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How do the best law firms stay ahead of the pack?

External counsels often face the question: ‘What do in-house lawyers really want from their external counsel?’ In-house teams act as gatekeepers who deliver legal advice to their colleagues in various practice areas around the clock. Due to the huge work volume, external counsel can become a significant ally in helping to alleviate work pressure, provide specialty advice, and improve efficiency. Therefore, what do we want and how can law firms become a trusted business partner?

Know your client

Care and attention to our business is crucial to firms’ success. There are many ways to understand the realities of our business, as well as the opportunities and challenges we face. For example, online research of company press releases, annual reports, and regular filings with government authorities, as well as regular meetings and networking events with in-house lawyers. However, secondments are one of the best methods. Through secondments, external lawyers work alongside in-house counsel, which gives them a first-hand view of the day-to-day work we do and builds a foundation of trust and familiarity that will extend well beyond the secondment.

External counsel should also take the initiative to keep us up-to-date on industry specific developments, as well as regulatory and market changes. Firm newsletters are useful, but often go unread because of other work pressures. Therefore, we would prefer innovative and targeted ways to keep us up-to-date, e.g. customised training programmes and regular contact with a relationship partner.

Value-added services are also always welcomed, such as conference/panel discussion invitations, marketing support, and making available useful tools developed or used by firms.

Be proactive

When we engage external counsel, we expect expertise in the relevant practice area. Therefore, when external lawyers work on a project, it is important for them to focus on the business objective, listen to our priorities, and deliver with timeliness and quality. We encourage external counsel to ask questions and consider the ‘big picture’ before jumping into legal research or providing advice. In addition, business objectives may evolve over time so we recommend that you engage with us throughout the process to ensure that everyone is ‘on the same page’.

However, don’t be overzealous and respect the internal protocol. External counsel are instructed by in-house counsel, so it is important to check with us before acting on discussions with business clients and always keep us ‘in the loop’.

Clear, concise, and practical

We want more than just a lawyer, we want an advisor. Firms often provide conservative legalistic reviews, with many options but no answer. We are seeking a more practical and commercial approach, that highlights the options and risks, but also provides a recommendation.

Presentation is also important. Your in-house contact does not generally have time to read a ten-page memo. Therefore, it is important to provide a clear and concise summary of the key findings, assumptions, risks, and recommendations at the front of any advice (or agreement drafted). If necessary, include the detailed analysis and other information as an attachment.

The real value of external counsel comes from their ability to understand and apply the law to facts, identify risks, and provide a solution that can be implemented.

Safe pair of hands

External counsel should be a safe pair of hands and the simplest things can often make the biggest difference, e.g. a brief acknowledgement that you have received our email and provide a timeframe when we can expect your response. In most circumstances, we can work within your timeframe. Therefore, be realistic, don’t ‘over promise’ and deliver on time, so that we can deliver on time to our internal clients. If there is a delay, let us know as soon as possible.

Costs are always a pressure point for in-house teams. We look for counsel that provide clear, transparent, reasonable, and innovative fee arrangements. To that end, we recommend that firms thoroughly review their invoices to ensure the work being invoiced is valuable, narrations are clear, and the fee arrangements and/or policies agreed are being followed. Reducing the time spent on invoicing issues will benefit both in-house and external counsels. Also, invest in relationships with in-house teams by not charging us the excess time spent by the junior attorneys so that they are not learning on our dime.

In-house teams have many competing demands. Therefore, the best way for external counsels to stay ahead of the pack is to partner with their in-house clients to help them deliver on their objectives. To achieve this, don’t be afraid to reach out and ask us for our thoughts. n

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Building a modern clerks’ room

On becoming sole senior clerk at Essex Court Chambers I reflected that as the Bar, and indeed the world, has modernised, so too has the role of the barrister’s clerk. What a complete transition it has been – from chambers comprising 15 barristers to sets now in the hundreds; low key business development has evolved into targeted global marketing initiatives and I am proud to have been at the spearhead of this progression.

I am passionate about the wellbeing and support of barristers and staff that work alongside me and, in an effort to increase client care and at the same time improve the clerks’ wellbeing, I implemented a significant restructuring project at Essex Court. This transition resulted in the clerks’ room growing from three clerking teams to four; and facilitated five internal and two external promotions. The result has been simply fantastic, with an immediate increase in productivity and huge appreciation from my team for the reduced, and flexible, working hours that I have put in place. I very much hope that these types of initiatives will be embraced by every set as an aid to improving work-life balance.

One of the great strengths of the Bar, and by extension, its clerks, is its adaptability. As clerks, we are proud of what we do and see ourselves as a stand-alone profession with a unique skillset. The development of those expansive skills guarantees sufficient intellectual stimulation to ensure a completely fulfilling career. At Essex Court we recognised that our clerks’ room is a reflection of chambers and to reinforce our ‘magic circle’ status have always been rigorous in identifying the highest calibre of candidate for any vacant position.

Graduates or school leavers?

Historically, clerks started their career when they left school at 16 and more often than not were drawn to the profession by family members and friends who were already in chambers. This is changing rapidly and now graduates are seeing clerking as a very attractive career path. When I first started to recruit graduates, one of the initial obstacles was ensuring they did not see clerking as a stepping stone to a career as a lawyer. I am pleased to report that as the role has progressed we face this issue less, especially as many colleges and universities are now promoting the profession as an alternative to becoming a lawyer. I am proud of the fact that a third of my clerks hold good degrees and, more importantly, that their degree is an asset to the room.

When writing this article, I discussed with several of my graduate clerks what they feel the benefit of having a degree is in our industry. The strong consensus is that a degree provides vital experience in working to deadlines, organisation, diary management, effective communication, content drafting, professionalism, interpersonal skills, juggling workloads, and has given them a work ethic standing them in good stead for a career within the clerks’ room.

That is not to say that I do not still appreciate the grit and endeavour of a young adult, fresh out of school, who is looking to make a mark on the world. The school leavers in my clerks’ room have been able to grow within the role and tailor their skills effectively to the specific requirements and attributes of a clerk, and the benefits of being able to mould their skills from the outset to suit chambers is very beneficial. Also speaking to them, they feel it is advantageous that from early on in their career they have not had a structured routine and understood the importance of flexibility and that no two days are the same, they have a drive to challenge themselves and expand their knowledge whilst on the job. I have also found that graduates who see clerking as a long-term role very much respect the abilities of traditional clerks and are keen to learn from those who came through the ranks.

Progression and responsibility

As I touched on earlier, the requirements of a clerk’s role have increased and the skillset required has expanded to include complex fee negotiation (often now with the clients, funders and other professional bodies), business development and compliance with ever-increasing regulation. The evolving legal landscape of people with different and sometimes competing interests – barristers, solicitors and support staff – means that a modern and forward-reaching clerks’ room is a must if you are to provide a seamless and client-friendly service.

