Who Wants To Own Big Law?

Why It Matters

Litigation finance unlocks capital for corporations and creates a new asset class, potentially reshaping law‑firm business models and corporate balance sheets.

Key Takeaways

• Litigation finance treats lawsuits as tradable, non‑recourse assets.
• Companies divert cash to legal fees, hurting EBITDA and shareholder value.
• Burford Capital provides upfront funding, letting firms avoid balance‑sheet strain.
• Investment decisions hinge on win probability, quantifiable damages, collectibility.
• Industry growth accelerated post‑2008 crisis, now multi‑billion‑dollar market.

Summary

The episode of Semaphore’s “Compound Interest” dives into litigation finance, featuring Burford Capital CEO Chris Bogard, who explains how the nascent industry turns lawsuits into investable assets.

Bogard describes litigation as an invisible balance‑sheet item that drains operating cash when corporations fund their own disputes. By providing non‑recourse capital, Burford lets companies keep cash for growth while law firms receive the cash they need without hourly billing constraints.

“I was a cost center,” Bogard recalls from his time as Time Warner’s general counsel, noting that a $10 million legal spend can shave $200 million off market value. He adds that successful investments require three pillars: legal merit, quantifiable damages, and collectibility.

The model, catalyzed by the 2008 financial crisis, has grown into a multi‑billion‑dollar market, attracting private‑equity‑style underwriting and prompting law firms to consider alternative financing structures, reshaping the economics of big‑law and corporate risk management.

Original Description

Chris Bogart spent years at Cravath before building Burford Capital into the world's largest litigation finance firm — turning lawsuits into investible assets. Liz and Rohan dig into the financialization of corporate fights, Burford’s $16 billion beef with Argentina, and what it would take to finally let private equity buy a piece of Big Law.

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This season of Compound Interest is in partnership with Amazon Business. Amazon Business is a trusted partner that transforms business buying by combining Amazon's vast selection, competitive pricing, and fast delivery with added tools and insights to help businesses simplify purchasing, manage spend, and buy smarter.