Trial Lawyer View Podcast
William Marra & Asim M. Badaruzzaman

William Marra00:00:00

What we are typically doing is servicing smaller firms that would like to compete with the incumbent player. And what do we generally believe more competition does it results in better services and less expensive services.

Asim Badaruzzaman00:00:13

What it requires is capital, and we require some operational expertise or an interest in developing tools and workflows that can accomplish that goal. Right. And I think the people who are tapping into a structure like ours, there will always be advantage to that.

Jason Lazarus00:00:29

That's William Morrow, director of certain group and as seen by Riesman, CEO of certain legal solutions, they believe that the firms gaining ground are not just buying more tools. They're building the operational systems, workflows and team buy in that allows smaller personal injury firms to compete with the bigger players and deliver better outcomes.

Asim Badaruzzaman00:00:53

The thesis is that it needs to be a fully vertically integrated platform, right where you can take your case from inception to resolution in terms of the core delivery of legal services right through the lifecycle of that case, and plug it into all of these different things, but do it in a way that's seamless. But once you have that fully integrated inside your organization, then the handoff between, well, I just settle the case now, I need to resolve the lines, but I need to unite as a third party. If it's within your organization, that's far more seamless.

Jason Lazarus00:01:22

In this episode, you'll learn how to choose tools, workflows, and operating models that help your team move cases forward instead of adding another layer of friction. I'm Jason Lazarus, and this is Trial Lawyer review. Well, and a simple welcome to trial review. Thank you for joining me today. Thanks for having me. Yeah double the trouble here today. So yeah, I want to start out with a thesis because I want to test this with you guys. And that is you know capital and operations are converging in plaintiff's law. And the firms that treat that as a strategic question instead of a back office, one I think is going to outpace everyone else over the next five years. Am I overstating that, or because it seems like we're at this inflection point with the kind of movement with MSOs and private equity and finance converging in plaintiff's law?

William Marra00:02:20

Yeah, I agree with you. I think it starts with a pretty fundamental access to justice, access to the courts. One, which is why a litigation is extraordinarily expensive. It costs hundreds of thousands of dollars or even of dollars to bring a quaint offside case. Law firms traditionally have not had access to the capital markets that non-legal businesses have had. Part of that is hardwired into some of the legal ethics rules. And for plaintiffs law, a lot of the time, you're representing claimants that don't have a lot of capital. What we have, I think, happily seeing over the past 10 to 20 years is a recognition that there are, in fact, significant ways to get capital to lawyers who are trying to help clients pursue their plaintiffs side pieces. And we're seeing that across a range of structures that include litigation funding that include some of the MSO structures that, some is is very familiar with and you're going to have clients that are demanding law firms that have access to the capital paying you to help finance their case. So I think that's exactly right, that, you're moving towards an increasing amount of capital in the legal sphere and the firms that are able to efficiently and effectively access and deploy that capital are the ones that are going to win.

Asim Badaruzzaman00:03:51

I was going to add, and I think the way that we'll framed it as an access to justice, the justice issue, I think that's exactly right. At the beginning of the process, taking it one step further. Yeah. And especially from my perspective as, you know, somebody who is leading an MSL, I also look at it as on the other side, of of that spectrum or the end of that spectrum, which is delivering good outcomes. Right. And I think both of those things sort of marry together with having access to the capital and then having an operationalized, piece that can get you from the foot in the door from have access to justice, and then actually getting the justice by getting a good outcome for your client.

Jason Lazarus00:04:33

To your point around the MSO running the business efficiently and profitably to help even more people and as you said, deliver the right end result. But that all starts with also sufficient capital to make sure that you can litigate those cases because, you know, whether it's Mastercard or some of the single event cases, they can be very, very expensive to litigate. And so that that was kind of where I wanted to start. Will, with a question for you, for a trial lawyer that's thinking about growth capital for the first time, what are the biggest misconceptions about litigation funding and what hard questions should a trial lawyer ask before bringing an outside capital into their practice?

