Litigation finance — sometimes called legal funding or law firm lending — is a form of specialty credit that provides capital to contingency-fee law firms. Unlike traditional bank loans that rely heavily on personal guarantees and real-estate collateral, litigation finance facilities are underwritten against the future value of a firm's case docket. This forward-looking approach allows firms to access working capital without pledging personal assets or taking on restrictive covenants that can hamper growth.
For plaintiff attorneys, the benefits are practical and immediate. Case expenses — expert witnesses, court reporters, medical records, travel — can run into the hundreds of thousands of dollars per matter. When a firm carries dozens or even hundreds of active cases simultaneously, the cumulative cash outlay can strain even a well-managed balance sheet. A properly structured credit facility lets the firm fund those expenses from a dedicated line of credit, preserving operating cash flow for payroll, marketing, and overhead.
The underwriting process typically begins with a confidential review of the firm's docket composition, historical revenue, and expense patterns. Reputable lenders will also evaluate the firm's management practices, malpractice-insurance history, and financial controls. At B.E. Blank & Company, this due-diligence process is designed to move quickly — often in less than five weeks from initial engagement to funding — so that firms can deploy capital when opportunities arise rather than months later.
Perhaps most importantly, litigation finance aligns the interests of the capital provider and the law firm. Because repayment is typically tied to case resolutions and revenue events, the lender succeeds only when the firm succeeds. This alignment creates a true partnership dynamic, distinguishing litigation finance from conventional lending relationships where rigid monthly payments can create cash-flow pressure at exactly the wrong time.
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