Patterson Authors "Above the Law" Article on Litigation Finance
Swanson, Martin & Bell, LLP partner William D. Patterson authored a recent "Above the Law" article on litigation finance and the three ways it changes an attorney's job. Prior to joining the firm, Patterson was general counsel of Business Logic where he oversaw a “bet-the-company” litigation and became deeply familiar with the litigation finance process.
To read Patterson's article, please visit this link or read below.
Three Ways Litigation Finance Changes Your Job: Inside & Out
Litigation finance is here to stay. Having worked as outside counsel, in-house and now as outside counsel again, I can confidently make that statement. There are three fundamental ways litigation finance changes your job, whether you’re inside or out.
Perhaps aside from predictive coding, I’m not sure there has been a more significant trend in litigation over the last five years. We will see more firms offering financing, especially as they continue to find new ways to help their clients.
Of course, changes in the legal landscape mean that you have to adjust your practice, here are three ways litigation finance is changing the game:
Litigation finance delivers MORE control
The biggest misconception is that bringing in outside funding, means you will lose control of the litigation. Like all investors, litigation funders use their money in a way that maximizes the likelihood of a high return. As good litigation financiers know, that means providing money for great lawyers to spend time on your case.
For both inside and outside counsel, financing lets you be far more strategic in how your time is spent. While budgets remain critical, proper litigation finance gives you ample resources to gather necessary information, file motions and dispute discovery shortcomings. The bottom line is once you’re financed, you spend less time finding ways to cut costs and more time focused on solving problems in the best possible way.
The old playbook is now old
If you make the strategic decisions, manage the litigation or advise those who do, remember that financed litigation is a response to strategies designed to run a plaintiff out of money. Also, to receive financing from a company like Lake Whillans, one must go through extensive due diligence, such as a litigation audit. Having an outside reviewer report back that the litigation has a high likelihood of success invigorates a board of directors. The likelihood that you will be negotiating against a plaintiff dealing with litigation fatigue drops tremendously.
This puts a high premium on quick, accurate case analysis by defense counsel. If liability is likely to be established and the plaintiff’s damages are significantly greater than the costs of litigation, resolving the case before litigation financing occurs may be in your client’s best interest.
The contract is key
Finally, more than ever, clients must carefully adhere to contracts where a breach can result in large damages, such as intellectual property agreements. In drafting agreements, make sure the terms are reasonable and are not easily breached by misguided employees. For in-house counsel, be sure your employees understand their contractual obligations. Now even small vendors have access to resources enabling them to catch breaches.
While that may increase your anxiety, here is the good news, it also increases the strength of your arguments that acting ethically is the only appropriate course of action. We all have a friend who was overruled because it was unlikely the company would be caught breaking a contract. IF this happens to you, remember litigation finance significantly increases the chances of being caught, use its existence to encourage your clients to remain ethical.
Originally appeared on "Above the Law"
To read Patterson's article, please visit this link or read below.
Three Ways Litigation Finance Changes Your Job: Inside & Out
Litigation finance is here to stay. Having worked as outside counsel, in-house and now as outside counsel again, I can confidently make that statement. There are three fundamental ways litigation finance changes your job, whether you’re inside or out.
Perhaps aside from predictive coding, I’m not sure there has been a more significant trend in litigation over the last five years. We will see more firms offering financing, especially as they continue to find new ways to help their clients.
Of course, changes in the legal landscape mean that you have to adjust your practice, here are three ways litigation finance is changing the game:
Litigation finance delivers MORE control
The biggest misconception is that bringing in outside funding, means you will lose control of the litigation. Like all investors, litigation funders use their money in a way that maximizes the likelihood of a high return. As good litigation financiers know, that means providing money for great lawyers to spend time on your case.
For both inside and outside counsel, financing lets you be far more strategic in how your time is spent. While budgets remain critical, proper litigation finance gives you ample resources to gather necessary information, file motions and dispute discovery shortcomings. The bottom line is once you’re financed, you spend less time finding ways to cut costs and more time focused on solving problems in the best possible way.
The old playbook is now old
If you make the strategic decisions, manage the litigation or advise those who do, remember that financed litigation is a response to strategies designed to run a plaintiff out of money. Also, to receive financing from a company like Lake Whillans, one must go through extensive due diligence, such as a litigation audit. Having an outside reviewer report back that the litigation has a high likelihood of success invigorates a board of directors. The likelihood that you will be negotiating against a plaintiff dealing with litigation fatigue drops tremendously.
This puts a high premium on quick, accurate case analysis by defense counsel. If liability is likely to be established and the plaintiff’s damages are significantly greater than the costs of litigation, resolving the case before litigation financing occurs may be in your client’s best interest.
The contract is key
Finally, more than ever, clients must carefully adhere to contracts where a breach can result in large damages, such as intellectual property agreements. In drafting agreements, make sure the terms are reasonable and are not easily breached by misguided employees. For in-house counsel, be sure your employees understand their contractual obligations. Now even small vendors have access to resources enabling them to catch breaches.
While that may increase your anxiety, here is the good news, it also increases the strength of your arguments that acting ethically is the only appropriate course of action. We all have a friend who was overruled because it was unlikely the company would be caught breaking a contract. IF this happens to you, remember litigation finance significantly increases the chances of being caught, use its existence to encourage your clients to remain ethical.
Originally appeared on "Above the Law"