William Marra00:05:22

Sure. So. So maybe to orient, folks to the market as we as we respond to that on the litigation final night and I spend most of my time leading the litigation finance vertical here. Sorry. You can think about three principal markets for litigation funding. There's a commercial market which are a financing of business to business disputes, breach of contract, intellectual property disputes, antitrust suits, bankruptcy and the like. That's category one commercial funding, category two mass tort funding, financing of law firms that are pursuing mass claims. Mass wrongs allegedly committed by the defendants. Category three consumer funding, typically small or dollar financing directly to required for a law firm that is considering funding and for a claimant that may have a good claim that is considered funding. I think there's a few things that, that they should understand. I think first is the capital is non-recourse. That's sort of, the North Star of the industry, which is basically if the case loses the law firm or the client, whoever took the funding doesn't owe anything back. Second, and this is important, funders are not controlling the litigation. They're not controlling the law firm's exercise of its ethical duties. They're not controlling settlement. And and I think one overall, I and we at certain especially were or built by and composed of litigators, not investors. Though we are investors, we recognize that the legal system and law firms are simultaneously to things. The law is a perfection governed by legal ethics rules and other rules. And it is also we recognize that business. You cannot practice that perfection in a way that is helping your your clients, unless you're recognizing and trying to optimize the business side so that you can actually effectively provide those legal services. I think the other thing that I would just say, and now pause, is these are multi-year relationships. And it's really important as you think about which under to work with to recognize that this isn't an in and out transaction. You're going to you're going to be working together essentially for years, even if under trust in this, in this passive role. And I think folks should put a lot of time and energy not into the cost of capital, but to the identity of who's providing a capital.

Jason Lazarus00:08:10

Good. Well, good segway into the question I was going to ask you about, because it seems like and what we are seeing in the litigation funding world is more of, equity style arrangements and longer term partnerships. So how does that change the risk profile, control dynamics and potential upside for law firms considering that arrangement?

William Marra00:08:38

Yeah. So there's two general types of, arrangements you can enter into. Even across the different verticals that I discussed. There's claimant side funding where the funder is contracting directly with the claim holder, the litigant, the plaintiff. That's typically what we would call single event or single case funding, where the firm is providing the fees and costs to support a single matter, getting the return only from that matter. And a lot of law firms use that and just pursue single case funding. But other law firms who are using litigation finance to grow their businesses are also working with us on a portfolio basis. What does that look like? In that case, we're entering into a funding transaction directly with the law firm. We are not in privity with the claim holder. The law firm is then litigating the case on a full contingency, and we are funding part of the fees and the case expenses. On behalf of the law firm. So what does that do that allows law firms to then approach new clients and offer them a full contingency arrangement, both likes that have strong cases but can't afford or don't have the risk appetite to take on litigation expense. And that can be a very effective way for law firms to to grow their practices, you know, serve a greater number of clients and to your to your question and maybe your point in there, if a fund is investing on something on a portfolio basis, the funders risk in principle should be lower and thus the returns that they demand are going to be lower as well.

Jason Lazarus00:10:15

So how do you guys go about the underwriting process and evaluating those types of relationships? What what should a law firm understand and expect in that kind of a process?

William Marra00:10:30

So it's a pretty extensive underwriting process. And while firms should understand that claimants should understand that and hopefully they'll view that as a good thing, right? I mean, if you think about the impact that funding has on the civil justice system broadly, it actually operates as a screen for the merit of cases before they even get filed. Cases that are funded by a third party financier have probably gone through more extensive diligence than any other case that's filed in the federal courts. EPA that's point number one. What the process looks like is typically a pretty extensive underwriting process done by counsel internal to our team or the team at another funder. And then frequently we are also hiring outside lawyers, even outside experts, to help us evaluate the likelihood of success for our case. At that point, we are not only evaluating whether it is a good case for us to invest in, but also helping the client make their case even stronger. We just had that with with a case we were working up last week where we found some new evidence, and the claimant was delighted the claimant hadn't found it online, the law firm hadn't found it, and we help them build their case, make their case even stronger. And so, although it is a relatively extensive diligence process, we fund less than 5% of cases that we see just to provide folks that kind of a context. At the end of the day, whether we're funding your case or not, hopefully you're coming away from that conversation with a with a stronger case. And if it's not a great case with a view that, hey, maybe you shouldn't be investing your time or money into the matter either.

Jason Lazarus00:12:21

Now, great points. So, well, I know you've been involved, from an advocacy standpoint around regulatory issues with, this part of the industry. And I'm curious if litigation finance functions as a capital market for small and midsize businesses that otherwise lack access to traditional financing, how should policymakers weigh restrictions on funding against the broader economic impact on competition and access to justice? Because it seems like it's a it's a difficult issue.

