Too often, legal departments are on their heels defending litigation and managing unwieldy litigation budgets. Legal departments can generate an ROI for their companies by engaging in affirmative litigation. But who has the budget for that?
At 20 years old, Eva Shang figured out how to turn litigation into investment returns and is now running a tech-enabled investment firm focused on litigation funding. Legalist, the company she co-founded with Christian Haigh at Y Combinator, now manages $1.5 billion in alternative investments in litigation funding, bankruptcy, and government receivables. In this episode, Eva, now the firm’s CEO, shares how litigation funding works, how Legalist’s “truffle sniffer” technology sources litigation cases for her team of in-house attorneys to underwrite and evaluate for investment. Eva shares insights on how to evaluate cases and “pick a winner”, how to get litigation counsel to set and stick to a budget, and how her team that a “win” will be collectable at the end of the day.
And as a bonus, Eva shares insights of what the CEO wants from their lawyers. Turns out, mitigating risk isn’t at the top of the list.
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Listen to the podcast here
Lawyer Math, Truffle Sniffing And Other Lessons From Litigation Finance Eva Shang, Co-founder & CEO, Legalist
On this episode of the Legal Department, I’m really excited to welcome Eva Shang. She is Cofounder and CEO of Legalist, which is a tech enabled investment fund. They focus on Litigation Finance, which is where we’re going to spend the majority of our time, government receivables and bankruptcy. We’re going to hear a little bit about her background too. She’s a real phenom, I think is the word I used to describe her. Eva, how are you?
Thanks for having me.
I just refreshed myself reading The Wall Street Journal profile that was done on you a couple of years ago. I want to just talk a little bit about your background because it is super interesting. I want to get also to the core topic, which is Litigation Finance. Tell us how you came about starting a Litigation Finance investment firm after dropping out of Harvard.
Harvard Dropout To Litigation Finance Disruptor: How Legalist Began
Of course. My cofounder, Christian, and I wanted to start a company while we were at Harvard. Initially, we were planning on starting a legal analytics company. Christian was downloading the entirety of the Massachusetts State Court website. We got into Y Combinator, all bright-eyed and bushy tailed and wanting to do our legal analytics company.
The general counsel of Y Combinator basically pulled us aside after the very first day and said, “Lawyers hate to pay for things. If you want to get on a lawyer’s good side, don’t make him pay for anything. Instead, give him a way that he can get paid for things. Along that vein, have you heard of this emerging asset class known as Litigation Finance?” Seeing as we were undergrads, we had not.
Litigation Finance was experiencing a resurgence in roughly 2016. It had just come over from the UK and everyone in the US legal scene was talking about it, at least in the plaintiff’s bar. We basically took a look at our technology and said, “Can we use this technology to create a really successful Litigation Finance strategy?” That’s how we went down this rabbit hole and it got to where we are now.
I think there was a quote that you shared from the general counsel of Y Combinator that Litigation Finance is like insurance for plaintiff’s counsel because plaintiff’s counsel has to come out of pocket. They’re really taking these bets. Many of the firms don’t have a lot of capital to finance a lawsuit. That’s where you come in.
Litigation Finance & In-House Counsel: Unlocking Hidden Value In Affirmative Litigation
Yeah, that’s right. To take a step back, Litigation Finance is an investment practice where the underlying investment collateral are the proceeds from a litigation case. Now, people who aren’t familiar with it often ask us, “Do you only do Litigation Finance for the plaintiff side or do you also do Litigation Finance for the defense side?” We usually say there’s only a positive contingent asset on the plaintiff side. On the defense side, you usually just have a contingent liability. There’s not much that really can serve as collateral.
The similarity between Litigation Finance on the plaintiff side and insurance on the defense side are manyfold. First of all, we’re repeat players. Just like the insurance firm on the defense side, we see many thousands of cases and we are involved in many thousands of cases. We can serve as a check on the amount a lawyer is spending, the budget, we can serve as a third-party underwriter on the value of a claim, and we can help get everyone on the same page about what the claims should settle for. More importantly, both Litigation Finance and insurance defense focus on valuing a litigation claim and then deciding how much you need to advance against it on the plaintiff’s side, or they should charge and insurance premiums on the defense side.
