On Sept. 10, The American Lawyer published an article written by Jon Campisi exploring the litigation finance industry’s maturation and its demand for thorough due diligence, financial modeling, and risk analysis alongside legal evaluation.
In looking at how the industry’s biggest players evaluate a case, GLS Capital was one of four funders featured, with Principal Jeffery Lula emphasizing the scale and rigor of the diligence process. Lula explained that funders must commit “a significant amount of money in a case,” sometimes upwards of $5 million, so assessing merit and risk from the outset is essential. Unlike intake staff at law firms, Lula notes, “You’re having me or one of my colleagues, all of whom are former Big Law trial lawyers, taking a look at the case.” This hands-on evaluation involves examining contract terms, damages projections, and evaluating whether a case can realistically reach a successful verdict. “You need to believe that a case can go to trial and win.”
Lula also framed litigation funding as a financial parallel to contingency fee work, particularly useful for firms not structured to shoulder that type of risk. “Litigation funding in some ways is a financial equivalent to contingency,” he said, adding that funders can diversify across a portfolio in ways that law firms cannot. He pushed back against the idea that funders control litigation, stressing that “commercial litigation funders don’t just step in and take control of cases… Funders tend to be very cautious about control and may not even get close to where the lines allow us to go.”
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