Litigation Funder Legalist Brings on Ex-judge to Replace Posner as Adviser

Reuters reports on retired US district judge Jeremy D. Fogel's joining Legalist as advisor

Sara Merken
Original Article

(Reuters) - Third party litigation funder Legalist has added former California federal judge Jeremy Fogel to its advisory board, replacing former federal appeals court judge Richard Posner. Posner left Legalist earlier this year for health reasons, the company said.

Fogel was a U.S. District Judge for the Northern District of California from 1998 to 2011, then director of the Federal Judicial Center in Washington, D.C., until 2018, when he became executive director of the Berkeley Judicial Institute at the University of California, Berkeley Law School.

His addition follows Legalist's hiring last month of former Dinsmore & Shohl and Cooley litigator Nic Echevestre as investment counsel and former Revere Capital executive Ryan Leach as head of investor relations.

The San Francisco-based company backs cases that require less than $1 million in funding. Its investment team also includes former litigators from Duane Morris, Gibson, Dunn & Crutcher, and other firms.

Harvard drop-outs Eva Shang and Christian Haigh founded the startup in 2016, differentiating their approach from other funders by using the artificial intelligence and machine learning technology to scrape data from court records to source and underwrite investments. Legalist in June said it has invested in more than 100 litigation matters.

"There are not a lot of players that provide this type of financing," said Shang, who is the company's CEO, explaining that Legalist's tech platform helps the company target lower middle-market deals. Legalist, with an average investment of$500,000, doesn't "get much competition at our end of the market," she said.

Legalist, which was originally backed by Y Combinator, raised $10.25 million in 2017 for its first fund and $100 million in 2019 for a second fund. It says it has received funding applications from 65% of Am Law 200 firms.

The firm's advisory board comprises three members, each of whom focuses on one of Legalist's intersecting fields: tech, finance and law, Shang said.

Fogel joins John Witchel, co-founder of peer-to-peer lending company Prosper Marketplace and former president of web development firm Xcom, and William von Mueffling, president of investment firm Cantillon Capital Management.

"Legalist is a notable example of a litigation funding firm that consistently includes social justice as a meaningful metric in its decision-making," Fogel said in a statement. "Its support has enabled many deserving parties to compete on equal footing in a legal system that often excludes them not because of the merits of their claims but because of the limits of their economic resources."

His predecessor, Posner, the influential former chief judge of the 7th U.S. Circuit Court of Appeals, joined Legalist as an adviser in June 2019. Posner could not immediately be reached for comment.