People hurt in a car accidents, alleged victims of police abuse, or victims of faulty products usually sue for justice and compensation. Lawsuits costs a lot of money and can take a long time before they are resolved. While the lawsuits work their way through the courts, the plaintiffs in these cases are burdened by the everyday costs of living. To help them with these costs, a new industry called “legal funding” was born. As it matured and grew, it was increasingly used by plaintiffs’ attorneys to help them litigate cases against moneyed defendants to give their clients a fighting chance in court. Currently, the legal funding industry reportedly generates over $1 billion and is expected to continue to exceed that amount in the future.
The Source spoke to Joseph Genovesi, Co-Owner and President of Thrivest Specialty Funding, LLC a Philadelphia based company that provides legal funding among other services in the alternative finance space.
What is legal funding?
Legal funding is a financial solution for attorneys and plaintiffs who have immediate cash needs, but can’t qualify for a loan. Legal funding works based on a factoring model, which can be used to fund other groups of people besides lawyers and plaintiffs. We purchase a portion of a future receivable (which in this case would be an attorney fee or a plaintiff’s award) and then advance a portion of that to the client. When our client does finally obtain their receivables, we are directly repaid. We recommend legal funding to people who are in a financial bind and need immediate access to their future legal fees or awards.
Is there a difference between litigation funding, lawsuit funding, and legal funding?
For the most part, these are all different names for the same thing. However, these terms are frequently used in slightly different contexts. Legal funding is kind of an umbrella term that encompasses all the different subsets of the space. Lawsuit funding usually refers to plaintiff pre-settlement funding, which is when a finance company advances money to a plaintiff prior to their case reaching a settlement or judgment. Litigation funding, especially in Great Britain and Australia, usually refers to third party commercial litigation funding, where a third-party finance firm advances money to a business involved in litigation so they can better compete with larger, deep-pocketed corporations.
Legal funding doesn’t seem to be mainstream, is it something that is widely used?
Right now, legal funding is still something that’s picking up steam, so attorneys are still getting used to the idea. But it’s been gaining more acceptance in the past few years, with influential states like Delaware and Maine, who previously shunned legal funding, now endorsing the practice. Some of the other services we offer, like real estate commission advances and professional athlete contract advances, are also relatively new to the market.
How does one find legal funding if they are looking for it or need it?
Well, you can always check out Thrivest’s website — we offer funding for plaintiffs and attorneys, and wrote all-you-need-to-know guidebooks for each. You can also do a search online for “legal funding,” but make sure you do your research. Not all companies are the same, and there is a high variance in rates among legal finance firms.
How did your company get started in the legal funding sector?
I partnered with Fintech entrepreneur, Joe Greco, to launch Thrivest as a company that would be focused on all clients who could benefit from a factoring model with a technology spin and a focus on data analytics. We want to make a difference in the lives of our clients. Joe and I both have experience in the legal funding sector as well as alternative finance, and decided to use our combined experience to not only create a better legal funding company, but to also create funding opportunities for all types of asset classes.
According to different news outlets, the legal funding sector seems to be growing at a fast pace. How do you guys keep from getting lost in the shuffle?
We have a great team at Thrivest, which is what I think separates us from the competition. We’re all experienced in the industry and wanted to come together to create a different type of funding company, and everyone has amazing ideas on how to do that. The whole team is heavily invested in the community and in giving back, and we truly want to make our clients’ lives better. We try to be as transparent as possible about our process and about ourselves, because we want to make sure our clients know who they’ll be dealing with and know what they’ll be getting up front. Plus, we offer a range of services beyond what you can find at the traditional legal finance company. We have solutions for attorneys, plaintiffs, small business owners, doctors, real estate agents, and anyone else who could benefit from accelerated payment of their future receivables.
Where do you see the legal funding industry in five years?
I think that the industry is gaining popularity, partially because people are learning more about the real impact funding can have. I see the industry continuing to grow as more trial lawyer associations embrace the practice, more attorneys refer their clients, and more people benefit from legal funding. I’m excited to be a part of that growth.
Thrivest Funding does other things besides legal funding. Can you talk about the other stuff you guys do?
Though a part of our practice includes legal funding, we also offer advances to professional athletes, commission advances to real estate agents, insurance payment advances to doctors, and factoring for small business owners, to name a few. We have the capacity to work with anyone, from nearly any industry, who might experience a delay in receiving a payment.
Since this is a Hip Hop magazine, are you a fan of Hip Hop and if so, who are your favorite artists?
I’ve always been a big fan of Hip Hop. I like a lot of what is now considered “old school,” like Wu-Tang, Tupac and Biggie. I’m also a big fan of JAY Z, Mos Def and Common. Eminem is a guilty pleasure.
Do you like any of the current artists making noise now in hip hop?
I don’t know a ton about Raury, but what I’ve heard, I really enjoy. I also like Future, Meek Mill and Drake.
Aside from Hip Hop, what’s on your playlist now?
I’m into classical and alternative music. My playlist is all over the place, really. It’s like putting Pandora on shuffle. And you’re lying if you claim you don’t like some Taylor Swift.
A lot of kids and students are going to read this interview and may want to get into legal funding and work for a finance company like yours. What should they know or study if they are thinking of making that leap?
You can apply all sorts of skills to a job at a legal funding company aside from those in law or finance. While it’s useful to have some interest in the two, especially if you plan on working directly with investors, banks, or attorneys, we also have salespeople and marketers who speak directly to potential clients or help us get the word out about the business. Our firm also emphasizes technology and data analytics, so those skill sets are also in demand.
