Businesses are increasingly turning to litigation finance to fund commercial lawsuits. The practice transfers risk to third parties and moves high legal fees off a company’s balance sheet. Charles Agee, founder and managing partner of Westfleet Advisors, discusses the maturing litigation finance industry. Agee estimates that more than half of Am Law 200 firms have had clients use commercial litigation finance.

Standards are emerging across litigation finance contracts, according to Agee. For example, funders are always passive financiers who don’t get to control litigation strategy. But despite rising awareness of litigation funding, the industry lacks transparency and usage data. The industry is also not without its opponents—the U.S. Chamber of Commerce Institute for Legal Reform has called for mandatory disclosure of litigation funding arrangements.

Litigation finance is increasingly a business development tool for law firms. Agee discusses how firms have an opportunity to educate clients on the benefits of using litigation finance and deploy it internally as a source of capital.