Legalist

Legalist operates as an institutional alternative asset management firm, utilizing data-driven technology to invest in credit assets. The company was founded in 2016 by Harvard University undergraduates Eva Shang and Christian Haigh. Initially, their concept was to create a legal analytics product by scraping court records, but they pivoted to litigation finance after participating in the Y Combinator accelerator program in the summer of 2016. This shift was driven by the realization that their data could be used to identify promising legal cases for investment.

The firm's business model centers on providing capital for legal proceedings and other credit-based situations, generating revenue through the returns on these investments. Legalist serves a diverse client base that includes plaintiffs in commercial litigation, law firms needing capital for case costs, and businesses undergoing bankruptcy. For its own funds, the company attracts capital from institutional investors such as endowments, foundations, hospitals, insurance companies, and family offices. The core of Legalist's operation is its proprietary technology, which employs algorithms to analyze millions of court records to source and vet potential investments. This allows the firm to systematically assess risk and potential returns, a departure from the manual, relationship-based methods common in the asset management sector.

Legalist offers three main investment strategies: litigation finance, bankruptcy (debtor-in-possession or DIP) financing, and government receivables lending. In litigation finance, the firm provides non-dilutive capital to cover legal costs for commercial lawsuits, with repayment contingent on a successful outcome. The bankruptcy financing strategy focuses on providing senior secured loans to companies in Chapter 11, helping them navigate the restructuring process. The government receivables strategy involves financing companies that hold contracts with government entities. The firm has seen significant growth in its assets under management, reaching $1.5 billion.

Keywords: litigation finance, alternative asset management, legal technology, LegalTech, FinTech, debtor-in-possession financing, DIP financing, private credit, institutional investors, investment technology, data-driven investing, commercial lawsuits, bankruptcy financing, government receivables, Eva Shang, Christian Haigh, Y Combinator, asset-backed lending, credit assets, risk-adjusted returns