Erudite, strategic, principled ... one can expect nothing less from our next guest, Martin Shellist. Known for his dexterity in both trial law and asset management, Mirena Umizaj invites the sage attorney to discuss the pedagogy of litigation funding.
In this particularly didactic episode of The Heart of Law, Martin and Mirena talk shop. This time, we get a glimpse of the legal finance industry as he expounds on the differences between a traditional bank and a litigation financial firm like Virage Capital Management. Illuminating us on the many uses of capital for litigation, Martin shares invaluable insight on the fiscal discipline and fiscal intelligence that qualifies a potential client; more importantly, we hear the immense ethical responsibilities that go within its processes. As Martin articulates the inner workings of funding the business of law, we learn about fiduciary duty, case inventory, contingency interest, client aggregation, healthy attorney-client relationship, and quickly understand why “educating the marketplace lifts everyone.”
Our incisive host leans in when Martin deconstructs the many challenges—even dangers—a firm may face if they choose legal financiers with mandatory debt service, prepayment penalties, or (worse) those who influence the outcome of a case. While he encourages borrowers to meticulously vett their documentation and avoid using the funds for daily operational costs (instead of the cases), he firmly reiterates the importance of having an accountant (perhaps an ethicist) involved so all transactions are fiscally sound. Throughout the conversation, we realize how Martin runs his company and the high ideals Virage operates by: equitable and upstanding.
As Martin predicts the future direction and specialized evolution of litigation finance, we can’t help but feel relief hearing from someone who cares enough to help us find the right questions and gives us the courage to ask them. Because Martin functions within the cadence of forthrightness, accuracy, and conscientiousness, we intuit that we’ve listened to an unassuming giant whose huge footprint positively shifts the financial paradigm in the legal world.
EPISODE SURVEY
[00:03:48] Transitioning into the legal finance world as a veteran attorney
[00:08:35] The key utility of litigation funding
[00:20:05] What Virage looks for in potential clients
[00:28:17] Vital information to know before getting involved in mass torts
[00:39:18] The nitty-gritty of interest and prepayment penalties
[00:47:31] The foundational difference between bank loans and litigation funding
[00:54:04] How to sagaciously handle post-settlement loan repayment
[01:19:02] Clearing up misunderstandings about nonrecourse and recourse loans
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