We’re often asked two questions: “What’s the best way to get my case funded?” and “What do you need to evaluate my case?” The answer to both questions is the same: present your opportunity in a succinct, cogent memo that reviews the key factors litigation funders consider when deciding whether to back a case. 

Your memo can advocate for your case, but it shouldn’t overlook key challenges (every case has them). Here’s how you can structure your memo to create a compelling funding package. Below we include a full checklist for your use.

The Executive Summary

You should include an executive summary that serves as a gateway to your funding package, offering a concise overview of the case and your funding request. A well-crafted executive summary grabs the attention of potential funders, providing them with a compelling rationale for further consideration of the funding request.

The Facts

A detailed review of the facts underlying the dispute is indispensable in any funding package. This section should provide a clear and objective account of the events leading to the litigation, including relevant contracts, transactions, and communications. By presenting a thorough and dispassionate understanding of the factual context, you’ll enhance the credibility of your funding proposal.

To expedite the funder’s review process and show you have your house in order, you should also attach the most relevant primary documents as exhibits. If it’s a breach of contract case, include the contract. If the parties exchanged correspondence about the dispute, share that too. 

And don’t forget to tell us the basics about the parties: who are the plaintiffs and the defendants, how did they meet, where are they incorporated, and so on.

Jurisdiction and Procedure

Navigating the procedural intricacies of the legal system is essential for successful litigation. In this section, litigators should outline key procedural aspects of the case, including jurisdictional considerations, venue selection, and likely time to resolution. (LexMachina is an excellent source for information on duration. To learn more about how to use data as part of your litigation strategy, check out these two blog posts from guest contributor Adam Feldman.) 

Address any potential procedural challenges or complexities, to show you’ve thought through these issues. For example, if you file in your proposed venue, will the defendant attempt to transfer the case or advance a forum non conveniens motion?

If your case is already on file, tell us about the procedural posture. Who is the judge? What’s happened in the case so far? Include all the relevant history, even the parts less favorable to you. Your case survived a motion to dismiss but lost a motion for preliminary injunction? Don’t tell us only about the motion to dismiss. We’re going to find out eventually about the PI motion, and omitting it could undermine your credibility.

Finally, if your case is on file, you should attach as exhibits or upload to a data room the principal pleadings in the case, including the operative complaint, key motion briefing, and any dispositive or especially important rulings from the judge.

Legal Analysis

Here is the heart of your funding memo: a comprehensive legal analysis that scrutinizes the merits of the case. Litigators should delve into relevant legal principles, precedents, and statutes, assessing the strengths and weaknesses of each legal claim asserted. Articulating a cogent legal strategy and addressing potential counterarguments can bolster the persuasiveness of the funding request, showcasing your expertise and strategic ability.

As part of your legal analysis, present not only your affirmative case but also anticipated defenses. How do you expect the defendant to respond to your arguments? Will there be any counterclaims? Are there statute of limitations or laches issues that the defendant may raise?

Finally, if you’re bringing a patent case, be sure to review some of the considerations specific to patent matters, which we discuss elsewhere in this blog post. 

Damages and Collectability

This section may reside deep in your memo, but it’s often the first section a funder reads. The strongest legal case in the world won’t make a case fundable if there are no damages or the defendant isn’t collectable. 

First, with respect to damages: An assessment of potential damages is pivotal in evaluating the financial viability of the litigation. This section should quantify the economic harm suffered by the plaintiff, taking into account factors such as lost profits, diminished business value, or any other relevant quantum of damages. Be sure to include legal analysis of why your proposed bases for damages may be awarded. If there is a contractual limitation on liability, discuss how that might limit damages. Ideally, your memo will include a third-party damages analysis as an exhibit, showing that your damages model has been validated by a third party.

Second, with respect to collectability: This is perhaps the single item most often overlooked by litigants and lawyers seeking funding. Particularly if the defendant is a small company or an individual, funders need an assessment of whether the defendant has assets that can be collected. Funders generally shy away from funding cases that will need intensive asset enforcement efforts after the conclusion of the primary litigation.

The Funding Request

Finally, your funding package should have a clear and consistent statement of the financial support you seek from litigation funders. The funding request should independently identify the amount of funding sought for legal fees, case expenses, and working capital (if any). Ideally, the funding request is accompanied by a detailed budget, setting out the anticipated use of funds by stage of the case. 

The funding request should also identify how much risk sharing the lawyer and litigant will provide. Most importantly, litigation funders customarily prefer for law firms to discount their fees by about 50% in exchange for a contingent upside in the case. The lawyers’ willingness to put their fees at risk provides an important signal to funders and their investors that the lawyers – who are closest to the case – believe in the case’s merits.

You should also include a copy of all other relevant financial documents for the case, such as any existing attorney retainer agreement or prior funding agreements. 

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Comprehensively set out the basis for your claim; clearly explain the damages, collectability, and funding request; and maintain clarity and objectivity throughout your memo. By creating a well-crafted funding package, lawyers and their clients can maximize the likelihood that they will secure funding, which should in turn increase the probability that they will win their case.

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A checklist on what to include in your litigation funding memo:

• Executive Summary
• Facts
  • Name and description of the parties
  • Name and description of counsel
  • Recitation of the principal facts of the dispute
  • Exhibits containing the principal pieces of evidence (e.g., contracts)
• Jurisdiction and Procedure
  • Jurisdiction and venue analysis, including estimated time to resolution
  • If case is on file, highlight the principal developments to date
  • Exhibits containing any significant pleadings, briefing, and decisions
  • Analysis of actual or anticipated jurisdictional or venue objections
• Legal Analysis
  • Analysis of the legal issues relevant to the case
  • Analysis of potential defenses
  • Analysis of potential counterclaims 
  • Discussion of any statute of limitations or laches issues
• Damages and Collectability
  • Damages estimate and model
  • Legal analysis of bases for damages
  • Collectability analysis
• The Funding Request
  • Total funding request, including fees, costs, and working capital
  • Risk sharing to be provided by the law firm and client
  • Copy of relevant financial documents, e.g., retainer agreement and any prior funding agreements