Law firms and corporate clients are increasingly embracing third-party litigation funding as a strategic tool. Despite a recent dip in new deals (U.S. funders committed about $2.7 billion across 353 new deals in 2023, down ~14% from 2022) Source, the overall trajectory is upward. Industry data shows 39 active legal finance funders managing $15.2 billion in assets as of last year Source. Global projections are even more striking – the litigation funding market is expected to quadruple over the next decade, reaching roughly $60 billion by 2037 (up from ~$16 billion in 2024). This growth is fueled by a steady rise in legal disputes and greater acceptance of outside funding to shoulder legal costs.
Clients are also driving this trend. In-house legal departments, facing budget pressures, want their law firms to share risk. Surveys find 62% of general counsel expect more cost- and risk-sharing solutions from law firms, and over half say it’s important for firms to advise them on funding options. In response, even traditionally defense-oriented firms are expanding into contingency-fee and plaintiff-side work – often with the help of litigation finance to bankroll case costs. By leveraging outside funding, firms can pursue high-value cases without straining their cash flow, while offering clients flexible fee arrangements.
In the personal injury arena, legal funding has evolved from a niche service to a mainstream financial strategy. There are now 200+ companies providing pre-settlement advances and medical lien funding to injury claimants Source. This growth has transformed consumer legal funding into an investment-grade asset class, evidenced by over 25 securitizations totaling $2.7 billion of invested capital since 2018 Source. In practice, these funding solutions give injured plaintiffs the breathing room to wait for a fair settlement instead of accepting lowball offers due to urgent financial needs Source.
For law firms, the maturation of plaintiff funding means more reliable and faster funding processes. Typical advances cover 10–15% of an expected case’s value, often delivered within days Source. This non-recourse capital (repaid only if the case succeeds) helps level the playing field for individuals, allowing attorneys to fully litigate a case while clients meet living or medical expenses Source. The influx of institutional investors and capital into this space underscores its stability – and signals to personal injury firms that partnering with reputable funders can be a smart move to support their clients and growth.
Another game-changer for litigation practices, especially personal injury and mass tort firms, is the rise of legal technology and AI. Modern law firms are leveraging AI-driven tools to manage the mountains of documents and data involved in litigation. For example, specialized platforms now use artificial intelligence to analyze medical records, insurance files, and legal documents at high speed, flagging key facts or even missed injuries that humans might overlook Source. One notable legal tech startup recently raised $60 million in funding for an AI platform tailored to plaintiff-side litigation – backed by major venture firms, including a legal industry leader – highlighting the momentum behind AI-first legal solutions Source. These tools can summarize thousands of pages in seconds and generate draft narratives with source-cited accuracy, dramatically reducing the time lawyers spend on preliminary review.
Importantly, legal AI is moving beyond just efficiency; it aims at better outcomes. By quickly spotting inconsistencies or strengths in evidence, technology helps attorneys build stronger cases faster Source. Some personal injury firms report faster case resolutions and improved settlement values when combining human expertise with AI insights Source. Embracing such tech doesn’t replace the lawyer’s judgment – instead, it augments a firm’s capability to handle more cases and complex data, which can be especially valuable for contingent-fee practices. In short, tech-enabled case intelligence is becoming a differentiator for firms looking to maximize results for clients and make their litigation pipeline more efficient.
For attorneys and legal professionals, these trends highlight a new era of tech-enabled, financially savvy litigation practice. Law firms that harness innovative funding models can take on meritorious cases without fear of budget strain, while offering clients creative fee structures and financial relief. Meanwhile, those adopting advanced legal tech can process cases faster and more insightfully, turning data overload into strategic advantage. The convergence of funding innovation and legal technology is ultimately about empowering firms to litigate smarter – delivering justice for clients more effectively and sustainably. In a competitive market, staying informed on these developments isn’t just thought leadership for a Friday discussion; it’s becoming integral to how the next generation of successful law firms will operate.