Upon graduating from law school, many students have the false impression that they can only choose between a handful of professions. Joining a corporate law firm or a senior chamber and taking competitive tests in fields like the judiciary and civil services are popular choices among law students.
However, in recent years, particularly following the startup boom and affordable internet access in India, there has been a profusion of viable job alternatives for law students. Legal journalism, political consulting, legal outsourcing, legal freelancing, etc. are a few of them. Litigation financing is emerging as another attractive career choice for law students, thanks to the rise of fintech and technology-driven legal services.
The demand analysis of the Global Litigation Funding Investment Market size was estimated to be worth approximately USD 12.2 billion in 2021 and is projected to reach approximately USD 25.8 billion by 2030, at a CAGR of 9% between 2022 and 2030, according to a market research study published by Custom Market Insights. The alternative asset class of litigation financing, which is expanding quickly, has generated a lot of interest recently. Many investors are still unaware of this highly specialized niche, but now due to its strong returns in both absolute and relative terms it is gaining immense popularity. Apex Litigation Finance, Augusta Ventures Ltd., Burford Capital LLC, Woodsford Litigation Finance Ltd., Omni Bridgeway, Harbour Litigation Funding Ltd., Demeanor, Balance Legal Capital LLP, and others are some of the well-known market players in the global litigation funding investment business.
The Indian legal financing market is also now gaining traction. With the increase in the cost of legal expenses in India, the demand for litigation funding is significantly increasing. The largest litigation and insolvency funder in India, LegalPay has funded more than 200 companies, from start-ups to established companies, for their litigation costs in the areas of logistics, healthcare, lending, and education. Through the innovative use of its own artificial intelligence algorithms and successful collaborations with five global litigation funders to finance cross-border lawsuits, it has quickly monopolized this market. There are also more rising small businesses in this industry.
As the demand for capital to finance lawsuit disputes grows, these litigation finance firms will need lawyers to examine cases for financing, client creation, outreach, and marketing. Due to its extreme nicheness, the litigation financing industry also offers a springboard for legal professionals interested in the commercial side of things. For lawyers who wish to study entrepreneurship and gain first-hand understanding of how a business operates, it is a fantastic career option. Although there is a significant demand for lawyers in this industry, it is essential for them to have certain soft business skills to jumpstart their careers.
1. Communication and negotiation Skills
One must be an effective communicator if one is operating as a lawyer in the litigation financing industry. One is expected to interact with a large number of lawyers, investors, and other stakeholders with whom they must speak to explain their products, services, and solutions. At times a lot of one-to-one negotiations might also be required with the stakeholders. This even necessitates a considerable deal of legal understanding as well as some fundamental finance expertise.
2. Legal Research, basic drafting and Analysis
The lawyer working in the legal funding industry is not expected to have a very in-depth understanding of procedural law, but they should have a basic concept of how the law, particularly civil law, operates as well as some of its intricacies. A basic understanding of drafting is usually helpful. The lawyer needs to be very skilled at legal analysis because many cases need to be underwritten in order to evaluate whether or not they can be won before funding can be decided upon.
3. Basic Understanding of Finance and investments.
Many of the solutions created for the litigation financing market demand a working knowledge of investing and basic finance. Since many investments are backed by legal debt assets, it may take a long time for the lawyer to develop new services or assess a case's viability without consulting the investment or finance team. A fundamental knowledge of finance will be very beneficial.
4. Legal content writing and basic marketing skills
In order to introduce a legal finance service to the market, the lawyer must not present a narrative that is either so basic that it loses credibility or so legal that a layperson cannot comprehend it. Perfect content balancing is necessary. Many times, complicated legal material needs to be communicated simply, which calls for some kind of marketing expertise.
Even though it is not a very common line of work, working in the litigation financing industry might be a fascinating alternative line of work for law students to investigate. This is particularly true for those who are interested in understanding the business of law or legal technology.
About the author: Mr. Kundan Shahi is the founder and CEO of LegalPay, India's first data-driven, and tech-enabled litigation funder and interim financier. Through LegalPay, Kundan and his team assist businesses to reduce all their burden of legal expenses through financing. LegalPay also offers interim finance to insolvent businesses, allowing them to continue operating as normal.