I think it’s fascinating and the show is really focused for in-house lawyers and general counsel. I have been trying to encourage folks in my role to consider affirmative litigation. In the in-house role, you tend to be on the defense 99% of the time. I think when we spoke before, I shared I’ve had some success on the plaintiff’s side. I’m pumped up about that. A lot of my colleagues will say, “I don’t have the budget. I need to keep my outside counsel budget to fund the defense,” or, “I don’t have the time.”
Talking with someone like you who can share how Litigation Finance works and why we might want to consider it is really helpful. Let’s get a little more granular. It seems to me that there’s probably three parties in a Litigation Finance transaction, the plaintiff or the claimant and the counsel, and then you all. How do those different parties work together?
Legal Funding Dynamics: Understanding The Plaintiff-Lawyer-Funder Relationship
You can think of the plaintiff as the ultimate owner of the claim, the lawyer as the primary case manager and then the litigation funder is just an investor, like a passive investor who funds the legal bills on an ongoing basis and then receives some recovery when the claim settles, but is otherwise not a primary party to the litigation itself.
You hit the nail on the head when it comes to the benefits of litigation funding. There are some companies or plaintiffs who just don’t have the money to pay for a lawyer at all. As you know, there are certain types of litigation where lawyers actively take the case on contingency, class actions, personal injury, employment cases. There are other types of cases where you would be really hard pressed, even for the best case in the world, to find a lawyer to take it on contingency. Commercial cases, breach of contract, anything that’s really bespoke and would require a lot of time for a lawyer just even to get up to speed, they’re usually not going to make a practice out of taking them on contingency.
If you have a breach of contract case, or if you have a business tort case, or if you have some other type of case that requires sophisticated commercial counsel, you have to come out of pocket. Litigation Finance fills that gap. When we get into a case, usually the plaintiff has already done some starting of the litigation. Maybe they’ve filed a complaint and survived a motion to dismiss. Maybe they’re further along in discovery.
Along the way, they’ve come to realize that this is going to go on for a lot longer than they initially thought. If you’re a good plaintiff, this usually isn’t like a known timeline for you. A good plaintiff is someone who doesn’t usually get into affirmative litigation. A good plaintiff is someone who maybe got screwed by a vendor or an investor or a contractor, and they have this affirmative piece of litigation that’s probably worth in the single digit or double-digit millions in your case a lot more and says, “This is really valuable. This is really material to my company, but for whatever reason, it just would not make sense for us to invest money towards legal fees when we could be investing money towards the growth of our business,” especially when it’s a contingent asset that’s a one-time thing.
A good plaintiff is someone who doesn't usually get into affirmative litigation. Share on XThat’s really where litigation funders come in. A litigation funder can only manage the attorney and the litigation process for you, but we can also take full responsibility for paying the legal fees every single month. Now when we come in, we also do usually require that the attorneys take some portion of the case on contingency. The attorneys are usually the closest to the case. We’ll say to them, “I know you normally bill $1,000 an hour, but you have to discount by 30% and then we’ll make it up to you on the backend.”
Just like us, let’s say that your usual billing rate is $1,000 an hour. You’re discounting by $300. That $300 maybe can turn into a 5% stake in the case or a 10% stake in the case, or you can just get it back with a multiple at the end. In our ideal litigation funding scenario, plaintiff, attorney and funder are all equally aligned towards driving towards the best possible settlement or judgment outcome.
In our ideal litigation funding scenario, plaintiff, attorney and funder are all equally aligned towards driving towards the best possible settlement or judgment outcome. Share on XThat said, the plaintiff and the attorney do occupy a different stature than we do. They’re the ones directly involved in the case. We’re not going to be invited to the mediation, for instance. We’re not going to be invited to the settlement conference. As a result, there are decisions that have to be made that don’t involve us. From a funder’s perspective, the best that we can hope for is that everyone is aligned and that the funder, the plaintiff and the attorney will all be happy at the end with whatever the settlement outcome is.