Career progression is changing and where traditionally clerking roles began with several years of manual labour as a ‘junior clerk’ before opportunity was given to perform the wider functions of a ‘desk clerk’, we, as a profession through the Institute of Barristers’ Clerks, and internally here at Essex Court, are providing more and better training than ever before. We think the increased focus on training will enable junior clerks to progress up the ladder quicker, creating a fast-track to desk clerking.

During my restructure I was able to promote two graduates to the senior team from the junior clerks’ team, with less than 16 and 22 months in the job respectively. This was on the basis that more intensive internal and external training was available in their respective new roles, and their status as graduates meant we could rely on them already having the ability to withstand the intellectual rigours of clerking the complex practices of barristers. Traditionally we would have not considered such a promotion until completion of three years as a junior clerk.

I am not advocating that a modern clerks’ room should be made up entirely of grads: far from it. Simply that a modern clerks’ room must be diverse and armed with a full set of skills to better equip us in serving our clients and members in the ever-changing, ever-challenging landscape that is the modern Bar. We reflect and enhance the flexibility, responsiveness and creativity that is the strength of any successful chambers. Relationships with individual barristers and clients forged over an entire career should never be underestimated, no matter what your level of education.

Retaining talent

For those entering the profession now, it is also a much more attractive career choice for women. While discussing the recruitment of graduates generally, one thing the clerking profession can congratulate itself on is the rapid change to the gender demographic in our clerks’ rooms. However, it is important not to get complacent and at Essex Court, we have tried hard to look at the way we work to encourage the retention of our staff.

Solicitors firms have been way ahead of the Bar in terms of female- (and family-) friendly policies; but at Essex Court, we have not just looked at how we can encourage the recruitment and retention of female barristers, we have looked at how we can do the same for female clerks. We have put in place enhanced maternity policies and more flexible working practices, which we hope will reassure our female clerks that should they chose to combine a clerking career with raising a family, the level of practical support we can provide, both whilst on maternity leave and upon their return to chambers, should allow the right balance to be struck. I cannot speak for wider statistics in clerking, but in my clerks’ room we have a 60/40 split of men to women.

Market-leading clerks need to have a hunger for success and an insatiable appetite to achieve. Graduate or non-graduate starter clerks know that if they work hard, it will pay off and with the new makeup in our modern day clerks’ rooms this profession has a very exciting future ahead!

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The uncertain road to equity

In my experience, the biggest issue for anyone focused on making equity is the chronic lack of clarity from employers about what it takes to get there.

Not a week goes by without a salaried partner contacting me after being passed over for equity status, without explanation. In that kind of scenario, it is all too easy for that partner to conclude that they are simply not valued, that their practice area is not an investment priority, or that the firm simply does not want to dilute its PEP.

Naturally, many of these partners conclude that their only option is to move on – and in some, but not all cases, this is inarguably true.

That is a big issue for firms and one that can only be effectively solved by putting in place a framework of metrics and measures that can shed a little light on the journey to equity.

But for those embarking on the journey, which may last ten years plus these days, there is no time to wait. So, what can associates and junior partners aiming for equity do to navigate a way to the top?

Have a plan

One thing is for sure. This is not the kind of journey that anyone should embark on without a map. In this context, a map is a clear plan. It is no longer enough to work hard, get results, and wait your turn. Making equity these days requires a strategic career plan that is based on a clear understanding of your own talents and ambitions, and the landscape in which you operate.

In simple terms, making a plan boils down to asking yourself a series of searching questions:

1. Why do I want to make equity?

It might seem an easy question, but I am constantly amazed at the number of people who cannot answer it. Is it about status, influence, money, or something else?

For instance, if the motivation is purely money, then a lateral move to salaried partner in another firm can see salaries more than double. Similarly, if the motivation is influence then the firm you work at and its remuneration model must be considered.

2. How are my numbers?

It goes without saying that the step up to equity partner is contingent in no small part on billings and, therefore your contribution to the PEP.

So, take a close look at your numbers. What are your billable hours and how can you move up from a £1m biller to £2m+? Do you need to hire to create more leverage, better value your time, or look at how you blend your rates?

It is important to be honest here, no matter how comfortable you might feel in your current firm. If you cannot see a way to grow your billings as you aim for equity, it might be time to find a firm where you can.

3. Should I stay or should I go?

The final big question must be answered honestly and objectively, free from sentiments such as ‘I like the people’ and ‘I’m comfortable here’.

Given what you have considered about your motivations, numbers and skills – can you achieve your equity ambitions at your current firm? Do you have the time and support you need to increase your billings, are there opportunities to get involved in business development, cross-selling, leadership? Is my practice area a priority the firm is supporting with investment?

If the answer is ‘no’, then you need to decide what’s important – loyalty or ambition. If it is the latter, then a well-planned career move might be the only way forward.

Think about the remuneration model that might best suit you. Is it the traditional, lockstep, the individualistic eat what you kill or a more meritocratic hybrid model? Which is most likely to promote the working style and culture you can thrive in?

Start Early

In truth, these days it is not enough to think about career steps one at a time. Associates and newly appointed salaried partners should already be thinking about their routes to equity.

So, plan at least five years ahead and get specialist advice from someone with an overview of the whole market who can advise on the right steps to take – it is the surest way to avoid dead ends and make efficient, sure-footed steps towards a clearly defined equity goal.

Until law firms are transparent and honest about the journey to equity – and thereby fix the succession planning and structural issues the current situation creates – anything else is to trust to luck. And what self-respecting lawyer would do that? n

Definitive Consulting is a leading executive search firm focused solely on partner level appointments for law, accountancy, and consulting firms with offices in London, Dubai, Hong Kong, Singapore, Melbourne, and Sydney.

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Gracefully tooting your own horn to partnership

To give some background, please give us an overview of your career trajectories to this point?

Terra Reynolds: I started out in government and served for more than a decade as an assistant US attorney in the Northern District of Illinois, eventually becoming deputy chief. In that role, I tried more than a dozen federal criminal cases and led numerous complex investigations and I’ve briefed and argued matters before the US Court of Appeals for the Seventh Circuit. Before that, I clerked for Judge Marvin Aspen in the US District Court for the Northern District of Illinois. I recently became an adjunct professor of trial advocacy at my alma matter, Northwestern University School of Law. I joined Latham in July 2017, and am a member of our Women Enriching Business (WEB) committee, which helps create opportunities unique to women lawyers and to current and prospective women clients.

