By Lawdragon News | December 20, 2021 | Legal Consultant Limelights, Litigation Funders
Since joining Longford Capital as a Director in 2018, Justin Maleson has had a front row seat to observe the dramatic growth and expansion of the litigation funding industry. With general acceptance of funding continuing to trend upward across the legal community, Maleson expects even more widescale adoption and continued innovation over the next decade. He sees Longford as one of the true pioneers and leading innovators in the industry, and is thrilled about the creativity and developments Longford is driving today.
Maleson believes that industry growth and adoption is being propelled in large part by the versatility of funding, seeing it as a Swiss Army-style tool that can be used in a wide variety of situations to solve a wide range of problems. Maleson himself is similarly versatile, having spent nearly a decade at Jenner & Block litigating a broad spectrum of cases. Practicing primarily as a defense lawyer also provided him a unique perspective for evaluating and identifying what makes a good case for funding. In addition, his marketing background makes him particularly well-suited to the non-legal aspects of the litigation finance business, with his current role placing him squarely at the intersection of business and law.
Lawdragon: You’ve been at Longford for three-and-a-half years now, after nearly a decade in Big Law. Is it everything you expected?
Justin Maleson: My move from private practice to a private investment fund executing a new investment strategy was a big career move, and it has actually exceeded my expectations. So much of that is because of the people. I know that sounds cliché, but it’s true. Across the board, we have an incredibly unselfish, talented, creative, and supportive team. We’re a very close-knit group and we genuinely like each other, which I think comes across when we’re speaking with folks outside the company. I’m very fortunate to love what I do and believe that’s largely because of how much I genuinely like, respect, care for, and enjoy being around the members of our team.
On top of that, the work itself is incredibly exciting and fun, and because the industry is still relatively new, there’s a lot of room for innovation and discovery. That really excites me. I like being challenged and I enjoy solving problems. And rarely a day goes by where I’m not faced with a new challenge, or an unanswered question, or a new problem to solve. From my first day at Longford, I’ve been encouraged and given the space to be creative and bold, and I’ve taken that to heart.
It’s a perfect fit for me – the work is exciting, the culture is supportive and encouraging, and I love our team.
LD: What types of law firms do you typically work with, and what types of matters do you fund?
JM: It runs the gamut. We’re partnered with some of the biggest firms in the country. We regularly work with AmLaw 50, 100, and 200 firms. But we also work with litigation boutiques, regional powerhouses, and mid-sized firms. Since the pandemic, we’ve seen a spike in inquiries and use of funding among firms.
In terms of the types of cases, I focus primarily on antitrust matters and other commercial litigations and arbitrations with at least $25 million in damages. For the commercial bucket – which is very broad – think breach of contract, fraud, other business torts, trade secrets misappropriation, insurance disputes, and pretty much any other type of B-2-B disputes. I also focus heavily on international arbitrations, including both commercial and investor-state cases.
LD: Why do you think law firms and claim owners bring their matters to Longford?
JM: The answer to that question differs depending on the firm or company, but much of it comes down to relationships and how we communicate with and treat the people we’re working with. We’re sincere, transparent, and plain-spoken. I believe that resonates with people and it is a huge part of the reason we have such a strong track record of repeat clients.
Another reason law firms and companies bring cases to Longford is that we put in the work. When we’re presented with a case, we roll up our sleeves, get into the weeds, learn the case inside and out, and ask tough questions. Because we’re hyper-selective and reject most cases presented to us, it’s incredibly important that we add value along the way. That’s a big part of why so many of the matters we’ve funded were brought to us by attorneys who previously presented cases that we had to decline.
LD: When you're brought a new claim by either a law firm or by a claim owner, what questions do you ask?
JM: The specific diligence questions change from case-to-case, but as a general matter, we focus on liability/merits, defenses, damages, and collectability. There’s obviously more to it than that, but in broad strokes, those are the pillars we focus on.
When I was in private practice, most of my work was on the defense side. So, when I evaluate a case, that’s the lens I’m looking through. I always try to put myself in defense counsel’s shoes and try to figure out how the defense is likely to attack and poke holes in the plaintiff’s case. By isolating and evaluating the primary risk factors, I’m able to better assess the case’s overarching risk profile.
