Happy Friday! Another week, another MSO.
Investors and law firms alike are fascinated by managed service organizations. These structures take various forms, including the spinoff of non-legal functions of law firms to allow outside investment and the creation of entities to offer services directly to firms.
This week, I wrote about how litigation funder Certum Group acquired an MSO and will partner with mass tort and personal injury law firms to provide pre-litigation support. You might recall that Burford Capital said this summer it was exploring MSOs, and McDermott Will & Schulte said just last month it’s considering selling a stake in its firm to outside investors.
Trisha Rich, a partner at Holland & Knight who advises on MSO transactions, said since the Burford announcement, interest in MSOs has exploded. “We could tell it was going to get busy, but I don’t really think we predicted it would be like this,” she said.
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Is outside capital moving into the legal space in the same way it did with the medical field? Time will tell.
🔎 Mystery Funder Revealed
If you were still busy digesting your Thanksgiving turkey last Friday, you may have missed my story about how SCOTUSblog co-founder Tom Goldstein finally revealed the litigation funder he used to pay off personal expenses.
Goldstein was criminally indicted this year for wiring money from his law firm accounts to pay off high-stakes gambling debts and writing off the payments as business expenses. The indictment referenced an unidentified litigation funder that provided financing toward the purchase of a new home.
I’d always wondered who it was, and in an appeal last week, he finally dropped the name: New York-based Parabellum Capital. Parabellum is a major player in the litigation funding industry and one I’ve written about numerous times before.
Goldstein wrote in the appeal that the loan from Parabellum didn’t require him to use the funds for any particular purpose, so he used them to buy his home. I’ll be watching the docket to see if that’s true.
What I’m Reading
- Sources of capital are pulling back from the litigation finance industry, according to my colleague Gautam Naik. The challenging market has led some funders to suspend fundraising rounds or explore alternative paths to generate cash.
- My colleague Justin Henry wrote about how mass tort law firm Eleos Law asked a California federal court to halt the state’s prohibition on sharing legal fees with firms owned by non-lawyers. The complaint calls on the court to enjoin the state’s bar and attorney general from enforcing the “unconstitutional” California Assembly Bill 931, which prohibits lawyers in the state from sharing fees with firms outside the state that have non-lawyer owners.
- The Times of London wrote about a new report looking at public awareness of class actions in the UK. Among its findings, the report showed increasing support for the role of litigation funding and that people saw its value, provided that there is transparency, fair fees, and claimants can retain most of the compensation.
Leading the News
Bernstein Litowitz Spars With Ex-Partner Starting Rival Firm
A Manhattan lawyer’s exit from the prominent securities firm that challenged Elon Musk’s $55.8 billion dollar Tesla pay package has prompted a public war of words.
Wilson Sonsini Leader to Step Down After Decade-Plus at Helm
Wilson Sonsini Goodrich & Rosati tapped two partners to lead the firm as longtime Managing Partner Douglas Clark prepares to exit.
Former Top Prosecutor McNally Reflects on Move to Plaintiff Work
Joseph McNally grew up as a lawyer in the Los Angeles US attorney’s office. Now he’s one of the latest career prosecutors to leave it.
Fennemore Craig Merges With Texas Labor and Employment Firm
Fennemore Craig, a Phoenix-founded firm that has been expanding its footprint, has combined with Schmoyer Reinhard, a labor and employment firm based in San Antonio.
WATCH: What it Takes to Argue at SCOTUS
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Follow Roman Martinez of Latham & Watkins, a veteran Supreme Court advocate, as he argues on behalf of a girl with a disability who claims that her education rights were denied.
Featuring insights from former Solicitor General Elizabeth Prelogar, legal journalist Nina Totenberg, and other leading voices in the legal world, Supreme Advocacy reveals the strategy and pressure that defines American law. Read more and watch the full Bloomberg Law film on YouTube.
Commentary & Opinion
Case Law Stresses Chapter 11 Curbs on Legacy Litigation Exposure
With limited appellate guidance, the insurer exception in the Bankruptcy Code remains a case law driven area that restructuring practitioners should continue to watch closely.
Curiosity Beats Credentials When Advancing Law Firm Interviews
Most lawyers think interviews are about proving they’re qualified. They talk about their credentials, goals, and reasons for moving. But what partners really want to see is how a lawyer would work with them.
Federal Rules Changes Run the Gamut. Practitioners Must Take Note
Clients and practitioners should monitor efforts to amend the Federal Rules and anticipate how the changes might materialize in pending cases.
New York Virtual Evidence Courtroom Is a Model for Innovation
New York’s Commercial Division’s new virtual evidence courtroom is the latest effort to modernize trial practice and strengthen its reputation as a national model for business-court innovation.
KPMG AI Use Metric a Necessary Professional Services Wakeup Call
KPMG LLP’s decision to rate staff on their use of artificial intelligence tools in annual performance reviews is more than symbolic; it marks a structural shift in how professional services firms define performance and value. And this change is long overdue.
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