You mentioned you don’t have these frequent claims. You have a dispute with a vendor or contract dispute, etc. I’ve definitely been in that seat where you’re thinking, “The recovery’s maybe not that much. It’s another hassle. I’ve got to allocate another part of my budget from it.” Nobody at the company’s necessarily burning to chase this down. There’s like this fatigue, like, “Okay, whatever.” Having an option where you don’t have to burn that legal budget might get people to change their mind about these claims.
The other thing, and we’ll get into a little bit more is one of the things that’s special about your company is the technology that helps to gauge the validity and collectability of cases before you go forward. I want to get into that, but you mentioned that litigation funders have skills or ability to help manage counsel and that’s something I want to understand better because in the insurance relationship, yes and no.
I’ve had mixed experiences with insurance companies. They’ve got adjusters who may have been a lawyer at one point. Sometimes, from my perspective, they’re just stingy. You’ve got to convince them to do something. I find varying degrees of value added from insurance company participation. Talk about how a litigation funder can be a value add.
Mastering Legal Budgets: How Litigation Funders Manage & Align Incentives
It probably is going to be less stark for someone like you who’s a sophisticated in-house attorney already, but for a lot of plaintiffs we see the primary value add being that we know how to speak an attorney’s language. I’ll never forget a conversation I had when we first started the company where I was having a call with the attorney involved and I asked him, “What do you think the realistic damages are in this case?” He said, “$4 million.” I said, “Okay, seems reasonable. What do you think the budget of the legal fees will be?” He said, “About $2 million.” I was like, “That is an insane ratio. I can’t believe you’re even sitting here calmly talking to me about litigation funding. It doesn’t even make sense for your client to pursue this claim.”
He was like, “Yeah, I agree.” It was one of those situations where it became really clear that the lawyer was just being paid by the hour, that they were not aligned and that they just didn’t really care all that much or worse, that they were actively hiding this fact from their client in order to get their client to spend as much as possible for as long as possible. When we come into a situation like that, the first thing we’ll say is, “Assuming the damages are $4 million, is that true?”
Oftentimes, this is not true. In this case, it was true because $4 million is very reasonable. We have a joke internally that if you added up all of the $1 billion cases that we got on an annual basis, it would surpass the US GDP. Everybody thinks they have a $1 billion case. The truth is that not that many people have $1 billion cases. We can usually double check the $4 million damages figure.
When it comes to the $2 million legal fees figure, this is also something that a lot of clients have trouble wrangling out of their attorneys. If you ask an attorney, “How much is your case going to cost?” The attorney will say, “It really depends. It depends on what the other side does. It depends on how much of a fight they put up during discovery. It depends on whether there’s some interlocutory appeal. It depends on whether it settles here or later. It just depends on so many things. I can’t possibly tell you.”
Those lawyers are so slippery.
That’s one of the things that plaintiffs have just gotten used to. I will tell you, we have made over 500 investments and in every single one of those 500 investments, we have gotten the lawyer to commit to a fixed budget with fixed milestones and they can’t access funding until it’s past that milestone. They have made a commitment contractually to prosecute the case according to those milestones. They can’t withdraw just because a certain portion of the case is more expensive than they originally thought.
Whether you can monetize your tech and your investments, if you could scale that expertise and share it with people in my type of role, you’d print money because that you’re exactly right. There’s always the excuses, the variables and the choose your own adventure on how the case is going to go. That’s going to drive the legal fees. If you don’t mind sharing, how do you get them to commit to those budgets and milestones?
That’s part of the incentive alignment part. The attorney has to be incentive aligned, even if they’re not a contingency attorney. If you tell them, “If you manage to resolve this case favorably, whatever fees you defer, we’ll make it up to you on the backend.” Now all of a sudden, especially if the funder’s recovery comes ahead of them, they’re going to be a lot more likely to litigate it in a reasonable fashion to make sure the amount of money that comes ahead of them isn’t too significant.
