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UK Legal Industry Growth Slows As Covid-19 Impacts

The UK Legal Industry generated revenues of £9.34bn in the first calendar quarter of 2020, down 6.6% on the final quarter of 2019. And while there are usually falls between Q4 and Q1 due to seasonal factors, the drop this quarter was the highest in four years, a full one percentage point greater than the drop in the same period in the prior year. The final weeks of March cover the period when Covid-19 was beginning to impact the economy.

To put this in context, overall Q1 2020 UK Services Industries turnover was £53.49bn, down 7.6%. Both Legal and Services had however reached record highs in Q4 2019.

Legal Industry Woes 

Augusta recently published analysis of 40 of the UK’s leading law firms which shows that before the crisis hit, 55% had insufficient cash on their balance sheets to cover one month’s bills and 38% could not even fund one months’ staff salary’s from reserves.

Louis Young, Managing Director at leading litigation funder Augusta commented on the ONS data: “The Legal Industry in the UK had already started to see growth fall off before the pandemic hit. UK law firms have seen significant revenue falls since lockdown began, Q2 will unfortunately be well below past quarters. Many firms are seeking support for their businesses – the provision of finance from external sources will be incredibly important to their survival as time progresses.”

Andrew O’Connor, Investment Manager at Augusta and author of the law firm research said: “Before the crisis, Law firm’s lean approaches to cash management were hailed as improving operating efficiency. However this has also left balance sheets undercapitalised to deal with the prolonged financial shock that is currently unfolding”.

Louis Young and Andrew O’Connor are available for interview as required.

About The Augusta Research:

  • In May 2020, Augusta published research based on analysis of the top 40 UK LLPs published accounts.
  • Data on financial health and stability was analysed to identify potential issues.
  • The full research report is available on request.

About The ONS Data:

  • Office of National Statistics publishes regular data on the UK services industry – the Monthly Business Survey
  • The chart below shows UK turnover for Legal Services (JQ3O) by quarter since 2015.

    About Augusta Ventures:– Established in 2013, Augusta is the largest litigation and dispute funding institution in the UK by # cases. Augusta’s scale enables us to make decisions in market-leading timeframes and fund cases of any size.
    – Augusta is organised into specialist practice groups: Arbitration, Class Action, Competition, Consumer, Intellectual Property and Litigation, and sectors: Financial Services and Construction & Energy.
    – By the end of 2019, Augusta had funded 227 claims.  

    Contact:
    Leor Franks, Chief Marketing Officer, leor.franks@augustaventures.com, +44 20 3510 2100, www.augustaventures.com

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Announcements Consumer

Golden Pear Upsizes Corporate Note to $78.7M Amid Growth Plans

By John Freund |

Golden Pear Funding has extended and upsized its investment-grade corporate note to $78.7 million, further bolstering the firm's capacity to serve the expanding litigation finance sector. The New York-based funder, a national leader in both pre-settlement and medical receivables financing, said the proceeds will support working capital and fuel strategic growth initiatives.

A press release from Golden Pear outlines how the capital raise reflects continued investor confidence in the firm’s business model. CEO Gary Amos noted that the infusion is critical as Golden Pear seeks to scale alongside the “rapidly expanding litigation finance market.” CFO Daniel Amsellem added that the new funding aligns with the company’s capital allocation strategy, aimed at optimizing operational efficiency and executing strategic projects.

Brean Capital, LLC acted as the exclusive financial advisor and sole placement agent on the transaction.

Founded in 2008, Golden Pear has funded more than $1.1 billion to over 87,000 clients and remains one of the largest specialty finance companies in the U.S. Its business model spans legal case funding and medical receivables purchasing, with backing from a network of private equity partners that provide institutional support for continued expansion.

Announcements Regulatory Issues

LionFish Updates Model Documents in Response to CJC Report

By John Freund |

LionFish Litigation Finance Ltd has released a new suite of model litigation funding documents, updating its original set from February 2021. The revision comes on the heels of the Civil Justice Council's (CJC) Final Report on Litigation Funding, issued on 2 June 2025, which calls for a regulatory structure informed by best practices, including key principles published by the European Law Institute (ELI) in October 2024.

A LionFish press release details that the updated suite incorporates several of the ELI Principles (notably 4-12) and broader CJC recommendations, except where doing so would require legislative or procedural reform. LionFish's goal, according to Managing Director Tets Ishikawa, is not to dictate market norms but to foster industry-wide standardisation and efficiency. This proactive move is also intended to spark further collaboration between funders, insurers, and legal practitioners to develop trade practices akin to those in mature financial markets, such as those promoted by the Loan Market Association and the International Swaps and Derivatives Association.

The new suite includes three core documents: a litigation funding agreement, a priorities deed to define proceeds distribution, and an assignment deed for insurance benefits. Notably, LionFish has also added documentation for co-investment arrangements, reflecting a growing trend in syndicated funding deals. The funder has already closed seven such transactions.

Managing Director Tanya Lansky emphasised that while litigation funding remains complex, making documentation public enhances transparency and facilitates quicker deal closings—an essential factor for sustaining market growth.

As litigation finance continues to mature, this move by LionFish highlights a shift toward professionalisation and standardisation. With regulators increasingly focused on transparency and fairness, such initiatives may set a de facto benchmark for others in the industry. The question remains: will other funders follow suit, or will regulatory mandates be needed to compel alignment?

Announcements Commercial Legal Innovation

Backlit Capital Solutions Launches Legal Finance Consultancy

By John Freund |

Backlit Capital Solutions has announced the launch of its full-service legal finance consultancy. The firm aims to provide comprehensive funding solutions for legal claims, offering services that include litigation finance, arbitration funding, and judgment enforcement strategies.

An article in PR Newswire states that Backlit Capital Solutions is positioning itself as a comprehensive provider in the legal finance sector, aiming to serve a diverse clientele that includes claimants, law firms, lenders, and investors. The firm's service offerings encompass litigation finance, arbitration funding, and judgment enforcement strategies, indicating a broad approach to legal funding solutions.

The launch of Backlit Capital Solutions reflects a growing trend in the legal finance industry, where firms are expanding their services to address the multifaceted needs of legal claimants and their representatives. By offering a suite of services under one roof, Backlit Capital Solutions aims to streamline the funding process and provide tailored solutions to its clients.

As the legal finance landscape continues to evolve, the entry of firms like Backlit Capital Solutions underscores the increasing demand for specialized financial services in the legal sector. Their comprehensive approach may set a new standard for how legal finance consultancies operate, potentially influencing the strategies of existing and emerging players in the market.