Fundamentally, I also believe it’s important to be pragmatic when evaluating cases. For example, economics are obviously critical for purposes of understanding the range and likelihood of potential outcomes. Big damages numbers are fine to discuss, but because a plaintiff won’t get to the high-end of the damages range without going to trial, and most cases don’t go to trial, it’s important for me to understand the realistic potential settlement range, the realistic timeline and off-ramps in the litigation lifecycle where settlement discussions could take place, and the claim owner’s expectations.
Economics is just one of many factors to consider because, not surprisingly, there’s a significant amount of information to process and evaluate when deciding whether to invest in a case. Because nothing happens in a vacuum, it’s important to keep everything in perspective and in the context of how each piece of information fits into the bigger picture.
LD: Earlier this year, Longford and Willkie Farr & Gallagher publicly announced a $50 million funding arrangement. Does the public announcement of your relationship with Willkie signal a shift toward greater acceptance of the industry among Big Law?
JM: It’s important to distinguish between Big Law’s acceptance and use of funding, and the decision to publicly announce the use of funding. Awareness and acceptance of funding has become much more prevalent among Big Law and has continued to grow since I started at Longford in 2018. I’ve seen that firsthand.
With respect to Big Law publicly embracing funding, the Willkie announcement was an important moment, and I suspect that we have paved the way for other firms to publicly embrace funding. It may already be happening; I saw that Harbour recently announced the launch of a new litigation funding venture with Mishcon de Reya. There will be more to come.
LD: How do you apply the way you think about cases, and the criteria you apply to evaluating them, in the context of Longford’s relationship with Willkie Farr?
JM: One of the best things about working with Willkie is that we understand and know how each other work because, before joining Longford, I spent nearly 10 years working closely with Craig Martin, the Midwest chair of Willkie Farr & Gallagher, and the talented team of lawyers he’s assembled at Willkie. As a result, I know how detail-oriented and discerning they are, and how they work up cases. So, while my diligence process doesn’t change when I’m evaluating cases presented by Willkie as opposed to other firms, there’s a unique level of confidence and trust stemming from our years together, which certainly helps the process.
LD: In what other ways would you say Longford has been innovative, or pushed the envelope in litigation finance?
JM: When Longford was founded, it was one the first litigation funders in the United States. There were funders in other countries, but litigation finance was incredibly novel here in the United States. When I look back at the company’s early funding deals, and compare them to what we’re doing today, it’s remarkable how far things have come. Longford started with single-case investments, and expanded to pioneering law firm portfolios, monetizations, business development funding, and novel defense funding products. Longford is one of the true pioneers and leading innovators in the industry, and, on a personal level, having the opportunity to contribute to and drive innovation is wonderfully fulfilling.
LD: Where do you see litigation finance headed over the next 10 years?
JM: There’s much greater awareness among law firms and companies than when I joined Longford in 2018, but as I mentioned before, because the funding industry is still relatively young in comparison to other asset classes, there is still a lot of room for innovation and discovery. For example, I expect to see continued development of defense funding offerings as the industry continues to expand and evolve. I also expect more states to follow Arizona’s lead in allowing non-lawyer ownership of law firms, with several other states currently exploring the issue, and many others likely to follow. That will certainly impact the funding industry.
More generally, acceptance and understanding of funding will continue to grow across the legal community. That’s already happening, and the trend will certainly continue. Litigation funding is probably considered mainstream already, but within 10 years, I expect that classes on litigation funding will become commonplace at law schools across the country.
LD: Litigation finance can be arcane and sophisticated. Still, it’s different from being a partner at a law firm. Would you say that the professional transition to Longford has had a positive impact on you?
JM: Absolutely, it’s been very rewarding all around. Before joining Longford, I’d spent my entire career at Jenner, going all the way back to when I was a summer associate. When I decided to make the move to Longford, it was a big change going from a 400+ attorney law firm to a 20-person litigation funder. It ended up being a perfect fit for me, and I’ve enjoyed every minute of it. And as I said before, so much of that is because of the people, which really matters when it comes down to day-to-day enjoyment.
Also, I love being a lawyer, but I’m not spilling any secrets when I say there are aspects of practicing law that I don’t miss, like billing time and dealing with discovery fights. Working in litigation finance, I get to focus on the fun stuff – digging into the core of the cases and understanding counsel’s micro and macro level strategies – while avoiding some of the more mundane parts of practice. I’m a hyper-competitive person and have always enjoyed the competitive aspects of practicing law. So, do I miss being in court and taking depositions? Yes, of course, but I still get to experience a lot of the same highs and get the same rush from selecting and investing in cases, and then going along for the ride.