ABA Journal


Business of Law

Will litigation financing lead to ‘reversal of epic proportions’ in hard-hit legal market?

May 7, 2013, 10:45 am CDT


Borden is deluding himself. Aside from the ethical issues - and assuming this is even a plausible model - what happens when there is little to no recovery? It would be tantamount to another bad investment, lead to more litigation and further erode the public's confidence in the legal profession.

By Bamir on 2013 05 07, 12:20 pm CDT

Aw, HELL no. The legal profession will surely refuse to be patronized by some classist WASP on a horse.

By B. McLeod on 2013 05 07, 12:23 pm CDT

There's that damn word "epic" again.

Let's please all admit that as a culture, nothing that we are doing is "epic". "Tragic" and "puerile", perhaps, but not "epic".

By Hedgehog on 2013 05 07, 2:22 pm CDT

@1 Yes, thank you!

Third-party litigation financing: A disaster on so many levels.

"Borden notes a decline in BigLaw hiring, a drop in law school applications and a reduction in law grads, creating "a relative dearth of attorneys." = A win for America.

"The demand for legal services will inevitably turn to favor attorneys," Borden writes. "When that happens, the lack of attorneys in the pipeline will create a substantial shortage of qualified attorneys. For law firms to meet the new demand for legal services, they will have to aggressively recruit the top law graduates. To entice them to join their firms, law firms will have to raise starting salaries to unprecedented heights, creating a market reversal of epic proportions."

No, the answer is $20-$30 per hour lawyers from India and China appearing electronically. Sooner or later the legal profession will feel the invisible hand of Adam Smith, the self-regulating behavior of the marketplace. But for now the legal guild is protected by the ABA.

"The idea of markets automatically channeling self-interest toward socially desirable ends is a central justification for the laissez-faire economic philosophy, which lies behind neoclassical economics. In this sense, the central disagreement between economic ideologies can be viewed as a disagreement about how powerful the "invisible hand" is. In alternative models, forces which were nascent during Smith's life, such as large-scale industry, finance, and advertising, reduce its effectiveness..... Among the conditions that were assumed, and which have since fallen into question, are that information asymmetries, incentive distortions, and the failure of government regulators to serve as a check."

Unfortunately the American legal system will go on largely unfettered, until it collapses under its own weight, and risking the survival of our Nation too.

By litigation financing disaster on 2013 05 07, 3:29 pm CDT

@ 4 - I admire your attempt at parody, but it's pretty hard to top Kissinger winning the Peace Prize and you haven't.

By Pushkin on 2013 05 07, 3:56 pm CDT

@5, appreciate the compliment, to which I would add, it’s pretty hard to top Pres. Obama winning the Peace Prize, considering his policy of extra judicial done killings of Americans, and acknowledgment March 4, 2013 by AG Eric Holder to Sen. Paul by letter that the policy could include Americans in the United States.

Nonetheless, protecting the American legal guild is ultimately misguided policy. The admission of one’s mistakes is a sign of high intellect. So I admit the error of my improvident vote for the inexperienced Obama in 2008, which mistake I did not repeat in 2012.

By litigation financing disaster on 2013 05 07, 4:24 pm CDT

@5--Wouldn't you agree that Yasser Arafat winning the Peace Prize beats out Kissinger for ridiculousness?

By Peace of Work on 2013 05 07, 5:51 pm CDT

People take out loans to have over-the-top wedding ceremonies. Now they will be able to take out loans for over-the-top divorce litigation. OMG Thank you Wall street!!!

By Island Attorney on 2013 05 07, 10:11 pm CDT

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