Litigation Funder’s Plan to Invest in Law Firms Called ‘Bad Policy,’ With Big Impacts

By William Rabb | August 21, 2025

The idea is “very troubling,” and raises ethical concerns about where a lawyer’s loyalty would lie – with the client or with the outside stakeholders of the firm focused on profits and big verdicts, said William Large, president of the Florida Justice Reform Institute, an organization that has advocated for tort reform and prohibitions against ownership of law firms by nonlawyers.

Large

Whether it’s legal or not, any type of outside ownership arrangement is simply bad policy, Florida’s Large said. He argued that if allowed, it would threaten the bedrock of America’s justice system. Large, a lawyer himself, compared large-scale law firm ownership by investors to the arrangements that led to the U.S. financial crisis of 2008: Lack of ownership and accountability over the millions of subprime mortgages that were bundled and sold off to investors.

Currently, most law firm partners are, in effect, owners of their firm and are held responsible for the firm’s decisions. But if an outside investor becomes the factotum owner, lawyers may eschew responsibility, encouraging a decline in independence and in the quality of legal representation, Large said.

Outside ownership of law firms “will adversely impact the stability of the practice of law in our state and lead to a slippery slope of problematic issues as more and more nonlawyer entities seek to gain some semblance of control over law firms in the state, with their focus on the bottom line of profitability as opposed to the needs of clients,” Large wrote in a 2021 to Bar committee members who were contemplating the nonlawyer ownership pilot program.

https://www.insurancejournal.com/news/southeast/2025/08/21/836441.htm