It all comes down to economics at the end of the day. Our first general counsel who taught me everything that I know and trained me to be a lawyer, he would call a couple of things lawyer math. One would be split the difference. You come in at $10 million and then the other side’s at $1 million, so you split the difference at $5 million. That’s lawyer math. The second thing that’s lawyer math is whatever gets them more money will end up being somehow mysteriously the preferred path that they want to go down. If you can just work along the lines of lawyer math rather than trying to fight it, I think it just goes better for everyone.
I feel a little exposed, but yeah, your general counsel is right. Most of us chose law because we couldn’t do math, so we take the simplest approach that is the most favorable, for sure.
One of the other things that they taught us was that there’s a reason why the more complicated cases go on for longer. Defense counsel usually has a rule of thumb when they’re billing, and that is your client will be upset with you if you bill more than one third of the ultimate settlement amount. If the damages are super high, then defense counsel has a lot of leeway to just bill and bill until they hit the one third mark. If the case itself is only worth, let’s say $1 million, then they can only bill $300,000 before it starts to ruin the client relationship. That’s one of the other things that we take into account when we’re funding a case. How long is it going to take? How long is a defense counsel going to be able to reasonably bill for?
Defense counsel usually has a rule of thumb when they're billing, and that is your client will be upset with you if you bill more than one third of the ultimate settlement amount. Share on XYeah, that’s really very interesting and I think your GC was really smart to share that because it’s absolutely the case, I think. As you were talking about aligning incentives, I’m thinking a lot about alternative fee arrangements and other proposals. I think that in-house people shy away from them because they seem complicated and they seem like, “Is it really going to work?” It sounds like your business proves that it does.
Litigation funders are also repeat players and so we can bring the credibility of saying, “We’ve done this 500 times and every one of the other 500 attorneys has agreed to it. I just don’t believe that you can’t persuade your firm to do so.”
It’s funny because on the insurance company side, which I’m just making a correlation here, I don’t think they manage council in the same way, like on an incentive basis. It’s more like sticks, like this is your panel rate and they do get the council to put in budgets, etc., and they just hammer on bill review and stuff. If I was outside counsel, it would be much more painful than working with a litigation funder that’s trying to incentivize me to keep my costs down.
I think that because the defense side, it’s all contingent liabilities, you have a much more limited set of tools to work with. When there’s a pot of money at the end and affirmative litigation, it’s possible for everyone to go home happy.
The Secret Sauce: How Legalist’s “Truffle Sniffer” Tech Finds Winning Cases
Let’s talk about those good days and how you pick a winner. You and Christian developed technology that you’ve called the truffle sniffer. I am so interested in this for many reasons, but one of the difficulties that I have managing a litigation portfolio is knowing what’s a good case. What are the cases I should fight? Is the counsel good counsel? Can we talk a little bit about how the truffle sniffer picks the winners and is there anything I can learn from that managing my own litigation portfolio?
Yeah, absolutely. It’s really important to highlight that the truffle sniffer only originates for us. It doesn’t actually pick the winners. It would be actually impossible for technology to pick the winners because you could have a winning $1 million case that you can invest $10 million into, that would be a losing investment.
The way that our process works is that we are trying to do Litigation Finance at scale. That’s what differentiates us from many of the other litigation funders out there. The conventional, traditional method of litigation funding before Legalists came into the space focused on a portfolio of maybe 10 cases in say a $100 million fund. Each of those 10 cases you would manage very closely have $10 million invested into each. You’d be looking for a truly unicorn scenario where one of the cases hits it out of the park.
Now by contrast, Legalist has made, as I’ve mentioned, 500 investments. Across those 500 investments, we’ve already had 200 realizations. In those 200 realizations, we have roughly a 70% to 75% success rate. We don’t expect to have a perfect success rate because in any litigation, there’s an unknowable factor. The unknowable factor is often is the judge or jury going to view my case sympathetically? Is my client going to present well in his deposition? Things like that, which are outside of our control.
What the truffle sniffer does is in order to originate thousands of cases per year, for us to fund 500, it has to do a very wide and broad search of state, local and federal court dockets to look for cases that look like they’re already on their way to success. What that means can be very different for each type of case. A few of the case types we cover are commercial litigation, including breach of contract and business torts, but we also cover things like class actions.
