By John Ryan | October 28, 2018 | Legal Consultant Limelights, Litigation Funders
Eric Blinderman’s path to legal finance was an adventurous one – a track entirely fitting for an ascent within the burgeoning litigation funding industry that has seen tremendous growth in recent years. Prior to becoming CEO of Therium’s U.S. operations in 2016, Blinderman launched and owned a pair of highly regarded restaurants in New York City’s trendy West Village, served as a lawyer for the U.S. government in Iraq between 2004-2006, including a stint advising the tribunal that prosecuted Saddam Hussein and others for genocide, crimes against humanity, and war crimes (a passion he has continued to pursue in his ongoing efforts to assist refugees who have fled conflict areas), and was also international litigation counsel at Proskauer Rose LLP. The talented multitasker says that his decision to join Therium is rooted in his ongoing desire “to build something.”
“At no point did I envision myself owning and operating restaurants, serving in war zones, working at a large corporate law firm, or becoming the chief executive officer of a finance company,” Blinderman says. “It has been a long and winding career path of which I would not change a single thing.”
Lawdragon: Can you tell us about Therium and the services it provides?
Eric Blinderman: Therium provides litigation finance services to law firms, corporations, and individuals who want to convert a litigation interest – which is an illiquid asset – into capital. Put another way, we invest in meritorious lawsuits in exchange for a return, and the lawsuit is the collateral. Most of our financial products are non-recourse, which means that we only get our money back and take a return if the case wins. If the litigation doesn’t succeed, we take nothing.
One of the most exciting things about being at Therium is that the products and services we offer are rapidly evolving and expanding. While the industry primarily started out funding legal fees for litigation – which is still the bulk of our business – the structures can be more complex and the underwriting is becoming more nuanced as we create new legal finance products, including allowing large companies to seek off-balance sheet financing to leverage growth; engaging with law firms seeking to grow their business or transfer risk; and working with smaller companies with litigation or regulatory risk seeking financing to navigate such challenges and become financially viable.
LD: How did you get interested in litigation finance?
EB: When I was at Proskauer, I represented a series of litigation financiers and became immersed in the underwriting, structuring, and financial elements of legal funding. I was especially captured by the industry because it enabled me to use not only my legal expertise, but also tapped into my desire to build something and employ the skills I had developed in running my restaurants and other business endeavors. When Neil Purslow and John Byrne of Therium – who were at that time my clients – approached me about coming on as CEO in the Americas, it was a no-brainer.
LD: What do you like about this type of work?
EB: To be frank, I most enjoy underwriting and structuring deals. Underwriting allows me to test a case’s strengths and weaknesses with smart, committed and sophisticated lawyers and claimants. In the process, I get to learn how the attorneys and clients approach tough questions, which is critical to making a sound investment decision and also forges an essential relationship with the team that will be handling an investment, often for several years. Structuring deals also is immensely satisfying for me. Devising the optimal deal structure requires a deep understanding of what is driving a particular transaction and is critical to the success of an investment.
Therium is always a passive investor in the claims it finances: control of the case – including whether, or if, to settle – remains in the hands of the litigant and the litigant’s counsel. We structure our transactions in such a way that the interest of all constituencies (i.e., litigants, legal counsel, and funder) are aligned, enabling everyone to drive toward the same goal of a successful resolution of the case, resulting in a win-win-win for all. We at Therium serve as our clients’ financial partner, not just a capital source. This being so, finding the proper structure that best serves our clients’ needs – which sometimes can require more than a bit of creativity – is our primary objective.
LD: Are there any trends you are seeing?
EB: Increasingly, Therium is seeing a rise in the size of single-case matters it funds and in the sophistication of financial products required by our clients. Whether it is a law firm portfolio product, cross-collateralized investment product, or other similar such products, Therium continues to meet the needs of its clients by expanding its offerings into areas where it previously did not venture. The rise of these more complex financial products is driven in part by the market penetration and acceptance of litigation finance in the United States and abroad and the recognition that litigation finance is, at its core, no different than other more general forms of corporate finance. This growth and innovation also presents exciting opportunities for Therium and for the litigation finance industry at large.
LD: Looking back on your career, what would you say is the most interesting thing you’ve done?
