Two major litigation finance companies say Arizona’s loosening of legal industry regulations opens the door for them to co-own law firms.
Burford Capital Ltd. and Longford Capital Management LP executives said that with Arizona no longer requiring lawyers to own firms—and other states considering similar steps—law partners will increasingly consider the benefits of non-attorney ownership stakes.
“Equity investors will start to take notice,” said William Farrell Jr., Longford’s co-founder and managing director, in an interview. “The first of those groups will likely be large-scale litigation funders like Longford Capital because we have the greatest relationships and insights into what makes law firms successful.”
Litigation finance ownership would be a radical shift in how firms are structured and run. Currently, the financiers pay for individual lawsuits—or tranches of them—with a profit goal if their parties win. But ownership would give the funders more say in how firms spend money and which cases they take.