Eric R. Swibel: I’m a Latham lifer, though before I officially joined the firm, I clerked for Judge William C. O’Kelley in the US District Court for the Northern District of Georgia. I was promoted to partner in 2017 and beyond my role as Chicago litigation co-chair with Terra, I’m also part of the ethics committee and the legal professional and paralegal committee at Latham.

What are the areas of litigation you focus on?

TR: I’m a former federal prosecutor and in my white collar practice at Latham, I represents clients in white collar criminal defence, internal and government investigations, and complex litigation matters, particularly within the healthcare and life sciences industry. My clients include market-leading domestic healthcare companies, multinational pharmaceutical and medical device companies, and individual executives.

ES: I’m a securities and white collar defence litigator focusing on government investigations, shareholder litigation, and internal investigations. My clients have included public and private issuers, broker-dealers, investment advisers, private equity firms, hedge fund advisers, and officers and directors. I’ve also written and spoken to client and industry groups on developments in SEC whistleblower law.

What does being an office department chair at a firm like Latham & Watkins involve?

Both: I think for each person, and for each office, it is different based on priorities, preferences, and office culture. For us, we’re focused on mapping our vision of the future of our litigation practice in Chicago, and then tapping the resources around the firm to make that vision a reality. It’s given us an extra avenue to dialogue with our colleagues and discover that collective view.

One thing Latham does particularly well is identify the best lawyers for each matter, regardless of home office. We get to play a key part in that process by working closely with colleagues in Chicago and our counterparts in other offices to ensure our clients have the benefit of our deep expertise. That’s one of the great, unique things about Latham – the collaboration and coordination across hallways, across practices, across oceans. Everyone is open and willing to roll their sleeves up to help make projects happen, no matter how complex.

Do you anticipate your day-to-day will change as a result of your new responsibilities?

Both: Again, taking on the chair role creates an extra channel and more opportunities to hear directly from colleagues at all levels around the office and the firm globally about the factors driving their practices, how things are changing, how client demands are evolving, and how we can tap into and expand Latham’s capabilities to ensure we remain an innovative firm at the top of our game.

If you look back 15 years, is this something you would have predicted for yourself at this point in your career?

ES: 15 years ago, I was a server at Shaw’s Crab House in Chicago. I loved my job, and picked up a bunch of skills I use as a lawyer – understanding the basics of client service, multitasking, and keeping an even-keel in a fast-paced and sometimes stressful environment. I was about to start law school, and I hoped I’d have a rewarding career, but I can’t claim to have predicted that it would have unfolded exactly how it did. For better or worse, from my first day at Latham, I took a day-by-day approach. I prioritised opportunities to work with good people, and tried not to overthink the rest, and that’s the advice I give to junior lawyers.

TR: 15 years ago, I was a federal prosecutor in Chicago focused on investigating and prosecuting cases. I had a rewarding and fulfilling career, working collaboratively with my colleagues on complex and meaningful matters. While I could not have predicted it at the time, I am thrilled to be at Latham working collaboratively with an equally wonderful group of colleagues on complex and meaningful matters, and serving the litigation department in a leadership role.

It’s a highly competitive environment you’re in – at a top US law firm – what are the compromises you have to make in terms of work-life balance?

Both: It’s not necessarily just about law firm life, more so than it is being a busy professional in general. Latham is fantastic about allowing individuals to carve out the work-life balance that works for them personally. Yes, our first responsibility is to our clients, but our clients and Latham understand that we’re people with families. It’s great to have the space to figure out what works for us on an individual level, and to feel 100% supported. Everybody navigates it differently, and having the flexibility to do that is hugely helpful given how busy our matters can be.

What advice would you give to associates looking to make partner?

Both: Trust yourself and know when to ask questions. Of course, there’s a tension here, but it’s critical to trust your judgement and your ability to make valuable contributions. At the same time, be comfortable asking questions, and recognise what you still have to learn.

As with most careers, the path to success is about seizing opportunities and pursuing what you’re passionate about. If you want to take depositions, make it known to partners on your cases, and in your practice, and offer to help, often.

Get involved. Take part in, and volunteer for, committee activities and pro bono work. Show up to meetings – for the practices you’re interested in and even those adjacent to yours – you never know what you might discover! Ditto for local Bar associations and activities.

Be visible. Use the ‘extracurriculars’ to get on people’s radars. Pursue and take on speaking engagements, write client alerts and publish byline articles, all to start to build your brand in the market. And importantly, make sure you leverage that work and your case successes internally so your partnership can see all the great work you’re doing to create business prospects. It’s all about (gracefully) tooting your own horn.

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Where next for London as a disputes centre?

photo of london city

The first London International Disputes Week took place in May and successfully served to highlight why London is likely to remain a leading international disputes hub in the years to come – a huge concentration of talent across disputes disciplines, a favourable, popular and flexible legal system, the power of the English language, and much more.

What it also did was allow the disputes community to consider some of the very real threats to that leading position. While it’s not fair to suggest that London’s position as a key disputes hub is in grave danger, now more than ever it must not rest on its laurels, as other disputes hubs innovate quickly and seek to take advantage of Brexit.

The threat to London’s position from Brexit is often overblown, but it certainly isn’t to be overlooked. The now seemingly dead-in-the-water withdrawal agreement and political declaration do not even mention the UK’s and EU’s long-term relations where commercial disputes are concerned. This leaves open the question of whether UK jurisdiction agreements will be supported by EU or EFTA rules after Brexit, and whether those rules will guarantee the enforceability of UK judgments in Europe.

The immediate question is, will this uncertainty really affect parties’ willingness to choose London courts as the forum for their disputes? Whatever happens with Brexit, London’s greatest strength is that England has established itself as the leading commercial jurisdiction largely because of its highly evolved common law, which is not fundamentally affected by EU legal principles, and so won’t change.

Crucially, the choice of English law will also be unaffected by Brexit, since EU rules (which will be copied into the UK statute book) respect parties’ choice of law wherever that law originates. This is the principle of ‘universal application’ enshrined in the Rome Regulations. Once a party decides that it wants its rights and obligations to be defined and governed by English law, it is logical for it to choose English courts or arbitration too. London has a leading reputation in any event, based on the impartiality, commercial-mindedness and experience of its arbitrators and judges.

In a way, Brexit might even help. As long as the UK was part of the EU, its courts were not permitted to issue injunctions prohibiting litigation in other Member States in breach of a jurisdiction or arbitration clause. If the UK leaves the EU’s jurisdiction and enforcement regime, that will change. Parties have a right in common law to sue an offending party for loss caused by the breach, and litigation overseas will not usually stop an English court trying a case where the parties have given it exclusive jurisdiction.

