Question 1

What types of law firms qualify for law firm capital?

Accepted Answer

Law firm capital is available to contingency fee practices of any size — from solo practitioners handling personal injury cases to large multi-office firms managing mass tort portfolios. The core qualification criterion is an active docket of contingency fee or hybrid-fee matters with demonstrable case values. Firms must have retained counsel arrangements and active litigation in states where Criterica Capital operates. We evaluate the docket as a whole — not individual partner creditworthiness.

Question 2

Does the firm's credit history affect qualification?

Accepted Answer

No. Law firm capital from Criterica Capital is underwritten against the case docket — not the firm's credit profile, balance sheet, or banking history. We do not run personal credit checks on partners and we do not require personal guarantees. The firm's financial health is secondary to the quality and composition of its active case portfolio. Firms that have been turned down by traditional lenders due to the illiquid nature of their contingency receivables are often excellent candidates for our capital products.

Question 3

Can a firm apply if it already has a line of credit with a bank?

Accepted Answer

Yes. Litigation finance and bank credit are not mutually exclusive. Many firms use bank lines of credit for overhead and payroll while deploying litigation capital specifically for case-related expenses — discovery, expert witnesses, deposition costs, and plaintiff advances. Because litigation capital is typically non-recourse or limited-recourse to the firm, it does not appear on the firm's balance sheet in the same way as traditional debt. Consult your accounting advisors on the treatment, but the existence of banking relationships does not disqualify a firm.

Question 4

Are plaintiffs' firms only, or can defense firms qualify?

Accepted Answer

Law firm capital from Criterica Capital is structured for contingency fee practices — firms that only get paid when their clients win. Defense firms and hourly-rate practices have fundamentally different cash flow structures that do not align with non-recourse capital. If your firm has a mixed practice (plaintiff contingency side and hourly defense side), we can evaluate the contingency portion of your docket independently.

Question 5

What is the minimum docket size for portfolio financing?

Accepted Answer

Portfolio financing typically requires a minimum active docket with meaningful aggregate case value. We evaluate on case count, average case value, practice area concentration, and state distribution. Minimum parameters vary by product — single-case financing has lower thresholds than portfolio lending. Contact our institutional team with a summary of your active docket and we will assess fit and structure within 48 hours.

Question 6

What information is needed to begin the underwriting process?

Accepted Answer

The initial review requires a docket summary: active case count, practice area breakdown, estimated case values, average case age, and state distribution. You do not need to share full client files at the initial screening stage. Once we confirm fit, our underwriting team will request representative case files for a deeper evaluation. The process is confidential — we sign NDAs prior to receiving any proprietary docket information and our team operates under strict conflict protocols.

Question 7

How long does the underwriting process take?

Accepted Answer

Initial qualification review is completed within 24 to 48 hours of receiving a docket summary. Full underwriting — including case file review, docket scoring, and term structuring — typically takes two to four weeks depending on docket size and complexity. Mass tort portfolios with hundreds of active plaintiffs take longer than smaller single-practice dockets. We provide clear milestones at the start of the process and keep the firm updated throughout.

Question 8

Do clients need to be informed that the firm is pursuing litigation capital?

Accepted Answer

This depends on jurisdiction and the specific product structure. For non-recourse single-case financing, attorneys in most states are required to disclose material financial arrangements that could affect representation — and litigation finance arrangements may qualify. For portfolio lending to the firm (not individual case financing), disclosure obligations vary. We work with your ethics counsel to ensure compliance with Model Rules 1.4, 1.7, and 1.8 as they apply to your specific structure and state bar.

Question 9

Can a firm use capital for purposes other than case costs?

Accepted Answer

Yes, depending on the product. Case cost financing is earmarked for litigation expenses — expert fees, e-discovery, deposition costs, trial preparation, and similar hard costs. Working capital facilities can be used more broadly: overhead, associate salaries, business development, and operational expenses. The terms of the facility specify what capital may be used for. We work with firms to structure a facility that matches their specific needs.

Question 10

What is the difference between single-case financing and portfolio financing?

Accepted Answer

Single-case financing provides capital for a specific identified matter. Repayment is tied to that case's resolution. Portfolio financing is extended against a defined group of cases — providing more flexible deployment and allowing the firm to draw capital as needed across the portfolio. Portfolio financing typically offers better economic terms because the funder's risk is diversified across multiple case outcomes rather than dependent on any single result.

