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Top Law Firms Turn to Litigation Finance Companies to Fund Suits

Posted May 1, 2012 8:35 AM CDT
By Debra Cassens Weiss

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Litigation finance companies aren’t just bankrolling suits by small law firms and personal injury lawyers.

Some of the nation’s top law firms have introduced clients to such companies, the New York Times DealBook blog reports. Among them are Simpson Thacher & Bartlett, Latham & Watkins, Fulbright & Jaworski and Patton Boggs.

DealBook spoke to John Coffey, a former partner at Bernstein Litowitz who co-founded litigation finance company BlackRobe Capital. “We have been deluged with investment opportunities from my former colleagues,” Coffey said. “The typical call is from a top 25 law firm.”

Litigation financing can be lucrative. The largest company, Burford Capital, expects to make $32 million on nine cases resolved last year, a return of 91 percent, DealBook says. One of its cases involved a suit by a real estate developer claiming a rival tried to block one of its projects. The plaintiff’s lawyer was Simpson Thacher partner Barry Ostrager.

The plaintiff won a $110 million verdict, leading to a settlement. Burford could get $18 million for its $6 million investment, the story says.

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