EB: I served in Iraq from 2004 to 2006 – first, as an Associate General Counsel of the Coalition Provisional Authority (“CPA”) and later, as Chief Legal Counsel and Associate Deputy to the Regime Crimes Liaison’s Office (“RCLO”). During my time in Iraq, I advised senior members of the United States, Coalition, and Iraqi governments on matters of public international law, commercial law reform, international criminal law, and constitutional matters. While working for the RCLO, I assisted and advised the Iraqi High Tribunal (“IHT”) as it tried members of the former regime for gross atrocities committed against the Iraqi people. More specifically, I served from October 2005 until December 2006 as the principal U.S. attorney responsible for advising the IHT on all matters of law and procedure in the trial of Saddam Hussein and others for crimes against humanity. Hands down, trying members of the former Iraqi regime for genocide, crimes against humanity, and war crimes committed against their own people was the most interesting and personally rewarding matter I have worked on.
LD: Fascinating. Please discuss your educational and career path that led you there and after.
EB: My career path has taken a number of detours, all of which were unexpected but welcomed. I started out somewhat typically in that I joined a large commercial law firm straight out of law school, but it was short-lived: I quit just two weeks later when I was offered a scholarship to obtain a Master’s degree at the University of Oxford. From there, I clerked for a federal judge and then rejoined my prior firm. While working as a mid-level associate – which by itself can feel like more than a full-time job – I made it a point to continue writing about international law and also started a small business, a restaurant in the West Village called “Mas (farmhouse)” which I opened in 2004. Much to my surprise, the restaurant succeeded beyond all of my expectations, even in New York City’s ultra-competitive culinary market. I eventually opened a second restaurant in 2011. Needless to say, I was always multitasking while at the law firm.
Things got even more interesting when a close friend from law school asked if I would leave New York to join the U.S. government in Iraq, which I did. In fact, I landed in Baghdad on the very day my first restaurant opened. After about three years in Iraq, I returned to the firm to build out my litigation and arbitration practice, which included advising litigation-finance entities. In yet another twist of fate, Therium was a client of mine before they asked me to join them as CEO of their U.S. operations.
LD: Was there a course or professor that was particularly memorable or important in how your career turned out?
EB: A former business partner suggested that I take the course"Value Investing" at Columbia Business School, and that value-investing view of the world has framed nearly every aspect of how I operate Therium in the U.S. The coursework was based upon the most basic of premises: Your uncle has just bequeathed $5 million to you. Your neighbor owns an ice cream shop and wants you to invest that $5 million to expand the ice-cream business. What factors do you need to understand in order to make the investment? What I found most fascinating was that this simple premise provided an investment framework that could be applied to nearly any asset class, including equities, debt, real estate, or litigation finance investments. My time at Columbia also afforded the opportunity to engage with a reading list covering finance heavy-hitters from Benjamin Graham to Philip Fisher to Warren Buffett, and to then grapple with and apply their ideas. This exposure to the world of value investing has proven tremendously helpful in my litigation-finance career.
LD: How about any mentors you had after becoming a professional?
EB: I have had countless mentors and experiences that have shaped the course of my life, and couldn’t possibly name them all here. Having said that, I owe an immense debt of gratitude to my partners in London, John Byrne and Neil Purslow, for entrusting me with the responsibility of launching, managing, and growing Therium’s operations in the United States.
LD: What advice do you have now for current students or young professionals who wish to have a similar type of career?
EB: Any young professional who reads this should understand that careers will last decades and that they should not be afraid to take risks to accomplish the goals that are most meaningful and important to them, as opposed to what friends, colleagues, and others might think is appropriate. While I can’t guarantee that taking risks will always result in rewards, I do know that I would have missed out on all of the best parts of my career if I had played it safe. I’ve found that, most often, the reward is in the risk taking itself and the journey that follows. That’s why I have never made a single career choice based upon the desire for financial gain alone. Instead, what drives me is my desire to build, to contribute, and to effectuate change. So, my advice is to make career decisions based upon the individual drivers that are unique and satisfying to you. And don’t be afraid or intimidated by what everyone else might think.
LD: How would you describe your style or philosophy as a professional service provider?
