CPG leaders use legal finance to shift the cost of litigation fees and expenses and accelerate the value of pending claims and unenforced judgments. Legal finance is a solution for the unique challenges and risk management needs associated with these matters.
The latest report on Burford's business and trends in 2024 draws on 15 years of insights from financing leading businesses and law firms, illustrates how Fortune 500s are unlocking value and reducing risk in their legal departments and shows how law firms can build and sustain high value practice areas to fuel growth. Read excerpts from the 2024 Legal Finance Outlook below or read the full report at the right to learn more.
of consumer product executives surveyed by Deloitte identified decreased consumer willingness to pay higher prices
of businesses either have or intend to build a program to recover costs from their litigation and arbitration matters
A Fortune 50 business worked with Burford to secure over $325 million to expand its affirmative recovery program
The perception of the legal department as a cost center is shifting: 55% of businesses either have or intend to build a program to recover costs from their litigation and arbitration matters.2 That said, many businesses can do significantly more to extract value from these assets.
Law firms that invested in high value practice areas like litigation outperformed their peers last year,3 and there is every reason to believe that this trend will endure in a period of continued economic uncertainty. As always, law firms that are able to meet client needs—including meeting client expectations for risk-sharing—will benefit from sustained growth.
Below, we illustrate how Burford helped our business and law firm clients in 2023—and how we can meet their evolving needs in the future.
Litigation is unpredictable, and GCs face the difficulty of budgeting for matters that can take years to resolve; meanwhile, CFOs cannot rely on the timing or certainty of cashflows tied to successful outcomes. Novel funding structures can help legal teams offset these challenges.
Burford sees growing interest from legal and finance leaders in portfolio-based financing, where multiple matters can be financed in a single capital facility to create predictability across the litigation budget. Additionally, we see significant appetite to accelerate or “monetize” a portion of one or multiple pending claims, judgments or awards, increasing certainty and (because finance is non-recourse) de-risking matters.
While the entry point to using legal finance is almost always funding a single high value case, businesses that have experienced the benefits of financing often seek opportunities to extend its impact still further. One area of opportunity is the funding of affirmative recovery programs. More than half of legal and finance executives (55%) say their businesses either have an affirmative recovery program or intend to build one.4
As GCs and CFOs develop systematic programs for their affirmative litigation recoveries, legal finance from Burford is an important tool to manage their often substantial upfront costs. As a partner to businesses building such programs, Burford can help clients identify and prioritize high value claims as well as cover the costs of building and maintaining an affirmative recovery program.
For several years, a Fortune 500 company had devoted resources and an internal team to recovering damages through litigation, ultimately working with Burford to offset the costs for a group of claims in its portfolio. The deal was positively regarded not only inside the legal department but also won praise in the broader C-suite, especially from the company CFO.
When in 2023 the company faced a new capital need, the CFO contacted the legal department to see if the company’s high value litigation assets could be used to help craft a financing solution. The GC then approached Burford for financing through a monetization portfolio, using existing high value claims as collateral.
Burford provided a $325 million monetization facility to boost liquidity and augment the company's affirmative recovery efforts.
The deal, structured with more than $225 million upfront financing and a $100 million option, provided the company with financial flexibility and liquidity. Burford would only earn its return if there were successful resolutions within the portfolio, significantly de-risking the claims for the company.
With this deal, the legal department not only helped solve a liquidity need but also changed the dynamics between the GC and the CFO. What would typically be the CFO's problem became an opportunity for the GC to proactively deliver value to the business. This case highlights how legal departments can become value generators by implementing affirmative recovery programs and working with Burford to use affirmative claims from that program to enhance the company’s liquidity, improving the GCs standing with CFOs and benefiting their businesses.
Businesses have significant value hidden in their legal departments. Legal finance can offer holistic solutions for business across different sectors, reflecting their unique needs, risks and priorities when it comes to managing costs and generating value.
The simple but profound truth is this: Business leaders know how to make money by investing in their own businesses. Thus, spending on the business is unquestionably more impactful than spending on non-core litigation events with binary outcomes. When Burford funds a company’s disputes, that company conserves capital to invest in revenue generating activities. When we monetize a business’s expected entitlement from a pending litigation or arbitration, we unlock significant capital that becomes immediately available to invest in revenue generating activities.
Now in our 15th year, we look forward to helping more businesses use legal finance capital to unlock the value in their legal departments and reframe them from overhead to capital source.
Burford routinely works with Fortune 500 and FTSE 350 legal and finance teams to fund and monetize high value litigation and arbitration, enforce judgments and maximize corporate returns.
As the world’s largest legal finance provider, Burford has ample permanent capital to fund clients’ commercial litigation, arbitration and enforcement needs.
Top ranked in the industry with more than 160 staff, including 60 lawyers.
With litigation finance as well as enforcement expertise entirely inhouse, Burford can respond quickly and comprehensively to clients’ needs.
Burford is the gold standard for legal finance—dual-listed in New York and London (NYSE: BUR, LON: BUR).
Burford's experts can help businesses find value hidden in their legal departments. Reach out to our team to learn more or to discuss a potential financing opportunity.
Hong Kong
Emily Tillett