William Marra00:13:00

Yeah. So part of the way that I think about this and approach this issue is the practice of third parties funding litigation is everywhere in our legal system, the same way that it's everywhere in our capitalist economic system. We call that the capital markets, right? If you want to grow your company, hire new employees, invest in R\&D. Most people don't have cash on hand. Retained earnings to finance that themselves. If you want to go buy a house or buy a car, people rely every day on third parties to help them pursue legitimate life activities. Litigation is, for better or worse. Unfortunately, one of those activities that is sometimes necessary all of those traditional forms of capital markets are not available to everyone, right? Large companies have access to very liquid equity and debt markets on wall Street. There's a lot of times when it makes sense for them to call me or ask them to get litigation funding, but they don't have to. The companies that call us are disproportionately small and medium sized businesses or impecunious, not wealthy individuals that need the capital to effectively pursue their case. And so part of the way that I think about this from regulatory perspective is you need to think one, what is our impact on the civil justice system? And two, what is our impact on the capital markets? Right. And and we should be crafting regulations. And this is debated in, in front of judges, in front of legislature. We should be crafting regulations that are always geared towards promoting access to our civil justice system. And I would say promoting access to official capital markets.

Jason Lazarus00:14:45

Well, isn't it to about balancing the scales to some extent, because, I wanted to ask you about, you know, when these proposals surface to tax or regulate litigation finance, lawmakers really understand its role as a productive, productive capital, supporting meritorious claims, because the alternative to that is that, you know, perhaps with trying to regulate, they're creating a structural advantage for large corporate defendants in both the marketplace and the courtroom. Because, you know, when you're talking about access to justice and you know that the plaintiff side is always underfunded when compared to their adversaries, which can be billion dollar corporations. You're exactly.

William Marra00:15:30

Right. And there's been a lot of scholarly commentary and a lot of political commentary that's exactly concerned with that. Right? Our litigation system, for example, typically pits rip player defendants against one shot or plaintiff. That comes a whole series of incentives where the system ends up getting tilted towards the defense side and towards the interests of repeat players, who tend to be the wealthier, large, large corporate defendants. Litigation finance now presents itself as an as a way, as a means for those smaller one shooters to access the courts in a way that they have not been able to before. Some people don't like that, right? Some people don't want to change in the status quo. And part of what we try to do on the advocacy side is make the case to judges, lawmakers and other policymakers that if you think about the kind of civil justice system that you want and the kind of capital market that you want, who should have access to both of those, that you should think about, who craft regulations that are going to promote responsible access, coordination, funding, not discourage access to it, because if you're going to discourage access to it, you're going to have a lot of folks that have really strong legal claims and are not going to be able to vindicate those rights.

Jason Lazarus00:16:59

Yeah, and restricting capital markets in that way just seems unfair in general. Just to me, there's a fundamental fairness issue there.

William Marra00:17:12

I completely agree. And, you know, I, I'm, I'm making this point in an article that that, should be published. Me and my you all review in connection with a symposium that I recently coauthored there, which is if you think about a federal rule, for example, that would require disclosure of third party litigation funding. Our federal rules are supposed to be what's called trans substantive. They're supposed to apply equally to all causes of action, all litigant types. And we're talking about on Capitol Hill, and some of these advisory committees, disclosure rules and taxes that do not apply equally on their face and in their effect to small against and large to other games, they're imposing unique burdens on smaller litigants with strong plaintiffs side cases, seeking monetary damages. And that's the kind of disparate impact, you can say, differential impact that we should be resisting in these in certainly in the federal laws. And I would say in federal statutes as well.

Jason Lazarus00:18:18

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William Marra00:19:39

And that's that's partly why in in some of my writings, especially an article that was in the Southern California Law Review last year, I, I tried to make this case that it is not just about plaintiffs versus defendants. It's about small businesses. Right? The folks who need these this particular corner of the capital markets, they are small businesses. And I think helping small businesses and allowing free and equal access to the capital markets, hopefully that is something that can more approach bipartisan consensus than framing something as simply quaint at versus the kind of, well,

Jason Lazarus00:20:17

I want to pivot, talk a little bit about MSAs because it just is a fascinating area to me to see it now coming to fruition in the legal space, because you've seen it, a lot in medical practice over the last ten years. I mean, it's crazy to see how consolidated that's become. And, and mass and personal injury firms seem to be the ground zero for MSOs in the legal space so far. What is it about high volume, high complexity dockets that make it especially attractive for, a service platform like an MSO?