In class actions, you might be looking for cases that have survived class cert in breach of contract or business torts, depending on the court, the judge, the case type, you might be looking at cases that have survived motion to dismiss or motion for summary judgment. There are really two types of variables it looks for. There are static variables, so variables that are set from the beginning, whether that’s the attorneys involved, the parties, the judge, or it could be a time series variable. A time series variable refers to the things that actually take place in a case. If you’re an attorney and you were to take a look under the hood, you wouldn’t be surprised at any of the rules that we’ve put into place.
What we’re trying to do is we’re trying to codify the things that an attorney already knows. An attorney would already be able to tell you a case that survives class cert, that class action is going to settle. That’s something that we can do at scale and that allows us to find cases which are off the radar, reaching out to attorneys that are involved in those cases and saying, “Does your client need litigation funding?”
That results in about 5,000 intake calls per year that our team takes. Of those 5,000, we fund about 100 actual investments. The thing is, once you take those 5,000 intake calls, you actually have to enter into a bilateral credit agreement. It’s not like a stock where you can just buy and sell at will at whatever price is available on the market.
Let’s say we take an intake call with an attorney. The attorney says, “Litigation funding does sound pretty interesting. Let me talk to my client Stacy about it. I know that she’s been interested in using it for some time.” At that point, we might enter into a negotiation over a term sheet and our underwriters will determine how much should we actually offer on the term sheet. As I mentioned, any case can be made into a losing investment if you invest too much money into it.
After the term sheet signed, the underwriter then goes into a really deep diligence process and they’re looking for three things that make a winning case. One is liability. Is the case actually going to be successful? Is it going to survive any remaining motion hurdles? Is there actual proof of wrongdoing by the defendant?
Second is damages. Damages, like I mentioned, is a really key factor. Although it’s not always completely clear that there is one damages figure, there could be competing expert reports or let’s say it’s an earnout scenario. The truth of the matter could be somewhere in between the defendant’s position and the plaintiff’s position. It could be a case where the maximum damages are $20 million, but base case is something like $10 million. Worst case is only like one. We have to make that assessment and price our capital investment accordingly.
Finally, and this is the part that everyone always forgets about, is collectability. Collectability is really important because if you get a $100 million judgment against a company that’s gone out of business, then, great. This is something that we actually find lawyers, underwriting attorneys that we hire for this role struggle with the most. They’re just not very used to thinking about is a defendant going to be collectible, especially if they come from a firm.
At a firm, you just don’t think about that. It’s not part of your job description. We’ve really found that in the first few memos, any new investment counsel rights, that’s always where I look first at the collectability section because that section is guaranteed to be the weakest. They just don’t have the training for it.
Do they do like an asset search? How are you assessing collectability?
It’s usually not that complicated. We’re looking for litigations that are decently sized in comparison to the defendant. If you say you have $100 million case but the defendant only makes $100 million of revenue, then you’ve really got a problem on your hands. A lot of private companies, revenue numbers aren’t public. You can just look at the gist of it. Are they trending up? Are they trending down? Do the principals involved have assets? We tend to find that liability and collectability are inversely correlated to each other. The more certain it is that someone stole money from you, the less likely they have any collectible.
Liability and collectability are inversely correlated to each other. The more certain it is that someone stole money from you, the less likely they have any collectible. Share on XThat’s interesting. I wonder if that’s part of the early discovery. It we didn’t really dig into this, but as I understand it, the fund invests not usually at the outset of a case, but after there’s been certain milestones. I wonder, from a discovery standpoint, if the plaintiff’s lawyers are asking about assets of the defendant during the discovery process.
Yeah, that’s something that does inform whether we enter into a case or not. The later stage of cases, the more likely it is that they have information on collectability, etc. Sometimes, it’s not as complicated. For instance, in an earnout scenario, a lot of times the company that got bought does have information on how much money they brought in. That must still be there. Sometimes that information could be a little bit dated, but it’s really up to the discretion of the underwriter to determine whether they feel comfortable enough with the available information to proceed.