Brexit is serving to focus the UK on becoming more competitive, not only in Europe but globally, as other international disputes hubs emerge and innovate in Asia and elsewhere. This is to some extent a matter of money. Litigation and arbitration in London come at a cost (albeit a reduced one thanks to the weak pound), and lawyers in competing jurisdictions were always ready to say that they could try disputes more cheaply. Now several EU jurisdictions are offering English language courts too.

To address this, the judiciary is making strenuous efforts to transform English court procedure so that costs are kept strictly under control. First, costs management was introduced by Lord Justice Jackson in 2013, and the disclosure/discovery of documents (the main driver of litigation costs) was reformed in January 2019, so that in many courts parties are forced to limit the documents they disclose (or ask to see) to those needed to resolve the specific issues in dispute. This mimics international arbitration, without losing the benefits of the distinctive English courts’ ‘cards on the table’ approach to documents and evidence generally.

The reforms have also given a boost to document review technology, which increasingly allows computers to take the strain of document review. And London also has a ready availability of third party funding for both litigation and arbitration which makes legal proceedings in England financially more manageable than before.

Money, however, is not everything. Choice, specialisation, and innovation are key. London has enhanced its reputation in this regard by setting up a Financial List – in effect a new court with the ability (among other things) to try test cases involving issues of general importance to the financial and other markets. Finally, the physical infrastructure of dispute resolution in London is being transformed, with the opening of the Rolls Building for high value and complex litigation eight years ago, and the state-of-the-art International Arbitration Centre opening earlier this year in the heart of London’s legal quarter.

These moves are a key bulwark against the challenge posed from elsewhere, with stiff competition coming from new international commercial courts in Singapore, Astana, and China. Other arbitration hubs are building their own impressive infrastructure too – the Seoul arbitration centre, which opened last year, is reportedly the largest in the world.

With China very focused on becoming the home of Belt and Road related disputes and the growing economies of the ASEAN region naturally looking to their near neighbours, London has to be competitive to pick up this new work. However, what London International Disputes Week should do is give London every confidence that it can continue to compete as long as it maintains its inherent advantages while continuing to evolve and develop at pace.

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Evolve or get swallowed up

photo of cocoon

The financial crash inevitably influenced the legal market and we saw, in the UK and the US particularly, a rise in law firms adapting to serve this changing landscape and increasing levels of banking litigation. Conflicts were one the biggest drivers behind the emergence of the boutiques – Magic Circle firms were not best placed to take on the big-ticket cases against the financial institutions. Similarly, many top-flight lawyers felt ready for a change having identified the gap in the market for quality representation in matters against institutions against which traditionally many of the big City firms had been unwilling to act.

Cooke, Young & Keidan LLP (CYK) was established in 2009 in the wake of the financial crisis as a boutique City firm specialising in complex, high-value disputes, usually with an international aspect. The founding partners, and indeed all subsequent CYK lawyers, are specialist dispute resolution lawyers. Given the year we established and our conflict-free model, it was perhaps inevitable that some of our first instructions should be large and often business-critical disputes with financial institutions. Early successes against household-name financial services defendants, and their similarly well-known legal advisors, led to CYK becoming known as one of the ‘go-to’ conflict-free firms for disputes of that type. Shortly after CYK was established, London saw a surge in home grown litigation boutiques to service this market. The ‘billion-dollar boutique’ Quinn Emanuel Urquhart & Sullivan from across the pond had of course launched in the UK just prior to CYK in 2008 and no doubt its success had an impact in terms of inspiring others into action.

However, inevitably, this banking litigation boom was not going to last forever. It was predictable that the flood of the most complex and ground-breaking post-crash financial litigation would subside. So, what next for the firms which set up with this specialism at their very core? Luckily, at CYK it was always our intention to offer expertise in a range of carefully chosen practice areas – not just banking litigation. We saw the drop-off of banking work as an opportunity rather than a threat – it gave us the space to develop the range of practice areas which we had always intended and within which our lawyers had always previously operated at their former firms – financial services litigation now accounts for less than a quarter of our case-load.

However, that transition was not necessarily easy and firms set-up to service the slew of banking litigation may have experienced difficulty adapting to changes in the market. Shifting perceptions takes a long time. Hiring big name lawyers from elsewhere can help give a new practice area a jump-start. Similarly, maintaining close referral relationships always helps – the conflict-free model is still needed in the legal marketplace, whether the case is against a bank or another multinational.

Another development helps boutiques stay competitive – artificial intelligence (AI). Technological changes mean a firm no longer needs volume on the ground when it comes to dealing with a complex piece of litigation which requires thousands of documents to be sifted through by a huge team – now it’s about the right technology to help with this and AI can do a job in just a few hours which used to take a large team days to complete.

Evolve or die, as the saying goes. In the boutique litigation world, it might be more of a case of evolve or get swallowed up – in the US particularly we’ve seen a number of litigation boutiques acquired by larger firms.

But what’s in store for the future of disputes? Our busiest practice areas point to the future – civil fraud, international arbitration, financial services regulatory, fintech, and company and partnership disputes. Again, looking to how the technology revolution is changing the legal market we certainly expect to see more cases which encompass an element of this. For example, we recently represented the Chinese claimant in CMOC v Persons Unknown – a high-profile commercial cyber-fraud case which is likely to assist future victims of fraud in seeking to recover stolen assets.

Still looking to the future, the appetite from lawyers keen to work for boutiques hasn’t abated which is not surprising given that there is an ever-increasing acceptance of the business model by the industry and clients. Boutiques often offer a different experience in terms of culture and personal development while still providing the opportunity to work on big-name cases and maintaining a good work-life balance. This has meant CYK has attracted excellent associates who are passionate about the business model and are as invested in the firm and its development and success as the founding partners.

Banking litigation may be dying but the boutique model is not. For firms like ours, which prefer to remain independent and have always planned for the evolving market and the number of banking-related disputes drying up, there is certainly space to grow and thrive.

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Knowing what clients want and what winds them up

Rebecca Priestly

As highlighted in previous issues of fivehundred, the backgrounds and experiences of chambers chief executives are broad and varied; they come from the traditional clerking ranks, the armed forces, the public sector, education, marketing and advertising, and, yes, the legal profession itself. Rebecca Priestley comes from the latter, but unlike her contemporaries she has held a role at every stage of the legal supply chain, giving her a unique insight into what lawyers of all stripes can and must do better.

Beginning her legal career as a barrister at 2 Gray’s Inn Square, Priestley practised employment and family law between 1994 and 2000 before cross-qualifying as a solicitor and joining Simmons & Simmons’ employment team in London. After another six years of private practice, she moved in-house, joining Standard Chartered Bank in 2006 as head of HR legal, managing the bank’s employment issues across Europe, the Americas, Asia, Africa, and the Middle East. Five years on, Priestley moved to Lloyds Banking Group where she spent eight years in various roles, first as head of HR legal and finally people director, employee relations and policy transformation.

