A $2.8 Billion Funding Market Is Bidding for the Same Litigators You Are

For most hiring partners litigation funding only becomes interesting when it costs them a lawyer. A fifth-year with a clerkship resigns to join a trial boutique a tenth of the size, and the partner who loses them wants to know how that firm could afford the offer.

Part of the answer is funding. Funders committed $2.8 billion to new US cases in the year to June 2025, the first rise in three years, and only a quarter of it went to the largest 200 firms. The rest went to the firms that are now hiring from your litigation group. The funders recruit from the same group, because the people who assess a case for them are usually former litigators.

That is the market anyone hiring litigators is now recruiting in. The profile in shortest supply is the mid-level associate with a clerkship and some trial experience, because the funded firms and the funders themselves want the same person. The rest of this article covers where the money has gone, who it has put in competition for that lawyer, and what an employer can do about it in the brief and the offer.

 

What the 2025 funding numbers show

Two figures from Westfleet Advisors’ March report matter for hiring. Funders committed $2.8 billion to new US cases in the year to June 2025, up 23% after two years of decline, and the 200 largest law firms took 24% of that, down from 37% the year before. Westfleet’s managing partner, Charles Agee, told Bloomberg Law that a dozen or so of the 39 active funders do most of the deploying.

Our own reading is that the money did not leave litigation when it left Big Law. Three quarters of it went to firms outside the Am Law 200 including trial boutiques and plaintiff-side firms that recruit from the same pool you do. Westfleet also reports that about a fifth of new commitments carried insurance, which is one reason a smaller firm can take on a funded case and staff it properly.
For anyone hiring, what matters is that the money is already committed. It is paying for cases that have to be staffed over the next two or three years regardless of what happens in Washington.

 

Funders and insurers now hire from the same litigation pool

Funders price cases for a living, so the people they hire to do it are usually lawyers who have run cases, putting funders in direct competition with your litigation group for the same mid-level associate.

The larger funders have built their investment teams from former Big Law litigators and former federal clerks. Bloomberg Law noted as far back as 2020 that the industry had grown by hiring lawyers out of Big Law to predict case outcomes and price investments.

The insurance market draws on the same pool. Just over a fifth of new commitments in 2025 carried full or partial insurance. The brokers and carriers writing that coverage need lawyers who can read a judgment and a docket, and they look for them in the same places the funders do. Bloomberg Law reported that a number of funder employees moved across to brokerages offering litigation policies in 2023.

The funded firms are the larger competitor, because they hire in volume. Westfleet’s figures show the capital that left the Am Law 200 in 2025 going to firms outside it, including trial boutiques and plaintiff-side firms that already pay at or above the Big Law scale.

David Lat wrote in June 2025 that partners are leaving Big Law for boutiques mainly for autonomy and because Big Law rates have become hard to sell to litigation clients. A boutique with a portfolio facility and insurance on its larger matters can staff a trial team and pay a $180,000 clerkship bonus with more certainty than a firm relying solely on case proceeds.

For anyone briefing a litigation search it is worth knowing which funders and funded boutiques are active in the practice area, because they are likely to be working the same shortlist. It also tells you what shape another offer may take, a published scale from a boutique or a base-plus-carry package from a funder, and the two call for different things in the offer letter. That cuts both ways. A boutique or a funder making an offer is often up against a Big Law group’s class-year credit and bonus memo, so the same homework applies.

 

Has funding changed what litigators are paid?

There is no clear sign that litigation funding has changed the Big Law scale, which Milbank moved in June to $235,000 for first-years and $455,000 at eighth year. The year-end bonus grid has been the same since 2021. If you pay on the scale, your package has been predictable for years. The change is at the litigation boutiques, and it shows up in two places.

One is base pay for mid-level associates. Several boutiques now publish scales above the market, and the highest of them pays a seventh-year $505,000, which is $65,000 more than the scale firms. The other is the signing bonus for a federal clerkship. Three litigation firms pay $180,000 where most Big Law firms that publish a figure pay $125,000, so a former clerk weighing the two offers sees a $55,000 difference before salary even comes up.

Our view is that funding may be one factor in how a boutique can support that model. A boutique’s income comes from a handful of large cases, often on contingency, and a published salary grid has to be paid whether or not a settlement lands that quarter. If a funder or an insurer is covering the bigger cases, the firm can budget for the grid. We cannot say which boutiques use funding, because the agreements are private, so treat it as a feature of the market rather than a fact about any one firm.