Let’s talk more about underwriting and again, the truffle sniffers, that originator, I understand that better now. You do have a team of lawyers. I can’t remember how many, 30 or so lawyers that are working for you now.
We have a team of 40 and there are many people who are lawyers within the company. On the Litigation Finance underwriting team, we have our portfolio manager and a team of three attorneys.
Underwriting Winners: Legalist’s Deep Dive Into Liability, Damages, And Collectibility
How does the underwriting work? Is it a mix of tech and human? Honestly, I need to understand this for myself. Not just when I want to be a plaintiff, but as a on the defense side, how do I better evaluate my cases?
The underwriting attorneys will usually ask for a portfolio from the litigating counsel of what they call hot docks. Usually in discovery you get just a boatload of materials. Too many materials. What the underwriting counsel will say is, “Tell me the theory of your case and then show me, walk me through each of the claims and the evidence that it relies on.”
The type of case that we really don’t like that I think inexperienced counsel tend to go for is I’m sure you’ve heard this, it’s called a kitchen sink complaint. Where they put in every possible claim under the sun. Those actually make it harder for us to underwrite because you’ll have 10 weak claims and then 1 really strong claim, but it’ll look like they’re full of BS.
That’s why I think sometimes it’s very really helpful for the litigating counsel to walk us through their theory of the case and which of the claims they think is the most important. What we found is that someone who defaults to a kitchen sink complaint usually doesn’t have a super robust theory of the case. That the more incisive, clearheaded, litigating counsels will maybe include just a few causes of action that they think are reasonably strong. That’s the first step.
You said earlier you’ve worked with a lot of different counsel that you’re funding. Do you get a sense on who’s good and who’s not good? A lot of people have a shiny thing, a kitchen sink complaint, an attractive plaintiff, etc., but who’s got the goods, who can deliver.
Some of that is qualitative and some of that is quantitative. If we’ve funded someone in the past or we can see from their docket and information that we have that they’ve done litigations in the past like this, then of course that makes them more credible. A big part of it is also just our underwriting counsel speaking to them doing an interview and saying can they explain cogently to me a third party what this case is about? If they can’t, then they certainly can’t explain it to a judge.
Similarly, we do a plaintiff interview. The plaintiff interview is really important for us because it tells us two things. One, is the plaintiff a logical, reasonable commercial player? We like those. We like those because they’re more likely to settle. We like those because they’re just a more reliable witness and we just like them because we think that they’re going to play well in front of a judge or a jury. The second thing is when we’re speaking to them, do they seem trustworthy and reliable to us? If it was a he said, she said situation, would they be a reliable eyewitness or things that happened to them?
Interesting. It is really, as you said, qualitative and quantitative. I’ve had this situation, again, being a defendant, where you pick counsel because of their reputation, their firm, etc. When you see them sometimes in the middle of it in court arguing, they may or may not be very good. It’s one thing to be able to get a settlement, it’s another to be able to win.
I also find that, at least for us, you can tell from an attorney’s docket, because all of this stuff is public. You can tell from their docket if they have done cases of similar complexity in the past. One of the funny things that Christian and I ran into very early on that highlights the limitations of technology are, Christian, who was an engineer was like, “I’ve done it. I’ve found the best attorneys in all of Massachusetts. They have 100% win rates and it’s over thousands of cases.” I was like, “That’s incredible. Let’s look at their websites.” It turned out to all be collections attorneys, of course, collections attorneys get thousands of default judgements. I think that that is another really important thing to highlight, which is that some attorneys just take on cases of greater complexity. You really only, after talking to them, will know what their quality of thought and reasoning is. It’s truly both.
You said you have about 40 lawyers working for you and you yourself are a lawyer now. I think that is also a mindblower. Let’s talk a little bit about that. You’re newly licensed.
From CEO To Esquire: A Journey To Becoming A Licensed Attorney
I’m very proud of it. I went through the law office study program in California. California is one of the few states that allows you to apprentice your way into taking the bar. Christian and I started this in 2018 or 2019. We finished in 2022, took the bar in 2023 and we both passed.
Congratulations, by the way. It’s major.
