A Way for General Counsel to Drive Shareholder Value

Progressive general counsel have adopted the view that their goal is the same as that of the CEO or CMO: to drive shareholder value. This is not simply a new way of managing the law department, but also a new understanding of the value of legal matters. Legal claims have become corporate assets that, like physical or financial assets, must be cultivated and protected and can be financed and monetized.

Litigation finance has given general counsel an option, allowing them to pursue strong legal claims without asking their organizations to absorb the entire cost and risk of litigation. By transferring the risk of a lawsuit to a financier that agrees to pay the costs of the lawsuit in exchange for a portion of any proceeds, general counsel can engage the lawyers of their choice and let them litigate without onerous billing constraints. They can choose which claims to pursue based on merit, and those claims will be decided on the strength of the claims — not on the parties’ financial wherewithal.

We are experiencing a change in commercial litigation. Truths that were once universal in business — deep pockets win lawsuits and in-house law departments are a necessary cost center — are becoming antiquated. Forward-thinking general counsel are relying upon the legal system to protect corporate assets and to recover funds to which their organizations are legally entitled. Litigation finance provides innovative general counsel a tool for remaking their law departments as valuable contributors to the bottom line.