Question 11

Is litigation finance for law firms recourse or non-recourse?

Accepted Answer

It depends on the product. Single-case, non-recourse financing means the funder is repaid only from the proceeds of that specific case — if the case fails, the firm owes nothing. Portfolio financing often has limited-recourse features: losses on some cases can be offset against recoveries on others, but the firm is not personally liable for the full principal. Working capital facilities are more likely to carry some form of recourse, typically against the portfolio as collateral. We structure each product transparently and clearly explain the recourse profile before execution.

Question 12

How are returns to the funder calculated?

Accepted Answer

Returns are structured as a multiple of invested capital (MOIC) or as a percentage of case recovery, depending on the product. Case cost financing typically earns a fixed multiple (e.g., 1.25x–1.75x) on the amount deployed. Portfolio financing may be structured as a revenue share against settled matters. Working capital lines of credit typically carry an interest rate. All terms are disclosed in full in the facility agreement and there are no hidden fees.

Question 13

Can the capital facility be repaid early?

Accepted Answer

Yes. Early repayment is permitted on all Criterica Capital products. For case cost financing, early repayment (before expected settlement) is governed by the terms in the agreement — typically a minimum MOIC floor or a time-based rate schedule. For working capital facilities, early repayment typically triggers no penalty. We structure agreements to avoid prepayment penalties where possible, and all repayment terms are explicitly stated before signing.

Question 14

How and when is repayment triggered?

Accepted Answer

For case cost and single-case financing, repayment is triggered by case resolution — settlement, verdict, or judgment collection. Your firm's settlement disbursement process includes repayment to the funder as a defined line item, similar to a medical lien or case expense reimbursement. For portfolio facilities, repayment is triggered as individual cases within the portfolio resolve. We coordinate with your finance and operations team to ensure repayment is handled efficiently and without disruption to client distributions.

Question 15

What happens if a funded case is lost?

Accepted Answer

For non-recourse products, a defense verdict or unfavorable outcome means the funder absorbs the loss — the firm owes nothing on that specific case. For portfolio financing, a loss on one case does not necessarily trigger a repayment obligation, as the portfolio-level return may be sufficient to cover the funder's expected return. The specific treatment of adverse outcomes is always defined in the facility agreement before funding begins.

Question 16

What happens if the firm dissolves or a key partner leaves?

Accepted Answer

Change-of-control and dissolution provisions are addressed in every facility agreement. These provisions vary by structure and are negotiated at closing. Firms considering partner transitions or practice changes should discuss the timing with us before executing — most structures can be amended to accommodate firm reorganizations without triggering full repayment, provided we are notified in advance and the underlying case portfolio remains intact.

Question 17

Does litigation capital create a conflict of interest?

Accepted Answer

Properly structured litigation finance does not create an impermissible conflict under Model Rule 1.7 or 1.8. The funder is not a client, does not direct case strategy, and does not have a proprietary interest in the cause of action in the way that would trigger conflict analysis. However, if the funder has an economic interest in the matter that could materially limit the attorney's independent judgment, disclosure to the client and, in some states, client consent may be required. We work with ethics counsel to structure arrangements that avoid triggering adverse conflict provisions.

Question 18

Does the funder have any role in case strategy or settlement decisions?

Accepted Answer

No. Every Criterica Capital facility agreement contains a non-interference provision: we have no role in case strategy, settlement negotiations, litigation decisions, or any aspect of the attorney-client relationship. The attorney retains full independent professional judgment. We monitor the portfolio for performance but our communication with the firm is limited to financial reporting, case status updates, and repayment logistics — not substantive case direction.

Question 19

Are there any attorney ethics rules that prohibit taking law firm capital?

Accepted Answer

No state bar has issued a blanket prohibition on law firm litigation capital. ABA Model Rule 5.4 (Professional Independence) is the most commonly cited rule in this context — it prohibits fee-splitting with non-lawyers and arrangements that compromise professional independence. Properly structured litigation capital does not violate Rule 5.4 because the funder does not receive a share of the attorney fee — they receive a share of the total case recovery or a return on capital deployed for case costs. Several state bar ethics opinions (including from New York, Illinois, and California) have confirmed the permissibility of properly structured arrangements. We provide access to our compiled ethics opinion library.

Common questions from contingency fee practices.