by Roy Strom
Finance has a long history of creative expansion. Financing lawsuits is proving to be no exception.
Since litigation finance hit the scene just a couple decades ago, the business has evolved from investing in single lawsuits to groups of claims to purchasing judgments at bankruptcy auctions, as Chicago-based Gerchen Keller Capital did earlier this year.
Now, some litigation finance firms are preparing for an even bigger change to their business model: Injecting cash directly into law firms in the form of an equity stake that isn’t tied to any specific case. Litigation funders Burford Capital and Woodsford Litigation Funding told Law.com they intend to invest in U.K.-based firms that are allowed to have nonlawyer owners, something that remains against professional ethics in the United States….