The litigation funding industry is looking to expand into taking equity stakes in law firms, at least in the United Kingdom, according to a recent Law.com article.
“Litigation funders Burford Capital and Woodsford Litigation Funding told Law.com they intend to invest in U.K.-based firms that are allowed to have nonlawyer owners, something that remains against professional ethics in the United States,” said the report, Litigation Funders Planning a New Role: Law Firm Ownership.
Some litigation funders, though, believe that “taking ownership in law firms could put litigation funders at odds with the lawyers they seek to work with” and create other problems. Continued Law.com:
For now, these concerns don’t affect law firms in the United States, where the American Bar Association still restricts nonlawyer ownership. The ABA asked for comments on potential rule changes in April, and Burford’s CEO, Christopher Bogart, responded in favor of expanding law firm ownership to nonlawyers. A change is not widely anticipated, and the ABA declined to expand ownership rules the last time it reviewed the subject, in 2011.
But there are plenty of U.S.-based litigation funders that do business in the U.K., and those financiers may see the opening of the country’s financial markets as an opportunity.
The Law.com article is available here.