In January 2019, Priestley’s career came full circle when she returned to the Bar as the new CEO of Outer Temple Chambers. UK Bar editor John van der Luit-Drummond sat down with Priestley to talk about her career to date, the evolution of the Bar, and her aspirations for chambers. John van der Luit-Drummond: Barrister, solicitor, in-house counsel – how has your journey through the legal professions and various businesses prepared you for your new role in chambers?

Rebecca Priestley: I’ve been fortunate to hold roles which have given me a very rounded view of legal services, a good perspective on what clients are looking for in legal advice, and an appreciation of the business context in which the advice plays out.

I have also been fortunate to work in a banking environment, which is having to change at an unprecedented pace to keep up with changing customer needs and behaviours, driven by digital disruption (‘The fourth industrial revolution’). Customer expectations are now influenced by Uber, Google, and Amazon, who provide immediate, seamless, and digital services. This digital disruption has brought about more change in the last decade to the way banking services are provided than we’ve seen in the previous 250 years. Continuing to provide banking services in the same way to customers is not an option.

Banks have had to adapt very quickly, transforming both the way they provide customer services and their internal ways of working and skill sets. Part of my role at Lloyds was to design people policies and promote positive employee relations to underpin this fundamental transformation.

JvdLD: How does your experience in the banking sector translate to the Bar?

RP: Working in banking focuses you on thinking about customers first and the ‘end-to-end customer experience’. This holds good in any professional services environment. For a barrister, being good on the day is now a given. What distinguishes and influences return instructions is your client’s entire experience from first interaction with chambers to follow up at the end of the case.

Solicitors rightly expect people skills as well as intellect – working well as part of a team is critical, as is the ability to read the room, manage clients well, and adapt to changing dynamics. If met with unresponsive, arrogant or unhelpful service at any point of that interaction, clients may simply move their custom elsewhere.

For the Bar, while the core offering of excellent advice and advocacy remains the same, the external environment to which those services are being supplied has changed significantly, influencing how clients expect to access, experience, and fund services.

JvdLD: In your LinkedIn bio you highlight having ‘a track record of implementing strategic organisational and cultural change, and fostering positive employee relations’. How is this likely to play in chambers, which is obviously very different from a law firm or bank?

RP: You’re right! A chambers is a world away from a FTSE 100 company with 70,000 employees. However, underpinning positive employee relations and culture in an organisation of any size is good, transparent communication, being clear about your common goals and values and what you stand for, working collaboratively to achieve results and fostering engagement and wellbeing, and a sense of collective pride in your brand and purpose. And also making sure people have some fun!

JvdLD: More and more chambers are embracing the CEO role. For this position, do you think having a legal background gives you an advantage over those without one?

RP: I wouldn’t go so far as to say that having a legal background is an advantage over those without such a background in the CEO role. There are some very successful chambers CEOs who don’t have a legal background. Having a strong customer-oriented approach and business development skills is key.

However, having practised myself, I certainly find it helpful as I can empathise with the challenges facing barristers. I also, I hope, have a fair appreciation of what users of legal services are looking for, and certainly what may wind them up. It also means you are fairly well networked within the legal profession and hopefully trusted to understand the issues clients may be facing in managing their practices and costs.

JvdLD: So, what do you think solicitors and barristers could be better at? What winds up clients?

RP: Businesses want certainty and to have clear commercial risk-based legal analysis and recommendations, rooted in an understanding of their business environment. Appreciating the potential financial, reputational, and practical consequences for your client of taking a certain course is important.

When you are presenting a legal issue for discussion and decision, to an executive committee or board, you need to be succinct. You will have a short slot in a busy agenda, and your presentation will be in a set format, with an executive summary.

In that context, a lengthy legal opinion, without a brief summary of the advice, options and recommendations, is not helpful. Solicitors and barristers could help in-house counsel by understanding their internal business and governance and asking clients how they want advice presented. That’s why secondments for barristers and solicitors can be helpful as an eye opener to the realities of the commercial world in which the advice is being given, and building a deeper understanding of your client’s business.

Pricing is also key. All clients, including FTSE 100s, have costs pressures and want clarity and certainty on costs as far as possible. Moving to more predictable, flexible, fee arrangements is definitely an ongoing trend.

Working with a strong team mentality is critical. I think chambers could market more around team and practice area capabilities, as against the individual. Strong personal relationships with your trusted legal advisers remains critical, but clients are also very open to being offered teams, particularly to support complex needs. Increasingly clients also rightly expect to be offered diverse teams in the provision of legal services.

JvdLD: What attracted you to return to chambers after almost two decades away?

RP: I have great admiration for the Bar and respect for barristers. The Bar has maintained its reputation for excellence and integrity at a time when many professions have suffered a crisis in public confidence. The independence of the Bar and its commitment to uphold the rule of law is a core pillar of our democracy, which is particularly important in our current turbulent times.

Being a barrister requires resilience, courage, and intelligence. Of all the things I have done in my career, appearing in court was the most daunting – no board room presentation comes close. It’s also a phenomenal training ground – having to marshal facts under pressure, and manage your case, client, opponent, the judge, and your nerves all in a day’s work.

I valued the opportunity to return to the Bar, being close to where law is being made, and look forward to using my experience over the last 20 years, in private practice and financial services, to support barristers discharging their important role.

JvdLD: How do you think the Bar has evolved since you were in practice?

RP: In some ways it has evolved, and in others the pace of change has been disappointingly slow.

On the positive side, I think the Bar has become more self-aware and commercial and recognised the need to adapt to changing client needs and a more competitive market. Some chambers have moved faster on this than others. One of the reasons I was attracted to Outer Temple Chambers is that it is progressive, innovative, and international. For example, OTC has opened offices in Dubai, Abu Dhabi, and New York.

Andrew Spink QC, one of our heads of chambers, is also chair of the Commercial Bar Association, and a justice in the Astana International Financial Centre in Kazakhstan which was officially launched last year and, like the DIFC and ADGM, affords opportunities for the Bar to advise and appear in international financial disputes in those forums. I also like the fact that Outer Temple also has a strong commitment to equality and diversity, with ‘blind’ recruitment practices, and Platinum Investor in People status.

JvdLD: That’s the positive. What about the negative?

RP: Where the pace of change has been disappointingly slow, is on diversity. On gender diversity, only 16% of silks are female. I think this needs a raft of measures and cultural change to shift the dial. I also think the Bar should set a target for female silks – I’d like to see 50% by 2025. I think if individual chambers made diversity a core business issue – rather than a side ‘HR’ issue – and set a target for female and BAME silks with a deadline, this would help shift the dial.

