Why This Matters to Me

When you spend years on Wall Street, you get trained to see the world through numbers. You learn how risk is priced, how capital moves, and how incentives shape behavior. That training stays with you. It stayed with me when I left Goldman Sachs and moved into a boutique environment at Lake Avenue Capital.

What surprised me, though, is where some of the most meaningful opportunities are showing up. I am talking about litigation finance and the broader post-litigation economy. This space is still misunderstood by a lot of people. Some hear it and think it is cold money chasing lawsuits. Others think it is too complex to matter.

I see something different. I see a market that can generate solid returns, yes, but also a market that can fix real problems in the legal system. It can help people and businesses pursue fair outcomes they otherwise could not afford. That is not a slogan. It is a practical shift, and it is happening right now.

The Problem Finance Is Helping to Solve

When a person sues a large company, the playing field is rarely level. The same goes for small businesses. Legal cases are expensive. They require time, experts, and stamina. Meanwhile, big corporations have deep pockets and legal teams on standby.

This imbalance creates a quiet form of injustice. Many valid claims never get filed. Others get settled too early because the claimant cannot afford to keep fighting. Even when a case is strong, the cost of pursuing it can push people into giving up.

That is where litigation finance steps in. It does not create a claim. It supports one that already exists. It gives plaintiffs the resources to stay in the game long enough for the legal process to work.

What Litigation Finance Is in Plain Language

Litigation finance is simple in concept. An investor funds some or all of a legal case. If the case succeeds, the investor earns a portion of the settlement or judgment. If the case fails, the investor loses their investment.

Think of it like venture capital for legal outcomes. You back cases that have strong fundamentals, you diversify across many situations, and you accept that not every bet will win.

What makes it different from other investments is the return driver. Legal cases do not move based on interest rates or stock prices. They move based on facts, law, and process. That creates a return stream with low correlation to traditional markets. It also creates an opportunity to have impact in the real world.

How It Improves Access to Justice

The phrase “access to justice” can sound abstract, so I like to keep it grounded. Here is what litigation finance changes in practice.

It removes the cash barrier

A plaintiff with a strong case often cannot afford the legal costs needed to pursue it. Funding covers expert witnesses, discovery, and legal time. That means the case can be argued on its merits, not on the claimant’s bank balance.

It reduces forced settlements

Without funding, many plaintiffs settle early for less than fair value. They do it because they need money now, or because they cannot risk a long fight. Funding gives them breathing room. It lets them negotiate from a position of strength instead of desperation.

It helps lawyers take better cases

Some of the best lawyers in the world still have limited resources. Funding allows firms to take on complex cases that require upfront costs. That expands the pool of representation and improves quality across the system.

It supports small businesses

This point is often overlooked. A small business harmed by fraud or breach of contract might have a valid claim, but they cannot afford to chase it. Funding can protect the business and its employees by allowing a fair dispute process.

The Return Story Does Not Conflict with the Impact Story

Some people assume that if a strategy has social impact, it must sacrifice returns. In this space, I do not think that is true. In fact, the return and impact can reinforce each other.

Investors earn returns because the legal claim has value and because the system takes time to unlock it. Plaintiffs benefit because they get resources sooner and fairer negotiating power. Both sides win when deals are structured responsibly.

This is not philanthropy. It is a market solution to a market problem. The key is to keep incentives aligned so that funding supports fairness, not exploitation.

The Ethical Line We Have to Hold

I talked in a previous piece about ethics in litigation-linked investing, and I will say it again here. This market only works long term if it earns trust. That means investors have to be careful about how they operate.

Transparency matters. Plaintiffs should understand what they are agreeing to. Pricing matters. Returns should reflect real risk, not the claimant’s lack of options. Integrity matters. We should walk away from deals that feel predatory even if they look profitable.

If investors cross those lines, the market will tighten, courts will push back, and the entire ecosystem will lose credibility. If investors stay on the right side, the space grows and serves more people.

Why Institutions Are Getting Involved

One of the strongest signals that this space is real is the way institutional capital is moving into it. Pensions, endowments, and family offices do not chase fads easily. They look for long-term fit, diversification, and durable returns.

They are attracted to litigation finance for three reasons.

First, it is non-correlated. It adds real diversification.
Second, the return profile can be strong, especially in diversified portfolios.
Third, it carries a clear social benefit when done right.

Institutions care about that last point more than people think. They want returns, but they also want to be able to explain why those returns are deserved. Funding access to justice is a story that stands up to daylight.

What I Have Learned Watching This Market Grow

From my seat, the growth of litigation finance feels like the early stages of private credit. At first, it was niche. It felt complicated. It had a few bad actors, so people were cautious. Then the infrastructure improved. The underwriting got smarter. The manager class matured. Institutions came in, and the market became more stable.

We are in that same arc now. Technology is improving case tracking and claim verification. Reporting standards are getting better. Serious managers are building real track records. The market is still young, but it is moving in the right direction.

Find a Balance

I have built my career around finding value and managing risk. Litigation finance fits that lens, but it also does something more. It adds liquidity where the system creates delay. It balances power where resources are unequal. It gives people a fair chance to be heard.

Wall Street can feel far away from everyday life, but capital has always shaped society. When it is deployed responsibly, it can solve problems that laws alone cannot fix. That is what I see in litigation finance. It is not just an alternative investment. It is a tool that can make the justice system work better for more people.

As investors, we should not be afraid of that impact. We should be proud of it, and we should protect it by keeping our standards high.