Alternative Litigation Finance, Part I: The Waiting Game—The Economics of Fiduciary Litigation Practice
Trust and estate litigators often struggle with one critical aspect of a successful practice—getting paid.
Although payment is a common cause of distress for many (if not all) lawyers, obtaining timely and consistent payment of monthly bills is particularly challenging for litigators with trust and estate cases. The reasons are numerous: illiquid estate assets, a recalcitrant personal representative, outstanding trust or estate liabilities, disputes with the IRS, or perhaps pending litigation or required court approvals. Each of these can cause major delays or total roadblocks in receiving distributions from the trust or estate to pay legal fees. Or, perhaps a beneficiary wishes to bring a contest in a jurisdiction where the trust or estate corpus cannot be used for legal fees until the claims are proven. Often the beneficiary is entitled to an eventual disbursement of trust or estate funds, even if the litigation is unsuccessful, but in the short term the contest results in an inability to pay fees for the litigation work.