Asim Badaruzzaman00:21:04

Yeah. Look, I mean, I think it starts from, plaintiffs lawyers specifically, but any lawyers recognizing that there is a lot of value in operationalizing how they deliver services to their clients. Right. What I was saying earlier, ultimately, it comes down to, at the end of the day, what kind of outcome to achieving for your client? And if you have a platform that can, handle large volumes of cases, especially if you're a master practitioner, like I am, since I saw lots of practice law, or you're a single event, personal injury firm that wants to do more trucking cases or MBA cases or premises liability cases. I think a lot of lawyers understand, and I don't think it's a new revelation. I think, it's something that they didn't really have access to, in terms of having the capital availability to, to do something like this before, but now that there are products and services in the market and vehicles that they can use to operationalize, and increase the capacity and the bandwidth for them to handle higher volumes at better and deliver better outcomes. I think those are all the things that are probably attracting most people. Right. But those are the conversations that I have been having, with folks. And that's the value that I have always seen, in an MSO model where you can, deliver high efficiency, legal services, which ultimately I always see this as if you can do something in terms of delivering outcomes to your client. That's faster and cheaper. That's my job is as their lawyer. Right? Get them. Get them the best possible outcome for the best possible price. That I think, MSOs are a very and clearly, you know, that's the course that we're charting. That they have the ability to provide that sort of a platform to to lawyers to deliver those services.

Jason Lazarus00:23:05

It's funny, because you're making the same argument I make to law firms about, you know, why their staff spends time on administrative tasks around identification, verification and resolution of health care lines, something they don't get paid to do, something they have no expertise in, and takes away from high level legal tasks that the firm can be engaging in. And it seems to me that the MSO is the same exact thing. All those things that a law firm has to manage as a business. If those are operationalized in MSO and they just are plugging in to that model, that's such a huge advantage to the operational efficiency and profitability long term.

Asim Badaruzzaman00:23:57

Yeah, absolutely. Look, I mean, the the thesis is that it needs to be a fully vertically integrated, platform, right where you can take, your case from inception to resolution. In terms of the core delivery of legal services right through the lifecycle of that case, and plug into all of these different things, but do it in a way that's seamless, right? You use the example of, of lien resolution. Right. And as a master practitioner, I have for the better part of two decades that I've done mastered litigation, always used, a third party lien resolution service for the exact same reasons that you said, but once you have that fully but integrated inside your organization, then the handoff between, well, I just settle the case. Now, I need to resolve the leans, but I need to you that as a third party, if it's within your organization, that's far more seamless. But that's just one example of of what you can operationalize within your your integrated organization. You know, medical record retrieval and review is one of them. I mean, the thing that we were talking about earlier in terms of, actually finding out whether or not your client has the injury or, you know, was involved in that accident. All of those things in one platform, end to end. That is just the best way that your staff can focus on the, the core of how they get, better results for your client as opposed to doing these, rote and mundane tasks that you can do either through automation or through some sort of a what I like to call a Ford assembly line process, where you can do it better or faster and cheaper, to get a better result for your client.

Jason Lazarus00:25:42

Well, so, you know, certain acquisition of an MSO signals a shift for you guys from being a capital provider, really, to operational partner. So why move beyond the traditional funding relationship with the firms you guys have worked with into managed services?

Asim Badaruzzaman00:26:03

I'll give you my view. I'm sure you all has a perspective from the finance side. The way that we see this, a certain group is given our sort of core business of litigation finance and risk insurance, it's all makes just clear sense that if we're going to give you the capital to fight the fight, we might as well give you also the operations to do it really well and do that fight really well. Right. And we can give you a platform where you have access to the capital and access to a fully vertically integrated solution that will, allow you to focus on delivering what you do best as a lawyer, which is the art and the substance of practicing law and representing your client. In court before a judge, before a mediator or an arbitrator, before a jury, as opposed to focusing on the operational piece of. Hey, let me make sure that our staff is actually doing what they're supposed to be doing to, you know, do X, Y, and Z. So that's how I see it. Well, may have other thoughts on that.

