Happy Friday! This week there was big news from one of the industry’s biggest funders.
Burford Capital said it’s pitching the idea of purchasing minority stakes in some US law firms. This is a big shift for the company in the US, but it’s a move they’ve already taken abroad. In 2020, Burford acquired a 32% equity stake in the UK law firm PCB Litigation.
Law firm ownership is a tricky subject in the US, where non-lawyers are typically prohibited from owning law firms. A few states have loosened restrictions on this, including Arizona and Utah, allowing “alternative business structures,” typically referred to as ABS.
Travis Lenkner, chief development officer at Burford, told me the funder is open to using an ABS but also may use “managed service organizations” or MSOs, which may work better for national law firms. In those instances, the firm is split in two to separate the legal work from the back office.
My colleague Justin Henry, who has covered non-lawyer investment in law firms, and joined me for our On The Merits podcast yesterday to discuss this. Listen Here
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What I’m Reading
Speaking of Burford, last Friday afternoon an appeals court ruled that Argentina didn’t need to hand over control of energy company YPF while it is appealing a judge’s $16 billion order.
The Insurance Journal explored the legality of MSO arrangements in writing about the Burford announcement. William Large, president of the Florida Justice Reform Institute found the idea “very troubling” and said it could “threaten the bedrock of America’s justice system.”
James Carter, who headed Trump’s tax team during the 2016-17 transition, wrote in the Daily Caller that the litigation financing measure should be included in Republicans’ next reconciliation bill.
The Artificial Lawyer wrote about how LegalZoom is offering patent filing through its Arizona alternative business structure. Its services will be significantly cheaper than hiring an IP lawyer.
Commentary & Opinion
Antitrust Probes of Classified Intel Require a Delicate Balance
Crowell & Moring’s Michelle Coleman and Lauren Fleming explain the best ways to approach handling an antitrust investigation requiring answers that are classified information.
Phantom Discount Claims Haunt CA Retailers, Sparking Settlements
Thompson Coburn attorneys explain how settlements in fake discount class action lawsuits in California should spur retailers to take precautions, including keeping records of previous prices.
Why Gen Z, Millennial Lawyers Are Leaving Big Law for Small Firms
Major, Lindsey & Africa partner Kate Reder Sheikh shares why smaller firms appeal to millennial and Gen Z attorneys practicing in Big Law.
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