Legalist

Legalist, Inc. is a litigation finance company based in San Francisco, California that funds commercial lawsuits on behalf of plaintiff attorneys, applying machine learning algorithms to evaluate its potential investments.[1][2][3]

For practitioners of the various theological and philosophical movements called legalism, see Legalism.
Legalist, Inc.
TypePrivate company
IndustryFinancial services
Founded2016 (2016)
FoundersEva Shang, CEO
Christian Haigh
HeadquartersSan Francisco, California
ServicesLitigation finance
Websitewww.legalist.com

History

The company was founded in 2016 by two Harvard University undergraduates, Eva Shang and Christian Haigh, as an analytics service to help law firms lookup court records, and evaluate cases based on data gathered from those records.[3][4] A Thiel Fellow, Shang received $100,000 of initial funding to start the business from Peter Thiel's Thiel Foundation. Prior to launching at that year's Summer Y Combinator Demo Day, the founders decided to refocus the company on funding small business lawsuits directly, rather than helping lawyers or outside investors to do so.[4]

In November 2017, Forbes Magazine included Legalist's founders in its "30 Under 30" Law & Policy list and reported that Legalist had raised $10.25 million over the summer.[5]

In September 2019, The Wall Street Journal reported that Legalist had raised and closed its second fund of $100 million.[6]

In April 2020, AngelList named Legalist among the 52 best startups to watch out for.[7]

Service

Lawyers representing business plaintiffs apply for funding of their cases via the Legalist website, or through an integration with Clio, a case management software package.[8] The company then evaluates cases with a proprietary algorithm that estimates the likely duration of the case, and odds of winning,[9] based on factors such as the judge, court type, lawyers for both parties, and other facts about the case. Factors such as how many cases a judge is hearing help the company estimate how long the case will take.[10] The company primarily focuses on funding commercial litigation cases brought by small businesses.[11] Based on its guidelines for risk and expected return, the company then decides whether or not to underwrite the case in amounts up to $1 million,[12] with the assistance of the company's two underwriting attorneys.[12]

References
  1. Davey Alba (August 29, 2016). "You Too Can Invest in Lawsuits But Not Quite Like Peter Thiel". Wired Magazine.
  2. Joshua Hunt (September 1, 2016). "What Litigation Finance is All About". The New Yorker.
  3. Fritz Tepper (July 19, 2016). "Legalist is making it easier for lawyers to find state court records". TechCrunch.
  4. Biz Carson (August 24, 2016). "One of Peter Thiel's fellows created a new startup that will fund your lawsuit". Business Insider.
  5. Bogaisky, Jeremy; et al. (November 14, 2017). "30 Under 30 Law and Policy". Forbes Magazine.
  6. Will Louch (September 12, 2019). "Tech-Driven Litigation Finance Firm Raises $100 Million for Latest Fund". The Wall Street Journal.
  7. Spaventa, Sara. "52 Best Startup Companies to Watch Out for in 2020". AngelList.
  8. Gabrille Hernandez (March 17, 2017). "Legalist Integration With Clio Paves Way for Broader Litigation Financing". Legal Tech News.
  9. Maya Kosoff (August 24, 2016). "Peter Thiel is Backing a Start-up to Fund Other Lawsuits". Vanity Fair.
  10. Cromwell Schubarth (August 24, 2016). "Y Combinator startup uses Big Data to invest in civil lawsuits". Silicon Valley Business Journal.
  11. Alaina Lancaster (September 25, 2019). "What's Next for Legalist, the Litigation Funding Wunderkinds With $100M to Burn". The Recorder.
  12. Connie Loizos (September 17, 2019). "This young litigation finance startup just secured $100 million to chase cases it thinks will win". TechCrunch.
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