Setting a target is an important statement of intent and prioritisation, and what gets measured tends to get done. The target is tracked and measures are put in place to support career progression. This would reflect what happened in the City.

Helen Morrissey’s established the 30% Club in 2010, with a target to reach 30% gender diversity on FTSE 100 boards, which was met by 2018. Critical to this success was that boards made gender diversity a business priority, recognising that diversity positively impacts decision making and profitability. It makes business sense for your workforce to mirror your client base and increasingly in-house counsel and solicitors expect chambers to present diverse barrister panels.

JvdLD: What practical advice would you give to women looking to progress at the Bar?

RP: Be confident in your abilities and know your value and worth and expect support from your chambers and clerking team to help structure and plan your career progression.

Recognise that your career is a marathon not a sprint. Careers are getting longer and in the future people will change careers far more often. In the workplace more broadly, something like 40% of today’s jobs won’t exist in 2035, driven by digital disruption. Coming to the Bar after a career break or doing other jobs is often very beneficial-giving you a broader skill set and perspective. The good thing now is that there is plenty of time to flex what you do and when you may want to push for silk.

At Outer Temple we recognise that there is considerable scope to structure careers so that, for example, you may not want to be in court five days a week when you have young children, but you may be happy to ramp this up when they are older and in the run up to a silk application.

In addition, choose the right partner – look at Ruth Bader Ginsberg! Take care of your own health and wellbeing, and be kind to yourself. Quiet the inner self critic – we’re often our own worst critics; and have a strong friendship group and support other women. Madeleine Albright was quite right in saying there is a special place reserved in hell for women who don’t support other women!

In addition to the practical measures which chambers can put in place to help support women’s progress – mentoring, career breaks if needed, structured career planning – we are beginning to see cultural change in a gradual move towards greater equality in child care, underpinned by shared parental leave policies. The more mothers and fathers share responsibility for child care, the healthier an environment we create for both men and women and the more we decrease the adverse impact on women of shouldering all the responsibility for children’s care.

JvdLD: You’re also a non-executive director of the City Mental Health Alliance, a collection of FTSE 100 financial services companies and Magic Circle law firms, established to promote wellbeing in the City and breakdown stigma around mental ill health. What can the Bar do to promote better wellbeing?

RP: We all have mental health in the same way we all have physical health. One in four of us will be affected by poor mental health at some point in our lives. The chances of us being affected or a member of our family is statistically very high. While some of us may have a condition we manage, others may find our mental health impacted adversely at times, whether it’s by work-related stress, or life events such as bereavement, divorce, or the mental or physical ill health of our loved ones.

The Bar is in many ways behind the City in support and openness around mental health. This is perhaps not surprising. Working long hours, often in isolation and under considerable pressure in an ‘always on’ digital environment clearly makes you vulnerable to poor mental health. Being self- employed and feeling you are instructed for your personal resilience as well as your intellect means those whose mental health is under threat may be less likely to be open about it or to seek help, and chambers may not have the infrastructure in place to help.

I think the Bar is addressing this issue, and a lot of great work has been done by the Bar Council, but more is needed, particularly to encourage openness and destigmatise mental ill health. This will take some courageous senior barristers to act as strong role models by speaking up about their mental health, how they sought help, and the fact it was not career ending.

This is absolutely not about asking everyone to bare their soul. I fully appreciate the desire for privacy. However, it is important to break down stigma and encourage openness and self-help. We know suicide is the biggest killer of men under 50, and if some senior male leaders take this brave step it will encourage others to know they can feel safe in reaching out for help when they need it.

JvdLD: What will you do at Outer Temple to promote better wellbeing?

RP: Within chambers, there is positive feeling about wellbeing as it is a friendly supportive set and people feel able to talk to colleagues when they feel under stress. However, I do want to put in place mental health champions who have been on the Mental Health First Aid training and can act as confidantes when people want a safe conversation and access support.

I am also looking at getting in speakers on sleep (often the bellwether of good mental health) and to see if we can run some yoga classes. I’m even considering yoga talks – legal update seminars followed by yoga!

JvdLD: Finally, what is your vision for the future of Outer Temple?

RP: I am very ambitious for chambers, and excited about our future. It’s a large set, with 86 barristers and 24 silks, and highly ranked in a range of specialist practice areas. It has a wealth of talented, professional, and personable people, working with a very strong customer-focused ethic, and culture of consistent improvement. I want to help build the business, including internationally and enhance our profile and market recognition, as an innovative and modern top-tier set, famous for its customer service and helping deliver constructive legal solutions.

I’ve been out meeting our clients over the last few months, and it’s been great hearing their feedback about chambers. Common themes are that we are professional, personable, modern, and progressive. Key to this is our clerks’ and barristers’ ability to be adaptable, agile, and responsive, and to operate as part of their legal team. They also value our barristers’ ability to read a conference room as well as a court room, to interact with clients well and to adapt quickly to changing dynamics.

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Don’t be afraid of ‘coming out’

illustration of opening curtains to rainbow

How would you rate the legal profession on LGBT+ inclusion? What more needs to be done?

We have made enormous strides on rights for and attitudes towards LGBT+ people over recent years and I feel incredibly lucky to be living in the UK at this time. But challenges remain. A random sample might include:

  • outright (and ongoing) disdain from some people of faith (and I say this as a committed Christian myself);
  • queries about my sense of humour (or not) when I tackle out of order banter;
  • inaccurate assumptions – about all manner of things; and
  • open aggression, even from members of my own profession, including by way of online comments on articles such as this.

Also, what many people don’t realise is that coming out isn’t a ‘one off’ occasion. When I meet new colleagues or clients, it is natural to get asked questions about my non-work life, from neutral questions such as ‘what did you do over the weekend?’, through to more loaded ones about the occupation of my fictional wife. This means I, along with the vast majority of LGBT+ people, have to make considered decisions on a daily basis of whether to ‘come out’ or not.

I think this is especially difficult for LGBT+ people entering the workplace for the first time. Many LGBT+ people come out at university, but a staggering 60% go back into the closet when they start their careers. I believe employers and the profession have a responsibility for creating workplaces where everyone can be themselves. Not only is this morally the right thing to do, but evidence demonstrates that this makes commercial sense too.

Being open and authentic at work means you’ll be more productive, loyal to your employer, and better able to serve your clients. I have found that being open with my clients about my sexual orientation has almost always resulted in better and more open working relationships.

I am hugely positive about the outlook for the industry. Indeed, Stonewall’s list of Top 100 Employers indicates that the legal profession is, in many ways, leading the pack. We should, however, not be complacent about remaining challenges. The Law Society’s LGBT+ Lawyers Committee are committed to delivering initiatives aimed at supporting LGBT+ solicitors nationwide, targeting those who often still feel marginalised and isolated.

