Let’s face it; change in the legal world is slow, often glacial. Lawyers cozy up to the status quo, which shouldn’t be surprising since much of their lives are governed by precedent and the predictability it affords. But this doesn’t mean that lawyers, law firms and corporate legal departments are incapable of change. It often just requires the right nexus of impetus and opportunity.

Today, there is a not-often-enough adopted opportunity to increase the profitability of legal departments—third-party funding or litigation funding. It is not necessarily new, with roots going back decades, but its place in commercial litigation is now emerging. For purposes of this article, third-party or litigation funding should be interpreted as situations where a party other than the client provides some form of funds to pay for costs and fees related to a litigation. This may involve a law firm through contingency fee arrangements, a ligation funder and insurance provider.