.com. 

About the author

Molly Pease

Molly Pease



About the author

Kirstine Rogers

Kirstine Rogers

Commercial

View All

Tax Guide Warns Plaintiffs to Settle Funding Tax Treatment Before Signing

A new practitioner guide warns that plaintiffs negotiating commercial litigation funding agreements face two distinct tax problems — one on receipt of the funder's advances, the other on collection of proceeds — and that both must be resolved in the document itself, because afterwards a claimant's options narrow considerably.

As reported by the National Law Review, authors Jonathan Friedland and Jeremy T. Waitzman use the example of a $1 million advance at closing to illustrate the front-end risk. While loan proceeds are generally excluded from gross income, most litigation funding is non-recourse, so repayment is contingent. In Novoselsky, the Tax Court held that upfront litigation support payments documented as non-recourse "loans" were not bona fide loans, were includable as prepaid income in the year of receipt, and sustained accuracy-related penalties. The court applied an unconditional-obligation-to-repay test alongside a multi-factor indebtedness analysis covering security, interest, fixed repayment schedules, ability to repay, and whether repayments were actually made. Novoselsky involved an attorney rather than a plaintiff, but the reasoning applies equally.

Industry practice, the authors write, is to structure advances as prepaid forward contracts or absolute assignments of a portion of anticipated proceeds, deferring tax until settlement — a more defensible path, though the IRS has not formally blessed the treatment. They also flag routing: advances paid to counsel versus to the plaintiff raise constructive receipt and anticipatory assignment of income issues. Their recommendation is to have the funder disburse fee advances directly to counsel under a separate fee-funding agreement to which the plaintiff is not a party, route operating-expense advances to the plaintiff, and specify recipient, purpose and tax reporting position for each tranche before execution rather than retrofitting afterward.

On the back end, the guide identifies a character mismatch: recoveries are typically ordinary income, while the funder's return may generate a capital loss capped at $3,000 a year for individuals, stranding it as a carryforward.

New Burford Quarterly Frames Law Firm Technology Spending as a Capital Allocation Question

Burford Capital has released a new issue of the Burford Quarterly, its journal of legal finance, arguing that the decisions law firms and corporate legal departments face on technology, growth and disputes are increasingly capital allocation decisions rather than operational ones.

As reported by Burford Capital, Vice Chair David Perla said that "capital is playing an increasingly important role in how both companies and law firms make decisions about the future," and that the issue examines how "a more commercial mindset is reshaping the business of law." The edition collects four pieces aimed at general counsel, law firm leadership and finance professionals evaluating how legal assets and legal spend sit on the balance sheet.

Managing Director Evan Meyerson opens with "The future of law firms is a capital question," positioning technology investment and expansion as competing claims on finite firm capital. A second article explains monetization, under which non-recourse capital accelerates part of an expected recovery from a pending claim while the claimholder retains control of the litigation and its upside. A third presents new Burford research produced in association with The Lawyer, "The economics of disputes: What UK GCs and law firms told us about litigation in 2026," in which cost emerged as the leading factor in deciding whether to pursue a dispute at all. The final piece, "Patents as capital: Asia's next chapter in IP monetization," looks at developments in Japan, South Korea and Taiwan.

The framing reflects a broader repositioning by the larger funders, which increasingly market themselves less as litigation financiers and more as providers of corporate capital that happens to be secured by legal claims.

CAT Approves £25 Opening Payout in Woodsford-Funded Car Delivery Charges Distribution

The Competition Appeal Tribunal has approved the distribution plan for the Woodsford-funded car delivery charges class action, setting a £25 payment for a class member's first vehicle in a deliberate attempt to drive engagement rather than to precisely mirror each individual's loss.

As reported by Legal Futures, consumers and businesses stand to receive up to £56 million of the £93 million in settlements reached so far, with costs, fees and disbursements accounting for a further £34 million. The damages pot comprises £34 million in guaranteed damages plus a further £22 million available if take-up is high enough; absent that, the additional sum may cover outstanding costs, pass to the Access to Justice Foundation, or revert to defendants that settled early. Distribution itself is expected to cost around £2.5 million. Payouts are set at £25 for a first vehicle, £5 for vehicles two through six, and at least £2.50 for each thereafter, with a potential further £2.50 depending on claim volume. Class members can take payment by bank transfer, Open Banking, PayPal, Nectar points, vouchers, or charitable donation.

Judge Hodge Malek KC said the plan "is not intended to operate as a mechanism for precisely reproducing the estimated loss suffered by each represented person," adding that the first-vehicle payment "is also intended to encourage represented persons to engage with the distribution process and submit claims." One defendant had argued payouts should open at £15 and called £25 a "windfall." The Tribunal pointed to the Stagecoach boundary fares settlement, where 1.4 million potentially eligible passengers claimed just £216,500 and almost £10 million went unclaimed.

Class representative Mark McLaren, who began the action in 2020 with funding from Woodsford and representation by Scott+Scott, said the team has "done everything we can to make this process as easy as possible for those affected." Five defendants have now settled a claim originally valued at around £150 million, covering 17 million new cars and vans sold or leased between October 2006 and September 2015.