Willkie and Longford Reach US $ 50 Million Litigation Funding Pact (1)


Willkie Farr & Gallagher is partnering with litigation finance firm Longford Capital to offer $ 50 million in funding to clients pursuing well-funded lawsuits, considered the largest publicly announced transaction between a major law firm and a litigation financier.

The money will be used to pay attorney’s fees and expenses in cases where Willkie’s clients request and Longford and Willkie agree the case is worth it. It could also be used to monetize claims or rewards that have not yet been paid. Typically, litigation financing arrangements include non-recourse loans that entitle a financier to a portion of the cash proceeds from a litigation.

Although the exact details of the deal are scarce, Willkie-Longford’s announcement is still a key indicator of how widespread litigation funding has become. Many large law firms use litigation funding, a roughly ten-year-old business in the US that has attracted more than $ 11 billion in capital, according to a survey this year. Longford itself has raised more than $ 1 billion since it was launched in 2014.

Still, law firms rarely discuss these relationships, and no firm the size or format of Willkie has publicly announced a partnership with a funder. Willkie had sales of $ 868 million in 2020, making it the 44th largest company in the US according to AmLaw data. Its equity partners earned an annual average of $ 3.5 million, making them one of the 20 richest companies by this metric.

Craig Martin, a high-profile litigation attorney who joined Willkie in Chicago last year as chairman of the Midwestern firm, led the deal with Longford, also based in Windy City. Martin has grown the firm’s Chicago office to nearly 45 attorneys. He said in an interview that his team of litigators spends about a third of their time representing large corporations and private equity firms as plaintiffs in patent, trade secret and commercial contract disputes.

Martin represented the manufacturer Olin Corp. in a case that resulted in a final judgment of nearly $ 50 million earlier this year after a decade-long dispute over environmental remediation obligations. He also won a federal bank lawsuit on behalf of an Aon plc investment arm accused of creating a pension fund for Foundation Resolution Corp.

The law firm will continue to represent its clients in such cases and will not take on any class actions on the plaintiff’s side, says Martin. The partnership with Longford aims to provide customers with more flexible payment options for legal services that go beyond the traditional billable hour, he said.

“We want to make sure we are at the forefront of innovation in the litigation market and provide our clients with everything they should be available, be it A-plus litigation service, A-plus appeal service or the best litigation Financing decisions, ”said Martin in an interview. “This is the space that we want to occupy for your most important affairs.”

Martin will join Longford’s Board of Independent Advisors separately. He will not be involved in considering potential investments in this role.

Firms have refused to admit that they have any relationship with funders, mainly out of fear that a defendant would use the information to search for documents that would be discovered. Burford Capital, a publicly traded litigation financier, said in 2016 it had reached an agreement with an unnamed law firm to invest up to $ 100 million in the firm’s cases.

Disclosing the funding of individual lawsuits is a hot topic. New Jersey federal court enacted a local rule this week compelling plaintiffs to disclose when they received financial assistance. This rule has been rejected by the litigation finance industry.

But judges have more often thwarted these efforts in individual cases, which, according to William Farrell Jr., co-founder and chief executive officer of Longford Capital, has alleviated companies’ concerns about being associated with donors.

“What we are seeing is that courts, both state and federal, do not allow litigants to step outside the traditional boundaries of investigation to get information about how a litigant pays for their attorneys,” Farrell said in one Interview.

The U.S. Chamber of Commerce, a critic of litigation funding, said disclosure should be required to avoid conflicts of interest or unethical fee-sharing with non-attorneys.

$ 1 billion a year

Litigation finance firms attracted more than $ 1 billion in new capital in 2020. However, it is unclear how many large law firms and their clients are actually turning to funders for cash.

A litigation funding brokerage firm Westfleet Advisors’ poll last year found that only 9% of so-called portfolio deals, where backers raise capital to support a number of law firms, are with the country’s 200 largest law firms. Large companies are much more likely to receive individual financing on the instructions of their customers, the survey shows. Of these one-off financings, 43% were in the 200 largest companies.

The new deal is likely seen as a coup for Longford, who attracted a prestigious law firm and a well-known trial attorney to give him a public stamp of approval – even if Martin and Farrell’s relationship goes on for much longer. Longford hired a Jenner & Block partner, Justin Maleson, as a director in 2018. Maleson had tried cases with Martin Farrell said he had known for “decades.”

Prior to founding Longford in 2014, Farrell was a Litigation Partner at Neal Gerber & Eisenberg, a medium-sized Chicago-based law firm.

“We believe that working with world-class, highly trained litigation attorneys is critical to our success,” said Farrell. “And just as important is the cooperation with the law firm partners that we know and whom we trust.”

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