50%
of in-house and law firm lawyers expect budgets to shrink
“Covid has totally changed the way companies protect their budget.” - Head of litigation, Fortune 500 company
8 out of 10
law firm lawyers call legal finance essential for business development
"Anything to help reduce the cost burden on the client is welcome, especially in a recession." - Partner, Indian law firm
#1
factor in selecting a legal finance partner is reputation
"I would be willing to pay a premium to work with a trusted funder. I would need to have a lot of confidence in the company providing the financing."
- Vice president, Legal, privately held asset manager with over $3 billion annual revenue
Key research findings include:
In-house and law firm lawyers see the downturn as a springboard for change
- 67% agree they should prioritize long-term solutions over short-term fixes
- Roughly 75% of lawyers say that the impact of Covid-19 will allow them to rethink and improve past approaches to doing business
- In surveys, 70% of lawyers say that their companies and law firms are likely to use finance to offset recession impacts
In-house teams are ready to convert legal liabilities into assets to help generate revenue
- 61% of in-house lawyers are likely to pursue claims as plaintiffs through affirmative recovery programs to generate cash and offset legal costs in the downturn
- Over half say their company has abandoned meritorious claims due to cost
- 70% say their companies have unenforced judgments worth $20 million or more which could be monetized to generate cash
Law firm lawyers see legal finance as a tool to drive new business and stay competitive
- Law firm lawyers identify generating new business and competition as top challenges
- 79% of law firm lawyers say legal finance makes them more competitive in the market and 80% call it essential for business development
- In a possible nod to lessons learned from the last big downturn, 68% of law firm lawyers say their firms are likely to build or augment contingency practices
- Although this may overstate the rate at which law firms will adopt contingency and risk-based models, it recognizes their importance—and the urgency of firms’ growing understanding that they will need to make structural changes to the traditional law firm business model to stay competitive in the long term.
Finance is increasingly relevant to in-house and law firm needs
- Reported use of legal finance has grown by 105% since 2017
- 72% of lawyers say that legal finance capital allows companies and law firms to invest in growth and use capital efficiently
- The #1 factor in selecting a legal finance partner is reputation, followed by quality of available capital; cost is least likely to be cited