Chief financial officers ready to help general counsels to “recession-proof” the legal budget, says research.
Burford Capital, a global finance and investment management firm focused on law, has released the results of what it says is a groundbreaking new survey that asked Chief Financial Officers to share their views on how companies deal with the billions they spend annually on legal disputes.
Legal risk urgency
The “2019 Managing Legal Risk Report: A Survey of CFOs and Finance Professionals” reveals that finance executives see legal risk as an urgent business challenge, especially ahead of a potential recession that will put pressure on companies to use their cash wisely. CFOs report they are eager to partner with general counsels to embrace innovative new solutions, including legal finance. Christopher Bogart, Burford’s ceo, said of the research “As a former general counsel of a Fortune 20 company, I know that cfos don’t love legal spending. However, Burford’s research shows that cfos, particularly at large companies, embrace legal finance as a tool to manage and improve control over legal spending, even more so ahead of a possible recession when it is so important to create certainty around corporate budgets.” Mr Bogart added, “Cfos intuitively grasp that legal finance is simply corporate finance for law, no different from the financing they use to pay for other corporate costs, and a far better alternative than paying out-of-pocket or abandoning valuable legal assets.”
Based on data from 502 CFOs and senior finance professionals in the US, UK and Canada, key findings include: Companies are losing millions to abandoned claims and unpursued recoveries, a recession will cause legal budgets to shrink and legal finance to grow, cfos and finance professionals see legal finance as a tool to generate value, and following growth in the last two years legal finance looks poised for more. The full 2019 Managing Legal Risk Report: A Survey of CFOs and Finance Professionals is available here.