Tracking the Highs and Lows in ABS World: Litigation Finance

Happy Friday! How about some ABS highs and lows to close out your week?

I am continuing to track the evolution of non-lawyer investment in law firms.

A few years back, Arizona opened a path for non lawyers to own law firms, a practice that isn’t allowed in most states. Through a public records request, I was able to see some heavyweight new entrants, including a subsidiary of
Franklin Templeton, and a joint venture between Treville Capital and Moelis Asset Management.

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But not in Cali: I also wrote about a bill that was signed into law by Governor Gavin Newsom late last week that bans California attorneys from sharing contingency fees with “out-of-state alternative business structures.” It’s a blow to investors that own stakes in these types of firms in Arizona.

The bill was initially more broad and prohibited lawyers from sharing any fees with alternative business structures. It will only apply to contracts entered into on or after January 1, 2026.

What I’m Reading

Politico detailed a lobbying fight in Washington over litigation funding. The article looks at how opponents — namely, the US Chamber of Commerce and Chubb — have been battling against proponents including Leonard Leo-supported Consumers’ Research, which argues funding is a critical tool to hold corporate America accountable. The feud has included an ad campaign attacking Chubb’s CEO for being “woke.”

A group of attorneys submitted a letter to the Advisory Committee on Civil Rules cautioning against a rule requiring broad disclosure of litigation funding. The signatories on the letter include attorneys from big name firms including McDermott Will & Schulte and Crowell & Moring LLP as well as litigation finance brokers who advise in the space.

Programming note: I will be on vacation next week so there will be a less sparkly version of this newsletter!

Leading the News

Supreme Court’s Patent Drought Leaves Key Debates Unresolved

The US Supreme Court’s refusal to hear new patent cases for nearly three years has frustrated parties that suffer appellate losses and left the Federal Circuit as the final arbiter over legal disputes that divide the patent bar.

Commentary & Opinion

Litigation Transparency Bill Stacks Deck Against Small Inventors

The Litigation Transparency Act of 2025 would give large corporations a fresh weapon to use against small inventors and entrepreneurs.

Protecting Pro Bono Legal Services Is Crucial for All Americans

Large law firms providing pro bono services have faced political pressure, leading some to reduce their public service work. More support from firms, lawyers, and law students is encouraged to keep fighting to represent those who need it the most.