Burford drills down on law firm strategy with UK advisory deal

By Sara Merken

Sept 9 (Reuters) - Burford Capital said on Tuesday that it has made a minority investment in London-based legal industry advisory firm Kindleworth, as the litigation funding giant pushes to invest directly in more law firms.

Kindleworth specializes in launching law firm businesses and helping manage their finance, compliance, technology and other operations.

Burford and Kindleworth said the partnership will allow them to support entrepreneurial lawyers and give Burford the opportunity to invest money to support law firms backed by Kindleworth.

The companies did not disclose terms of the deal, which closed in August.

Burford, which is publicly traded in the U.S. and the UK, is among the largest third-party backers of individual lawsuits or litigation portfolios. The company also revealed last month that it is in talks to invest more directly in U.S. law firms.

Chief development officer Travis Lenkner said in an interview at the time that Burford is exploring investing in firms through Arizona's alternative business structure (ABS) program or backing firms via management services organizations (MSOs).

Ethics rules in the United States generally prevent outside ownership by non-lawyers in law firms, although states including Arizona and Utah have in recent years tested out or implemented rule changes. MSOs don't share in a firm's profits, sidestepping the provisions against non-lawyers owning law firms or receiving a cut of legal fees.

In the UK, outside ownership of law firms is allowed through similar ABS arrangements. Burford in 2020 bought a 32% equity stake in UK-based litigation firm PCB Litigation.

Kindleworth, founded in 2012, said it has helped open more than 50 law firms, including Pallas Partners, a London-based firm started in 2022 by a group of former Boies Schiller Flexner partners.