For Law Firms

Mitigating Risk – Maximising Reward

Factor Risk Management works closely with leading law firms in assisting them and their clients in exploring and obtaining cost-effective risk management solutions. Whether it is after-the-event (‘ATE‘) legal expenses insurance, M&A and transactional risk insurance or litigation funding, or indeed a combination of the these that you are seeking, we have the experience, expertise and market relationships to assist you and your clients in successfully finding a solution.

Law firms and their clients also benefit from the fact that FRM’s co-founder and Director, Mohsin Patel is a former litigator who understands the nuances of litigation itself as well as the importance of effective client management.

In addition to assisting your clients manage their litigation and transactional risks, there are numerous other products and services available directly to law firms themselves including:

Damages Based Agreement (‘DBA’) insurance

This product allows a law firm to fully or partially offset its down-side risk when acting on a DBA, allowing it to potentially attract more cases and thereby diversifying your risk across a larger portfolio, allowing it to manage its financial risk in a prudent manner. Premiums are ordinarily deferred and contingent upon success and therefore only payable to the extent that you it is successful in the underlying claim and a sufficient monetary recovery is made. Should the case be unsuccessful, the insurer will reimburse the law firm for an agreed portion of its fees, thereby removing its downside risk.

This product can be used in conjunction with a standard or portfolio financing facility should a law firm require capital to service its ongoing cash-flow requirements, and ordinarily at a lower rate given that funder’s capital would be underwritten by the insurance policy.

Portfolio finance

Where a law firm is acting on several cases on a whole or partially contingent basis and is looking to obtain finance to assist with cash-flow or to offset some of their risk, a funder may be willing to offer finance on the proviso that their risk is cross-collateralised across the book of cases. This can be attractive to law firms as they will benefit from lower pricing and a more seamless individual transaction execution.

Disbursement-only funding

For firms working regularly on DBA/CFA agreements and whom are presently self-funding disbursements, there are various recourse and non-recourse solutions available to firms to alleviate cashflow constraints and release working capital.

Law firm finance

Some Funders may be willing to provide a facility to advance growth or expansion capital on where traditional lenders will not. This may be provided on a non-recourse and unsecured basis or through traditional debt/equity finance. This is particularly attractive to law firms that are unable to access traditional lending facilities for various reasons.

Benefits to law firms of using FRM

Independent, impartial & expert advice
We are not tied with any particular funder or insurer and have access to a wide selection of markets. As experts in our field, we ensure that you and your clients receive professional and comprehensive advice.

Regulatory shield
As specialists in litigation finance and insurance, we remove the regulatory risk and burden from individual lawyers by placing adequate distance and providing impartial advice on the options for your clients.

Efficiency
A lawyer’s time is better spent preparing and advancing their client’s case and not having to source, structure and execute potentially complex risk mitigation arrangements. Law firms benefit from our expertise and experience in knowing when and how to approach the market to ensure the greatest likely success in the shortest possible time frame.

Trusted partner
Our founders have worked with leading global law firms over many years in providing solutions for their clients.

Holistic solutions
As a broker and advisor, we are unique in our expertise of both funding and insurance. We take a lateral-thinking approach to all cases that we consider and we use our resources to create innovative solutions.

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