I also think the issue of intersectionality remains central. LGBT+ people of colour, those from working class backgrounds, or those with disabilities may experience compounded challenges and inequality. As a profession, we should actively seek their voices and work to support them.

In addition, there is much more work to be done in ensuring that diverse voices from within the LGBT+ community, including those who identify as trans and non-binary, are heard and represented in the profession. Happily, we are up for the challenge.

How can law firms create more LGBT+ inclusive workplaces?

The vast majority of major law firms will have LGBT+ inclusive policies and procedures. The best ones will be translating these into tangible actions. Doing the right thing is vastly more powerful and just saying it. This will vary across different firms, but at Travers Smith we have done this in a number of ways; from delivering training session on LGBT+ inclusive language to implementing an innovative mentoring programme for LGBT+ students in partnership with the charity Just Like Us. Staff and partner engagement is crucial – creating an LGBT+ inclusive workplace is not solely the responsibility of LGBT+ people. To engage with non-LGBT+ people working at the firm, we rolled out a Rainbow Laces campaign to encourage our various sports teams to ‘lace up for equality’ and signal their support for LGBT+ inclusion. The laces, and the initiative itself, have proved especially popular and have been embraced not only by colleagues, but also by many of their friends and families, as well as children in their own local sports clubs, teams and schools. A simple, yet effective way of engaging with a broad audience and in raising awareness of LGBT+ matters.

There are plenty of other examples of good practice on the LGBT+ Lawyers Division website and LinkedIn page.

You mentioned the trans community earlier. What progress has been made there in regards inclusivity?

Great progress has been made across the UK in terms of LGB inclusion. However, many laws and systems which were amended or implemented have not recognised or accommodated trans communities – particularly relating to health and social care, marriage, families and gender recognition.

Barriers to full inclusion, and a lack of awareness of the lived experiences of trans people can lead to verbal, physical, and psychological abuse, as well as discrimination in many walks of life. For example, almost half (48%) of trans people in Britain have attempted suicide at least once; 84% have thought about it. Two in five (41%) trans people have been attacked or threatened with violence in the last five years. Some 62% have experienced harassment from strangers in public places.

A report published by Stonewall indicated that two in five trans people (41%) and three in ten non-binary people (31%) have experienced a hate crime or incident because of their gender identity in the last 12 months. Even more worryingly, Stonewall’s research on trans inclusion in schools shows that four in five young trans people have self-harmed, and nearly half of have attempted to take their own life.

We are also seeing an increasing number of people identifying as trans, and feeling more comfortable in expressing themselves in ways other than simply male or female. A recent University of Oxford survey showed that 22% of undergraduate students identify as LGB or T. At firm event last year for LGBT+ students, over a quarter of identified as trans. To ensure we remain an attractive employer, and are able to effectively engage with an emerging generation, we need to be inclusive in our approach to gender identity.

Like any approach to creating a more inclusive culture, being trans inclusive involves examining policies and practices across a number of areas. In consultation with trans inclusion experts, and members of the trans community, we recently reviewed the trans inclusive nature of all our workplace policies, including dress code and use of toilet facilities, and drafted a series of good practice guides and manager toolkits on supporting trans staff and partners.

To help raise awareness of trans inclusion, and of issues which can face trans people working in the legal sector, we have also held a series of firm-wide events and seminars, including some in partnership with The Law Society’s LGBT+ Division to ensure we are reaching as wide and diverse an audience as possible.

For those interested in engaging with The Law Society on LGBT+ inclusion, membership of the LGBT+ Lawyers Division is free and open to all solicitors and their allies. You can read more by clicking the link below

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Latham & Watkins and Kirkland & Ellis lead the pack

Chalk up another completed guide. Now in our 12th year covering the US market, The Legal 500 United States has matured and expanded in line with its impending teens, with well over 300 leading firms earning a ranking in the 2019 guide. The past year saw some significant firm mergers, partner moves, and, on our side, the introduction of new ranking sections; but before we get there, let’s take a quick look at some market observations that came to light during the research.

Where to start? Well, you may have noticed that it’s almost impossible to talk about the United States without mentioning President Donald Trump. You may have also noticed that the 45th US President has at least a perceived impact on nearly every aspect of the domestic economy, and thus on the wider global economy. It’s difficult to determine which segment of the commercial landscape has been most affected by the current administration. From environmental protection to immigration and financial services to corporate taxation, lawyers have reported periods of both regulatory limbo and flurries of updated and anticipated compliance activity.

In terms of commercial activity, 2018 was one of the strongest years for M&A since the turn of the century. Some $3.5tn of global M&A deals were closed in 2018, while domestic M&A – in part driven by 2018’s sweeping tax reforms – increased by over 30% in Q3 when compared to 2017. Equity markets as well bucked the global trend, with domestic equity deals showing a slight increase in volume and IPO value year-on-year, despite a few bumps in Q2 and a mercurial Q4. Corporate debt, however, took a significant hit, and global offerings also finished down year-on-year.

Looking at our coverage of the US legal market, this year’s guide features a brand new Delaware law section, which highlights some of the leading firms providing specialised advice on the company law of the ‘First State’. Further, shareholder activism was introduced as a standalone practice area to showcase an active segment of the corporate and funds market, and a skill set that is increasingly relied upon as activist strategies have started to be utilised internationally.

The market saw dozens of high-profile partner moves across numerous practice areas, with firms including Paul, Weiss, Rifkind, Wharton & Garrison, DLA Piper, Orrick Herrington & Sutcliffe, and Gibson, Dunn & Crutcher among the market’s most active hirers. In addition, 2018 saw the merger of Andrews Kurth Kenyon and Hunton & Williams, as well as that of Foley & Lardner and Gardere Wynn Sewell. Other market moves included the transatlantic combination of Bryan Cave and UK-based Berwin Leighton Paisner, and the merger of Fitzpatrick, Cella, Harper & Scinto into Venable.

As the two largest firms in the world by revenue, it is perhaps unsurprising that Latham & Watkins and Kirkland & Ellis have the most top-tier rankings in our latest guide; 36 and 24, respectively. The only other firms to have top-tier rankings in more than 20 tables are Cleary Gottlieb Steen & Hamilton with 22, and Simpson Thacher & Bartlett just one behind at 21. Lathams and Kirkland also earned among the most rankings total (72 and 62, respectively), while Mayer Brown and Morgan, Lewis & Bockius each made their way into 65 ranking tables.