William Marra00:27:02

Yeah, I think that's exactly right. If you if you want to be a great all around the great firm, you need to be things you need to practice law, you need the capital to run that empower that law firm. And you need to do the business side of the firm. The operational warriors have a monopoly on the first piece, but they can rely and do. And even before the rise of of this new litigation, finance and MSO industry have relied on third parties to help them with capital and help them with operations. And we are building the next generation platform that is fully integrated and is, in a way, the one stop shop. You get the best of both. Well.

Jason Lazarus00:27:51

Let me ask you this directly because it's sort of what you're just saying, but DCMs is primarily as efficiency engines, capital access vehicles or a bridge towards a more institutionalized type of law firm structure or all of them. I it sounds like it's all of those things.

Asim Badaruzzaman00:28:13

Yeah. Look, I mean, I think the idea behind it is, an institutionalized structure where, everything from end to end runs as a well-functioning business. Right. Good. Because ultimately it is a business that you're running as a lawyer. Your bill, whether you're a plaintiff, lawyer, defense lawyer, or a different doesn't matter what type of lawyer you are. There is a very large business aspect of it which they don't teach us in law school. And I think a large point of the Amazon model is to create an institution, that operates really well, all the way from Bill, the capital injection to the outcome of, Bill, the delivery of whatever service you're delivering to your clients.

Jason Lazarus00:28:55

Yeah. I mean, it's it's such an important point, and I think a lot of resistance is out there in terms of this idea of or traditionally there's been resistance to firms being run like a business because there's been this distinction. Well, it's a it's the practice of law, but there are core functions that, you know, are just like any other business. The only thing that's different is the delivery of legal services that the, the actual delivery, of lawyer services, just like with doctors, though. And, and the operationalization of the back end of a medical practice, to me, it's all the same thing, really. At the end of the day, the arguments that somehow a, personal injury practice or a law practice in general has to be treated differently. I just don't think there's any merit to that in the firms that actually focus on running their firms like a business with what's going on with technology. And these movements, that we're seeing in the market. To me, I think signal that any notion that you can run a law firm without focusing on the business fundamentals is out the window. Now.

William Marra00:30:17

I think that technology piece is especially apt. If you look at the New York Stock Exchange, every type of companies represented, except for wall firms already unique disadvantage and their ability to make long term investments. A contingent fee is a long term investment. That's why major law firms, larger law firms, typically don't do many contingent fee cases. Investing in technology is also a long term investment, and as you have pressure from legal technology companies, from accounting firms, from other companies that can have a more traditional corporate structure, can more efficiently make these long term investments. They can eat law firms lunch. So law firms need to find ways to make these long term investments that can let them compete and survive. And if your concern is as our concern is the long term sustainability of a safe and effective law firm practice, you want to welcome this development because it actually provides a moat and a buffer from law firms to resist competition from these non law firm entities that, like it or not, going to encroach on what law firms traditionally do.

Jason Lazarus00:31:42

There's a lot of detractors and commentators out there that are describing MSOs as a gray area for bringing outside capital into law firms without going for abuse. I'm curious about your perspective. Where is the line between, operational support and de facto ownership and how how are firms going to need to navigate the ethical guardrails?

Asim Badaruzzaman00:32:10

Yeah. Look, I think ethical guardrails are extremely important, right? Especially as, this area of, law improves and evolves over time. And there are certainly regulators that are taking interest in, number one, better understanding how different MSOs function. And number two, you know, what can and should be done to make sure that they're being run in a way that's not running afoul of the rules. I think if you're talking about an MSO like ours, a fully integrated organization that runs on a model where we're providing service to our firms for a fee, there are already rules on the books like rule 5.4 that, govern not sharing in attorneys fees would land lawyers, right. Yeah, I, we we, you know, as a lawyer, as lawyers, we live in a highly regulated profession as it is. And I don't think anybody would argue that there shouldn't be regulation, you know, the work that we do and the impact that we have and the damage that lawyers can do from bad lawyering or unethical lawyering is so profound. Regulation is important to the extent that it doesn't, stifle innovation. Right? That it doesn't stifle the ability of what being a role is saying, lawyers and law firms is ability to compete in the marketplace, and provide services that that there is significant demand for and not enough supply for. So having ethical guardrails is important. And as I mean, that's the philosophy that we take the we take that responsibility very seriously and we keep an eye on, you know, do the developments in this space on this question of Bill, what are MSOs structurally really trying to accomplish? And how should how or why? And to what extent should there be regulations, that, regulate their conduct?

