There are new ways of funding organic growth using portfolio dispute funding. This applies where the firm has existing (and future) cases which are being run on a partial or full contingency basis, and allows the firm to unlock working capital, accelerate growth and drive competitiveness.
In a portfolio solution, the third-party funder’s investment and return are spread across a bundle of such claims. Importantly, because the finance is secured across a diversified portfolio, the levels of risk are lower and therefore the cost of the funding is reduced.
Portfolio funding has a number of advantages over bank loans and partner equity, because the financing is non-recourse, meaning that the funder gets a return only in the event of a success in the cases within the portfolio.
The financing can be used for any purpose, including funding acquisitions, investment in IT, recruitment and general working capital.
Our work usually involves assisting with the preparation of a detailed, integrated financial model covering cashflow, balance sheet and profit & loss, for the business as a whole; preparing an analysis of the current contingency/conditional fee book and a schedule of details of each type of claim (Commercial, Insolvency, Professional Negligence, Mass Torts etc), and negotiation with existing capital providers, before we conduct a formal process with the selected funders.