The useful news for an employer is that some of the most material differences can be addressed for a single hire. Class-year credit and the clerkship bonus are both set offer by offer, so matching $180,000 for one former clerk does not touch your scale. A $65,000 gap in base at seventh year is a different matter, and we would not suggest trying to close it.

 

Hiring litigators in a funded market

Everyone in this market is after the same lawyer, a fourth- to seventh-year with a federal clerkship and some trial time, and that is also where the pay gap to the boutiques is widest. The good news is that most of what decides a hire at that level has nothing to do with your salary scale. It comes down to the brief and a few terms in the offer letter.

Decide what you are paying for

A clerkship, trial time and a specific class year each shrink the pool, and asking for all three describes a lawyer the funders and boutiques are also chasing. So before anyone starts calling candidates, it is worth working out which of those you need and which you could live without. A good fifth-year without a clerkship is generally easier to find, and for many seats the difference may matter less than it looks on paper.

Be as specific about the work as the boutique will be

Once the money is in range, the work tends to decide it. A boutique’s pitch is early responsibility, and by the time a candidate is weighing an offer they will usually have been told which cases are live and who they would second-chair. You may be able to compete without matching the scale if you can be just as precise about your own pipeline, which partners the associate would sit with and what they would own in year one. A broader platform can be a real advantage as well, with specialists behind the case and somewhere to move if disputes turn out not to suit them, and it is worth setting out in the interview. The boutiques’ own pitch concedes much of this.

Use the terms that move for one hire

Class-year credit comes first. Many firms do not publish their policy, so it is worth putting the class year in the offer letter early, because a former clerk credited a year lower than they expected may have lost much of the premium before signing.

The clerkship bonus comes next. It is paid once, so matching a figure for one former clerk need not affect your scale, and the current figures run from $100,000 to $180,000 at the firms that publish one.

The year-end bonus memo is the third. It decides a lateral’s first year through its hours threshold and payment date, and if the candidate is leaving a firm that pays in January, a signing payment can make them whole.

Each of those is generally cheaper than a base increase, and they tend to come up early in a negotiation.

Widen the pool to lawyers who have worked in funding

A funder’s investment team spends its time reviewing other people’s cases, deciding which ones are worth backing and on what terms. A lawyer who has done that for two or three years has seen far more matters assessed than most associates see in a decade, and they know what a funder looks for before it commits. For a litigation group that takes funded or contingency work, that experience helps with the parts of the job most litigators learn slowly, such as budgeting a case, judging whether a claim will attract funding and negotiating the terms if it does.

There are things to check. They may be two or three years away from the day-to-day of running a case, so recent deposition or trial time will be thinner than a peer who stayed in practice. That matters more for some seats than others. If you are running a search, it may be worth asking for that pool to be included and deciding up front how much weight to give the gap.

Plan the search around the bonus calendar

Timing is awkward this fall. The year-end bonus grid will likely be released in November, but firms pay it on different dates. Some pay in mid-December, some on December 31 and some not until January or February, and at almost every firm the associate has to be employed on the payment date to receive it. A candidate who resigns in November to start in December may be walking away from a material year-end bonus, and most will not do that for an offer that is otherwise close.

That leaves an employer two options. The first is a January start, which lets the candidate collect the bonus they have earned and begin a clean hours count with you. The second is a make-whole payment written into the offer, which costs more but keeps an earlier start on the table. Either way it is worth finding out the current firm’s payment date before the offer goes out, because it decides which of the two you need. The payment dates and hours thresholds at the main scale firms are set out in our bonus scale guide.

The same applies to how the first year is treated on your side. Some firms prorate a mid-year joiner’s bonus by months worked. Others set a cut-off date after which a new associate receives nothing for that year unless it was agreed at the offer stage. A candidate comparing two offers in the fourth quarter will usually ask about this, so it is better settled in the letter than negotiated after they have accepted.

The 2027 clerkship figures are settling at the same time, with Munger’s $180,000 announced on October 1. If you are hiring a former clerk, the figure you offer is being compared against that number from now on.

 

Hiring litigators with Larson Maddox

Larson Maddox is a specialist legal and regulatory recruitment firm. Our private practice team partners with law firms across the US on associate and partner hiring, including litigation searches at every level from mid-level associate to partner.

If you are planning a litigation hire, our consultants can advise on the current market for the profile you need and on how to position an offer. Request a call back or submit a vacancy and a member of the team will contact you to discuss your requirements.

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