EB: One of Therium’s greatest strengths is that we are a nimble and user-friendly team that values thoughtful and creative approaches to problem solving while also being decisive and minimizing the impact of finding financing on the lawyers and litigants with whom we work. Our entire U.S. team is comprised of former BigLaw litigators, so we understand the many pressures that our clients face. Lawyers have to prosecute cases and litigants have businesses to run: they have important work to do, and our goal is to be a financial partner that enables them to achieve better, more efficient, and more effective financial outcomes – not to make them spend countless hours spinning wheels with underwriters. Therium gets to the heart of a matter quickly so that it can approve a financing transaction as rapidly as possible. By remaining respectful of the pressures our counterparties face - pressures we fully understand because we have experienced them firsthand, - we develop relationships that, thankfully, keep our clients coming back to us.
LD: What advice would you give potential clients in terms of how to most productively work with an outside advisor?
EB: For lawyers and/or clients seeking to work with a litigation-finance company, I would advise that they approach their financial partner with candor. No case is foolproof. All claims have weaknesses and proactively raising such issues at the outset of the potential engagement will establish credibility, shorten the underwriting process, and allow the litigation finance company to better assist and serve its client.
LD: Can you discuss a few other factors in wanting to become CEO of Therium in the U.S.?
EB: I can explain my motivation for taking on the role of Chief Executive Officer for the United States and the Americas as part and parcel of my desire to build something. At various points in my career, I have been tasked with building things. For example, in Iraq I was among those to construct from nearly scratch a judicial organ which was designed in part to hold individuals accountable for horrific deeds. At the same time, there was an element of this job which looked to the future and attempted to create an institution which would frame how the country's judicial system might operate prospectively.
Likewise, I have built and designed a restaurant enterprise (which now functions as a real estate holding company) and a law practice. This desire to build led me to Therium. My partners in London have given me the tools to build an institution which is quickly establishing itself as a market leader in the United States, which is not surprising as Therium has long been a preeminent market leader abroad. This opportunity was second to none, so I naturally joined Therium when I was asked to lead its operations on this side of the pond.
LD: What are some current challenges in your leadership role? Can you share some strategic plans for your firm in the coming months or years?
EB: The current challenges I face at Therium are many, but thankfully we have a really great team both here in the U.S. and abroad and ample resources and thus can meet all potential obstacles head-on. Increased capital continues to flow into the litigation finance market. Regulatory pressures – often uninformed – continue to impact the litigation-finance industry. To cope with increased competition, Therium positions itself as nimble and creative in the products it provides. I also serve as part of an industry group which seeks to educate judges, legislators, and others about how litigation finance operates so that any regulation is approached intelligently. Most importantly, I try to surround myself with individuals who are immensely hardworking and smarter than me. I then simply try to provide them with a platform to succeed and stay out of their way.
LD: What do you try to “sell” about Therium to potential clients?
EB: Salesmanship is not necessarily a natural part of my DNA. Notwithstanding, I do try and instill a corporate culture where principles and values matter. These goals apply to every aspect of Therium's work and, when translated to our interactions with our clients, distinguishes Therium from other firms. Stated differently, it is important for Therium to treat its counterparties with fundamental fairness and for Therium to take with abject seriousness our role as funders. Given that I have a background in public service and given that Therium is primarily staffed with attorneys who take this responsibility to heart, we hope and expect that our clients and potential clients recognize these characteristics as important when choosing Therium as opposed to another firm.
LD: What do you do for fun when you’re outside the office?
EB: Outside of the office, I try to get in the occasional run. In addition, as I mentioned, I owned and operated restaurants for years, which is tremendously fun and rewarding. Being a restaurateur in New York City, you meet really interesting people from all walks of life, which I suppose is also true of being a lawyer. I also have an interest in a film-production company which makes documentary films and is great fun.
LD: Are you involved in any community or pro bono work – perhaps those related to some of your other legal interests?
EB: Besides my work for Therium, I assist refugees fleeing war zones. Specifically, I provide legal assistance to foreign nationals who worked as drivers, translators, and logisticians on behalf of the United States military or government and are now looking to find safe haven in the United States or elsewhere. Given that I served nearly three years in Iraq assisting and advising the Iraqi High Tribunal to hold members of the former regime accountable for genocide, war crimes, and crimes against humanity; it is important to me that I continue to serve even though I am now in the private sector. Thus, I apply my legal training to assist those who risked their lives to keep me and my colleagues safe while we served. As a lawyer, there is probably no higher calling than helping someone in danger find peace, safety, and security.
LD: If you weren’t in your current job, what would you be doing now?
EB: If I were not in my current job, I would probably be out in a conflict zone trying to assist refugees or otherwise trying to prevent or punish those responsible for perpetrating gross atrocities upon others.