5 minutes with Burford's CFO Jordan Licht

What do CFOs need to know about legal finance?

Litigation is a non-core activity that is a drag on your earnings. You are not investing in the future; it is not your core competency. And that means that your marginal dollars should not go into paying for litigation expenses. Instead, those dollars should be put to work in your business—in a factory, R&D or hiring people.

CFOs need to know that legal finance can provide value, liquidity and certainty for their companies. Legal claims can be treated as assets, and legal finance can help CFOs pursue those claims without adding cost. Legal finance companies assume the cost of paying lawyers and legal expenses to pursue high-value claims in exchange for a portion of the proceeds when the claim is successful.

Legal finance capital is not debt or a loan, and CFOs can recover significant damages to the business without increasing costs. CFOs should explore legal finance as an alternative source of financing, especially in challenging economic climates.

Should CFOs get involved in a business’s decision to use legal finance?

CFOs should absolutely get involved in a business's decision to use legal finance. They are responsible for managing cash flow, budgeting and assessing the impact of litigation on the company. When the CFO goes to present his or her budget to the board, the CFO should feel equipped to speak about the availability of tools like legal finance to offset legal costs. CFOs should be aware of the tool and ask their GC to prove to them why they shouldn’t be using it.

Burford developed industry-standard best practices for valuing legal finance investments with input from the SEC. What’s the significance to clients using legal finance?

Our product is a partnership, and while we're passive in the investment, we are active with our advice. The real question is how do you know who to enter into a legal finance partnership with? Following a constructive dialogue with the SEC staff and our external auditors, Burford implemented a revised approach to fair value accounting for legal finance assets—we anticipate that this approach will become the legal finance industry standard.

The fact that Burford set the industry-standard is a stamp of approval that shows Burford as one of the inventors of the industry.

You should be partners with the leaders because we set the benchmark for the industry, whether that's the partnership we provide, the access to our funds or the access to our advice and information. Legal finance isn’t like getting a mortgage—you want to partner with a leader, and this is just another demonstration of our leadership.

What is the most rewarding part of your role at Burford?

I’ve only been here a year and a half, but the fact that we have been innovating around this asset class for 15 years and there are still innovations and partnerships that we can do is rewarding. If our clients let us in the door to have a conversation about what they’re trying to achieve and their objectives, we can be really creative to find a solution that’s a win-win for everyone.

5 things... most important things that you brought with you from Dallas to New York?

1. My pickup truck
2. 15 pairs of cowboy boots
3. My smoked brisket recipe
4. My two puppies
5. A desire to find the best TexMex place in New York