Jason Lazarus00:34:06

I'm curious about your take on this. So you've got Arizona, embracing the the alternative business structures and funders and private equity entering more openly through those. Do you believe that MSOs are a transitional model on the way to a broader deregulation or a permanent solution that will define the next era of for firms, growth and exit possibilities?

Asim Badaruzzaman00:34:38

Yeah. Look, I mean, I think, the MSO model is not something that lawyers invented, right? I mean, this model has existed in accounting and finance and, and medicine in veterinary practices. So we're we're charting a new course, I think, in, in the law, but not in terms of a concept for how to run your business. So I don't know if I myself see this as some sort of transitional model. I think if it's done right and if those of us who are trying to do this right and are at the forefront of of establishing a foothold in the market for how an MSO should be done in a legal space, if all of that is done right, that I think that that is probably the way that a lot of law firms of the future are going to go. Right. But if we don't, then, you know, the regulators will have a lot to say about how we can structure, law firms and how to run them, you know, as, as this area grows.

Jason Lazarus00:35:35

If you had to make a prediction. Because I'm curious about this, because I just had a recent conversation with an investment banking group that is involved with raising equity for, an MSC. So what do you think five years from now, it'll look like in terms of consolidation of firms around the MSO model, meaning, you know, like here in Orlando, we've got Morgan and Morgan, one of the largest personnel in the largest personal injury firm in the country. And firms have trouble competing locally with that kind of model. And it seems like with the MSOs, you're going to see something similar if there really is enough buy in to that, because the firms that are part of an MSO are going to have these advantages, that firms just don't have access to those same resources. So what do you think it will look like in five years? Will they be half the pie firms that there used to be, or is it not really going to be that kind of transformational for the industry?

Asim Badaruzzaman00:36:48

I'll tell you from my perspective that somebody who is, who lives on the operational side and, and work might have a different perspective or an additional perspective on this. There's nothing that stopping any lawyer or any law firm for, from creating, an operational base that can help you run your law firm as an institution, end to end and deliver, high efficiency, legal services at high volume. Right. What it requires is capital and requires, some operational expertise or an interest in developing tools and workflows that can accomplish that goal. Right. And I think the people who are tapping into, a structure like ours are the, you know, there will always be advantage to that, that that will always be a good value proposition for people where you can take advantage of a pre-built structure, from an operational perspective and then focus on the core delivery of, of your, your legal services. But those who are out there and doing it at a high level on their own, with their own brand, there are plenty of people in the space that have a really good brand and have a really good operation. I think they will still be very, very competitive. And I think time will tell exactly which which side has as more of an advantage. But, I don't think it's going to lead to a universe where there's a handful of large MSOs that have absorbed all the firms, and there's not enough competition in the delivery of legal service. I just don't I don't see that happening.

William Marra00:38:19

The point that was made earlier about the cost of legal services and access applies equally here. Kinds of things that I want to give your funder can do, or an MSO provider can do, or large firms can do that in-house firms with billions of dollars in revenue, or 100 millions of dollars or tens of millions of dollars in marketing budgets, can do that in-house. What we are typically doing is servicing smaller firms that would like to compete with the incumbent prior. Right. And what do we generally believe more competition does it result in better services and less expensive services? So I would think that the introduction of tools to help more firms compete with the incumbents is going to allow for more, rather than fewer service providers, better rather than worse and lower cost, rather than more expensive legal services. The.

Asim Badaruzzaman00:39:26

And I've heard the argument that Bill MSOs, in the medical space have led to a rise in the cost of medical expenses and medical costs, and that may or may not be true, but in the legal space, especially on the contingency side, where our bill, where we live, those fees are regulated. Right. And there is a there is a ceiling to how much you can charge your client. So being able to deliver that efficiently and faster and better and better quality, I think that's a win for clients. At the end of the day.

Jason Lazarus00:39:59

Again, exactly. My argument around health care lien resolution to and ultimately because it puts more dollars into the client's pocket from a Nap perspective, when those are negotiated aggressively and correctly with the right strategies, I want to just before we conclude a talk to you guys about a, a couple of, things that are evolving in terms of technology with AI now being used to prescreen claims, detect fraud patterns and guide funding decisions to some extent. What risks do you see if predictive tools begin shaping which cases get financed or pursued?

