Cost and pricing consultancy Burcher Jennings has launched a new funding package for law firms, which it believes is “the first of its kind in the UK legal industry”.
Described as a “revolving evergreen facility that can increase in size as the firm grows”, the firm said the package had been developed with an unnamed risk capital provider, backed by an international fund management group.
Martyn Jennings, chief executive of Burcher Jennings, said the funding scheme aimed “to help counter the several long-standing structural challenges law firms face, namely, succession planning, the gradual withdrawal of legal aid and how to secure a competitive advantage by offering clients a wider range of options in terms of pricing”.
Mr Jennings went on: “Whether it is to fund disbursements, costs awards, the work in progress of clinical negligence and other CFA matters, individual commercial cases or just the firm’s day-to-day working capital, it is absolutely essential for any managing partner to have a strong understanding of its firm’s own short-term and long-term funding requirements.
“It makes no sense to us why, if a law firm is growing, it should have to repay its borrowings at a time when it really needs even more funding. That’s what our scheme aims to achieve, namely, a funding facility that can keep on growing.”
A spokesman for the risk capital provider said the funding package offered firms a “real competitive advantage” over their rivals.
“Whilst there are no restrictions on how the funding is applied, firms are already showing considerable interest in using the scheme to fund the new higher court fees, financial remedy proceedings and where they employ partners considering retirement.”
A spokesman for Burcher Jennings said the scheme was available to all firms regulated by the Solicitors Regulation Authority, and the “principal advanced does not ordinarily need to be repaid but, instead, can roll-over for so long as the facility is in place”.
Just Costs Solicitors and Novitas Loans launched a costs advance scheme in 2013 to help law firms bridge the gap between applying for and receiving their case fees.
Costs firm Kain Knight formed a strategic alliance in 2014 with funder VFS Legal to enable law firms to raise finance against their drafted bills.