This week, I continue my written interview with John Garda of Longford Capital, regarding his experiences leaving a Biglaw partnership to join a leading litigation funder. Please see below for John’s answers to my second and third questions, focused on how clients and law firms can best position their matters to attract investment from litigation funders like Longford.
As usual, I have added some brief commentary to John’s answers below but have otherwise presented his answers as he provided them.
Gaston Kroub: How can clients, and not just law firms, take advantage of the opportunities presented by litigation finance?
John Garda: Longford Capital provides several funding options directly to our corporate clients. We are currently experiencing an increase in demand for our capital as the impact from the COVID-19 crisis continues to negatively impact individual companies and industries. In this uncertain and stressful landscape, our capital may provide a critical resource for businesses, and our industry continues to quickly evolve and innovate along the way to provide additional offerings. These offerings should prove especially useful in the current business climate. For example, in addition to traditional litigation funding of attorneys’ fees and expenses involved with bringing the claims, Longford Capital also provides a lump-sum catch-up payment to the business claim owner for attorneys’ fees and expenses that were previously incurred in the litigation before entering into a funding arrangement.
In addition, we are experiencing an increase in demand for ordinary working capital needs from businesses. As certain businesses struggle with short-term and long-term cash flow needs and other budgetary challenges, they can take advantage of the availability of our capital to overcome these challenges. We are now increasingly capable of stepping in and providing working capital to not only help these companies remain operational — but also to allow them to thrive — while also pursuing their legal claims.
Moreover, we are experiencing an increase in businesses wanting to monetize their existing legal claims before those claims are finally resolved in the underlying litigation. Many businesses want to take advantage of our available capital and recoup some of the losses in the form of cash now, not later. In the right circumstances, Longford Capital offers to pay the claim owner a portion of the claim’s perceived value up-front, so the company can earn a return at any stage of the litigation, including before even filing the claim, or after trial when a favorable judgment is currently pending on appeal.