Litigation Budgets & Alternative Fees for Law Firms
In today’s market for legal services, law firms with greater capability to accommodate clients’ litigation budgets through alternative fee arrangements enjoy significant competitive advantages. Incorporation of litigation finance into your firm’s alternative fee strategy can enable you to capitalize on the upside of these engagements while minimizing the downside. Westfleet Advisors recognizes that all law firms have different management and business development issues and can help guide your firm to its most beneficial implementation of commercial litigation financing.
Win-Win for Your Firm: Contingent fee litigation engagements can be among the highest profit opportunities for law firms, however, these matters demand a rigorous approach to budgeting and project management and represent a real financial risk to the law firm. When structured and managed effectively, these alternative fee engagements should be a win-win—not only lucrative for your firm but also serving to forge or strengthen relationships with your valuable clients. However, often a client’s preference and the firm’s appetite for sharing risk are not in balance. Commercial litigation funding is a mechanism for bridging these types of disconnects.
Branding Opportunity: Demonstrating your firm’s agility and sensitivity to your clients’ business goals, alongside your partners’ expertise and reputations, is a branding opportunity for the firm. Law firms that offer litigation financing solutions to their clients can speak directly to the business needs of their clients. Resonating with clients in this way results in future litigation engagements with those same clients and a likely expansion of their companies’ services into the firm’s other practice areas.
Risk-Sharing: Commercial litigation finance enables your law firm to augment its capacity for risk-sharing and alternative fee litigation engagements. Therefore, acquiring substantive knowledge and useful resources in litigation finance represents a business development opportunity for the firm. Westfleet Advisors helps your pricing officers, legal marketing professionals, and law firm management to equip your litigation partners with essential knowledge about litigation financing, so that the firm can take full advantage of this emerging financial resource.
Acceptance of Contingent Fees: Not only can litigation finance help to facilitate alternative fee engagements as those opportunities arise, it also can serve to increase institutional acceptance of contingent fee (or hybrid contingency-hourly) engagements across the partnership. Utilization of litigation finance enables your law firm to gain the experience and discipline that contingency fee engagements require while a third party litigation funder shoulders most of the financial risk.
As such, litigation finance can be a tool, both directly and indirectly, for facilitating more widespread support for high-margin contingent fee engagements that are only feasible through highly competent litigation budgeting, pricing, and project management. Our list of frequently asked questions provides additional information about commercial litigation funding.
For a more detailed consultation, please contact us directly or call (615) 312-8255.