William Marra00:40:39

So we use AI a lot at certain, we use it for basically anything except the predicted use, and it helps us do a lot of the operational side. It helped us condense and get summaries of some of the documents that we're reviewing. But the judgment is still there, practiced by a human. When you raise an interesting question, though, I mean, historically, a province of interpreting laws has has been the monopoly by lawyers. Right? And now we have these models that are interpreting legal documents and coming up with an answer resolution. Right. And some folks want to use these to mediate arbitrate disputes. I think that's going to pose some pretty interesting, difficult questions. Or the legal system that scholars and policymakers and judges and practitioners are going to want to really, wrestle with. I think if we think about questions like cost, I think it has the ability to radically change the cost basis, cost base for for how litigations are pursued. Discovery is usually the most expensive piece of litigation or B2B litigation that we find. I hope that AI is going to help dramatically reduce the cost of that discovery that may, by the way, lead to less demand for some of our services right, because litigation finance, in many ways a function of the high cost of litigation. But, you know, all of this comes with many of the appropriate caveats that apply to AI in legal space and that apply to AI broadly. Right. And in the estimation of cases we've seen in other sectors, AI gone wrong. And I think these are I'm not saying anything particularly new here to say this is, you know, one of the leading public policy issues that humanity is going to have to deal with in in the years to come.

Jason Lazarus00:42:39

Yeah. Great point. I wanted to ask about mass tort litigation because it's uniquely data heavy. Thousands of plaintiffs, millions of documents. Do you see I as fundamentally changing how firms are going to evaluate merit, allocate resources and then evaluate risk in those cases? Or is it because I think we just touched on this, but I'm curious, you know, is it going to be primarily an efficiency tool layered on to the existing model? In the mass tort context?

Asim Badaruzzaman00:43:12

I don't see it just as an efficiency model. It is, you know, we're using it currently where we have measurable efficiency gains and things like reviewing medical records. Right. Running them through a model, that pulls out all of the metadata that your the you want to see, while you're evaluating the case at the front end. Right. But I also see it as a value driver because you can now surface things that before you were relying on on your human reviewers to do and trudge through, you know, millions of pages of documents over an entire docket of, you know, one tort, versus something that can be a tool that can do it at a much higher accuracy rate, and much shorter time for relatively much cheaper. And it can actually help you, for example, in negotiating a settlement. Right. Having a clearer view into every single matter as opposed to what we've done many times, you know, as practitioners in the vast space, you do a random sampling, right? And, and you get a data scientist to tell you we were talking about predictive modeling, you know, do a predictive model of what the entire, population looks like based on that random sample. Well, you don't have to do the random sampling because you can take the entire data set and run it through, and AI tool and extract all of that metadata. And then you can look at it and say with a very high degree of confidence, this is what you know is the good, bad and the ugly in my docket of cases or all of the plaintiffs in a given litigation. So it has measurable, impacts. I think we're just starting to see how it's being used on that, that back end of things at the end of the life cycle of litigation. And it will only it will only continue to get better over time.

William Marra00:45:04

And by the way, defendants and judges have access to the same tools, right? So one of the biggest criticisms we see of the presence of litigation refinements in the book today is that it is helping lawyers amass dockets of worthless cases. And there's a lot of reasons why I think that argument is wrong on its merits. But now that argument is sort of defined by AI, right? Because you do not have to settle those dockets with the sampling. You can actually look at all of the cases. And that, I think is going to be transformative for the efficient and effective resolution of these of these large mass court. So if you.

Jason Lazarus00:45:46

Were a plaintiff, personal injury law firm, CEO, SEO managing partner, or a mass tort form, and you're listening to this episode, what are 2 or 3 structural decisions you would want to be working through in the next 12 to 24 months, given everything we were just talking about.

Asim Badaruzzaman00:46:09

There, I don't know, well, if you wanted to talk about that, but, look at me. I think, what you need to think about probably is, number one, what is the value proposition of, you know, undertaking this sort of an exercise? What, you know, turning your operations, institutionally into an MSL. Right. And, you know, changing the structure of how your law firm is functioning. What are you going to gain out of that? Is that going to help you better deliver better outcomes to your clients? Is that going to help your firm grow? Is that going to help you access, the resources, both from a capital perspective, but also from, the view of the core operational perspective? To be a better lawyer and for you to get better results for your clients. I mean, I think those are the things that I would think of, if I, you know, running a firm or running a practice and thinking about, you know, how do I use all these different, developments that are revolutions that are happening in this space to my advantage and the advantage of my client.

