Part
01
of one
Part
01
Litigation Financing Market Size
Although there is no pre-compiled, publicly available information on the market size for litigation financing in the United States for small and medium-sized law firms, this segment of the litigation financing industry is estimated at between $1.6 billion and $2.2 billion. Additionally, the total addressable market for this industry segment is estimated at between $56.1 billion and $123.1 billion. Details associated with these estimates are provided below.
Market Size Estimate A
- An extensive review of credible media sources (e.g., Bloomberg Law), legal industry reports (e.g., Legal Executive Institute), articles by experts in litigation financing (e.g., ABA Journal), legal industry data aggregators (e.g., Statista) and publications by key players in litigation financing (e.g., Westfleet Advisors) confirmed that there is currently no pre-compiled, publicly available information specifically on the scale of the litigation financing industry for small-to-mid-sized firms in the US.
- However, this exhaustive search revealed that Westfleet Advisors is widely cited by industry experts (e.g., Bloomberg Law, BroadRiver Asset Management, Omni Bridgeway) as the most credible, current source for the market size for the overall litigation financing industry in the country.
- Specifically, the US litigation financing industry was valued at approximately $2.33 billion in 2019, according to Westfleet Advisors' Litigation Finance Buyer's Guide.
- Additionally, Westfleet Advisors found that approximately 70% of the litigation financing industry was driven by capital allocations to smaller firms.
- By combining these two data points from Westfleet Advisors, the size of the litigation financing industry for small-to-mid-sized firms in the US is approximately $1.6 billion (i.e., $2,330,000,000 x 0.7 = $1,631,000,000).
Market Size Estimate B
- More recently in February 2020, Slingshot Capital published a separate estimate for the litigation financing market in the US within Litigation Finance Journal, which valued the industry at approximately $3.3 billion in the country.
- In parallel, the Legal Executive Institute reports that small and mid-size law firms account for 66% of the revenue generated annually by law firms in the US legal services industry (i.e., ($108,000,000,000 + $73,000,000,000)/($108,000,000,000 + $73,000,000,000 + $95,000,000,000 = 0.66).
- This data from the Legal Executive Institute is corroborated by the latest available information from the US Census, which indicates that small and midsize law firms represent approximately 73% of US law firm payrolls.
- By combining the data points from Slingshot Capital and the Legal Executive Institute, the size of the litigation financing industry for small-to-mid-sized firms in the US is approximately $2.2 billion (i.e., $3,300,000,000 x 0.66 = $2,178,000,000).
Total Addressable Market Estimate A
- Litigation financing firm Omni Bridgeway currently asserts that the total addressable market (TAM) for litigation financing in the US is $85 billion.
- By combining this information from Omni Bridgeway with data from the Legal Executive Institute on the portion of legal services revenue generated by small and medium law firms, the TAM of the litigation financing industry for small-to-mid-sized firms in the US is approximately $56.1 billion (i.e., $85,000,000,000 x 0.66 = $2,178,000,000).
Total Addressable Market Estimate B
- The Legal Executive Institute found that small and mid-size law firms in the US account for $108 billion and $73 billion, respectively, of legal services revenue in the US annually.
- In parallel, the legal expert reported that litigation represents approximately 68% of legal services revenue in the country.
- By combining these two data points from Legal Executive Institute, the size of the litigation financing industry for small-to-mid-sized firms in the US is approximately $123.1 billion (i.e., [$108,000,000,000 + $73,000,000,000] x 0.68 = $123,080,000,000).