Seven firms in the US guide have at least 30 lawyers who have earned the title of a ‘leading individual’: Mayer Brown, Hogan Lovells, Gibson, Dunn, David Polk & Wardwell, Simpson Thacher, Kirkland, and Lathams, the last of which leads the pack with an impressive 61 partners recognized as market leaders. Some of these teams have also seen a number of their junior practitioners recognised as next generation partners or rising star associates. Other firms noted for their promising up-and-comers include Weil, Gotshal & Manges and Morgan Lewis.

Congratulations to every firm, team, and individual that made it into our rankings and leader tables this year. It’s been said dozens of times before, but thanks also to everyone who participated in the research and contributed to making our rankings accurate and comprehensive. We’re looking forward to doing it all again next year, but until then, enjoy the summer!

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Is funding defendants the future of disputes?

illustration of hand holding dollar sign

Despite initial reluctance from corporates and law firms, litigation funding has become a more accepted feature of the US commercial litigation landscape, although it has only been largely embraced by plaintiffs thus far. That, however, may be about to change as funders are expected to step up their pursuit of defendants.

Litigation funders provide all or some of the financing to cover the costs of disputes. In return, they receive a slice of the winnings if the case is successful; this may be a percentage of the damages or a multiple of the amount of funding provided. If the case is not successful, the funder may simply lose its investment.

For investors, it is easy to see the allure of an asset class which is uncorrelated with economic cycles, particularly in the context of low interest rates or stock market volatility. Litigation funding has proved an attractive option for major investors, including hedge funds. The potential returns are large, although the unpredictability of litigation, and the confidentiality of the agreements, can make it a tricky asset class to analyse.

Third-party funding has not always been greeted with open arms, though. Steven Davidson, partner at Steptoe & Johnson, notes how the largest law firms have historically represented defendants, rather than plaintiffs, in personal injury, wrongful death, and mass tort litigation, which may account for such firms feeling a level of suspicion towards funders.

‘I think that’s changed, because a lot of the litigation funding has moved into traditional commercial disputes, where there isn’t necessarily a real dichotomy between plaintiff and defendant,’ Davidson says. After all, he adds, ‘it’s certainly commonplace for a large company to have a commercial dispute with another large company or a country’.

Mark Goodman, co-chair of Debevoise & Plimpton’s litigation team, notes: ‘Litigation funding is more routinely being used to fund business-to-business disputes, which are the types of cases in which large, traditional firms feel comfortable being involved. Commercial contract disputes, for example, don’t raise the kinds of conflicts for firms like our firm that might arise in, for example, mass tort cases.’

Funders are also increasingly visible in the market, touting for work. ‘More and more funders are reaching out to lawyers or law firms to see whether their clients would like to consider litigation funding,’ says Tad O’Connor, partner at Kasowitz Benson Torres. ‘Ten years ago it wasn’t very common, but now, most lawyers who are handling large, sophisticated disputes will receive outreach from potential litigation funders.’

>Access to justice?

Proponents of litigation funding argue that it allows plaintiffs to pursue meritorious claims which they may not have sufficient resources to fund themselves. This access to justice argument is certainly appealing in what can be a prohibitively expensive legal system. Not everyone shares this rosy view, however, and some commentators ask whether an industry centred on profit-making can rely on arguments about fairness.

‘One obvious area of concern is that the litigation funder will have inappropriate or undue influence on the plaintiff being funded,’ says Goodman. ‘However, in our experience, as long as we are working with a funder who is ethical and who has put in place an appropriate funding agreement and other governing documents that clearly define the funding entity’s role, this has not been an issue.’

Gerry Silver, leader of Sullivan & Worcester’s litigation group, notes that while funders typically want to receive updates on their investment, they do not dictate the strategy. ‘If the funder is aligned with the law firm, they’ll trust the firm to do what is in it and the client’s best interests. Then it’s all set up so that the funder benefits too.’

Still, the fear that funders could try to direct a case is a pervasive one. Others question whether the introduction of a third party could reduce the plaintiff’s own financial incentive enough to affect their interest in the case.

There are also operational questions. As large amounts of money are now being directed towards litigation funding, some fear this could lead to weak claims being pursued, simply because money is available. The obvious counterargument is that funders want to make good returns, and will only invest in cases likely to succeed.

Unsurprisingly then, successful funders will employ experienced lawyers, previously from leading law firms, who can effectively analyse a case. ‘These people know what they are doing,’ says Silver. ‘They know what the problems could be, and they know the upside and the potential cost.’

The best-known funders are those which have been around the longest, like Burford Capital and Bentham IMF, but there are newer players too. ‘The number of litigation funders seems to be increasing, almost exponentially. There used to be a handful of big players, but we’re learning about lots of new entrants to the market,’ says Tariq Mundiya, chair of litigation at Willkie Farr & Gallagher. ‘The more new entrants to the market there are, the more competitive and potentially saturated the market for litigation funding becomes.’

>Disclosure issues

As third-party funding becomes increasingly prevalent, the courts have more opportunity to consider the technical issues which the industry raises. ‘If the plaintiff is receiving litigation funding, a key question is whether that should be automatically discoverable,’ says Mundiya. ‘Should there be mandatory disclosure? There are arguments on both sides, but I think that transparency in a dispute always helps.’

Many courts have thus far been reluctant to compel disclosure of funding documents, often referring to the work-product doctrine, which protects from discovery certain materials prepared in anticipation of litigation.

In Viamedia Inc v Comcast Corporation et al, before the Northern District of Illinois in 2017, the defendant sought production of documents disclosed by the plaintiff to prospective funders. The court found the documents were shielded from discovery, and that protection had not been waived.

This decision concurred with an earlier case, Miller UK Ltd v Caterpillar Inc. Here, the court held that materials provided to prospective funders under a nondisclosure agreement were protected.

In 2018, the New York City Bar Association established a litigation funding working group, which is studying the issues involved in third-party financing, including disclosure. It expects to publish a report by the end of 2019 and has invited comments from stakeholders.

‘Although the practice of litigation funding has become much more prevalent,’ says Davidson, ‘it is still not exactly clear whether courts and arbitral bodies will just accept it as a normal part of the litigation process, or whether they’ll show some scepticism towards it.’ While it is clear litigation funding is playing a role in the US commercial litigation market, what remains to be seen is how far new developments, such as those in defence-side funding, might impact the industry – and the litigation landscape – in the future.

‘There’s a fair amount of money in the market from litigation funders and other investment vehicles – like hedge funds – and they’ll be looking for new ways to make investments,’ remarks Davidson. ‘Funders moving to the defence side could be the next trend.’

Davidson is not the only lawyer to speculate on funders investing in defendants' cases in the near future. How this could work in practice, however, is not yet clear, but the legal market – and this particular researcher – will no doubt be watching with interest.