William Marra00:47:10

And I would say on the starting block is, is those lawyers again, it starts with young lawyers still in law school or just starting their careers. Just familiarize yourself, educate yourself about the many tools that are out there. And it's sort of the same approach that while Katinka Day I taught right now, which is you're going to have to be native for these if you want to succeed in the legal landscape and the technology landscape of tomorrow. And so we'll hear out what your goals are for your crown, for your practice, and then understand all of the many options that are out there, because there are a lot more than there were a few years ago, and they'll probably be a lot more tomorrow. And so, so to go on that journey and, frankly, pick up the phone, call us, call someone else who you know and trust and try to understand the different options, because there's a lot of ways that really sophisticated and really smart lawyers are using these tools to grow that business.

Jason Lazarus00:48:10

Great points. Final question for you both. And I'll ask it individually to you both because I think you guys have different views. And that's what I want to get. With this last question I always ask, it's very open ended. Well, I'll start with you. You know, with your focus in the litigation funding world, what is your view?

William Marra00:48:32

Yeah. So I think that, I think access to the courts is going to get very heavily democratized in the next five, ten years. I think awareness of these topics is still extraordinarily low. Most lawyers, almost all lawyers, have not done a single litigation funding deal. And every claimant that we work with, it's basically their very first deal. I think as awareness grows, you're going to have a totally different, much larger industry. And you have today. And I think the key differentiator among providers is, is going to be your team and your ability to add value for the case, right. Because I think the capital side, I don't think it's quite going to become commoditized, but you're going to be able to get capital for the best cases. And the the claimants and the law firms that own those cases that have those cases are going to be able to choose who they want to or they want to work with. So I think we're going to see a pretty significant growth in the industry size. I don't think regulation is going to help the industry grow. I don't think it's going to hurt it. And, and I think that's that's where the space we're going.

Jason Lazarus00:49:39

So same question to you, Asim, but really more focused on your views as a master practitioner and the MSO kind of direction. So I'm curious about your overall view on that.

Asim Badaruzzaman00:49:57

Yeah. Look, I'm a my view is that, MSOs, are going to be, something that a lot of, people in this business are going to utilize to operationalize their business and grow their business and deliver better, better outcomes. I think the value proposition is just very clear for for lawyers to see that there is a better way of doing what you're doing. And, you know, I think, MSOs like ours are. Well, we're building a fully vertically, vertically integrated solution. There will be more of those, and that will elevate the quality, of lawyering, particularly on the plaintiff side. But I think on both sides of the V, as both the technology tools that we're using to to do the job of, the improve and become more widely adopted, and as law firms and MSOs become more and more sophisticated as time goes on.

Jason Lazarus00:50:53

Great points. So if anyone's got questions about anything that you've talked about with the MSOs and mass tort space, what's the best way to get in touch with you?

Asim Badaruzzaman00:51:03

We're happy to give out our contact information and we have a website. You can reach us there. You can email us, call us anytime, anywhere. We field questions and calls all the time about, you know, questions. I'm sure we'll get questions about litigation finance all the time. I get questions about, you know, what we're doing and you know how how to evaluate even just AI tools. I, I had like two conversations just yesterday with people asking, have you use this other tool. Tell more about it. So anybody who wants to do that we're happy to always be available.

Jason Lazarus00:51:30

And the websites is certain certain group.

Asim Badaruzzaman00:51:33

Okay.

Jason Lazarus00:51:33

Same question. What what's the best way to get in touch with you? People have questions about litigation, finance or any of your areas of expertise.

William Marra00:51:41

Yeah. Website email or LinkedIn. While reactive approach and all those and we'd love to help you folks.

Jason Lazarus00:51:47

Thank you both for spending some time with me this afternoon. Great episode. Really appreciate it. And we'll see everybody on the next episode of Trolley Review. If today's episode gave you a new perspective on how your firm operates or sparked a useful idea, consider sharing it with a colleague and be sure to follow the show so you don't miss future conversations with leaders across the personal injury. Space Trial Law Review is brought to you by Synergy, a strategic operations partner helping personal injury law firms resolve health care lines more efficiently. If you're looking to accelerate case flow and allow your team to focus on high level legal work that moves cases faster, consider partnering with Synergy. I'm Jason Lazarus and I'll see you in the next episode.