Now we are esquires, but not jds, which is a very confusing binary to be in.
Tell me why you decided to do that. Did you feel like you needed to or you wanted to? It’s a lot of work to do that on top of running a billion-dollar investment fund.
When I first started, I would be on the phone with attorneys, and attorneys would always ask, “Are you an attorney?” It was slightly embarrassing for me to have to say, “No, I’m not.” As time has gone on, I don’t interface directly with attorneys nearly as much, so the need for that has gone away. I had already started, so I figured I might as well finish. Doing the bar really did give me an appreciation for why attorneys that I talked to are the way that they are.
One of the things that really struck me the first time I did one of these bar exercises was that for us, as a litigation funder, we’re always saying, “Okay, but what is the core claim? What is the most important claim?” As a lawyer, you’re really not trained to do that. You’re really trained to say, “Please list all possible claims, even the ones that have no chance of being successful. You must at least list them.”
That’s why attorneys oftentimes will just go on for a really long time, at least from my perception, about things that if you were to press them on it, they would be like, “Yeah, that’s actually not likely to matter.” Initially I would say, “If it’s not likely to matter, why are you talking to me about it?” It’s how they were trained and it’s like their way of showing that they’re conscientious, that they’ve thought of everything, etc.
That’s totally it. Actually, I was talking with another CEO and he said he liked having all of the different issues laid out. I think I’m more like you. If it’s not going to matter in the end of the day, we don’t need to waste the time on it. Let’s just get to the bottom line of what we’re worried about, but you’re right. You’re so right on it that that’s the training. You’re in such a unique position being a business owner, being the CEO, working with lawyers, employing lawyers, and now being a lawyer yourself. I’m really curious about, from your standpoint, what makes a good lawyer?
I can tell you one thing that I think makes our general counsel nowadays really good. I think that when we interview lawyers, at least to work at our firm, we would always ask them, “What is something that you’ve done in your role that you’re really proud of?” A lot of lawyers would have a negative answer, something that they’ve prevented the company from doing or a risk that they saw that no one else saw as the thing that they’re most proud of.
“Our company almost did this deal, but then I prevented them from doing the deal.” I think that’s fine. I think that there is a role for that, but I think the truly great attorneys are able to transcend that and say, “Instead of being someone who says, ‘No, you can’t do that,’ I want to be someone who tells you, ‘Here’s how you can do that.’”
I think the truly great attorneys, I would also describe them as detail sponges. Okay Attorneys or good attorneys are detail gatherers who then will broadcast it back to you so that it fills your head with all the details that they know. I think really great attorneys are details sponges where they know all of the details and they know all of the information, but they’ve absorbed it and processed it and categorized it so that you as the executive do not actually have to worry about it.
They discern for you what you need to know.
Yeah, exactly. I’d say those two things. Finally, from a litigating attorney’s perspective, because these are more from the business side, I think they apply to a litigating attorney as well. From a litigating attorney’s perspective, I think there’s actually something that’s a little bit different, which is you have to be able to tell a cogent story to a lay person. I think the really great trial attorneys excel at this. They can tell a cogent story to a lay person that basically just says, “Here’s what happened,” and it has to be something that like a ten-year-old can understand.
Life is complicated. If we’re in litigation, something complicated likely happened, but no one has the bandwidth or attention span to listen, like TLDR. Just get to a good story and keep it simple. Thank you, Eva. This has been really interesting. I’m really impressed with what you’ve built and I get a sense of real curiosity and intellectual stimulation that you get from this work. I just want to acknowledge that.
I really just enjoyed that part of the conversation. I ask all guests the same question, and it’s selfish because I’ve used music my whole life to get through things or I do it especially like to get pumped up for a big meeting at work. I’m always looking for good music. I ask all guests, what is your pump-up song?
I like this song. It’s by a Gen Z artist named Maisie Peters, but it’s called The Band and I.
All right, I’m going to check that out. My daughter is Gen Z, so she probably knows that. All right, cool. Thanks so much for being here and thanks for your work supporting the legal community because that’s what I see you doing, so thanks.
Thank you.
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Eva Shang, baseball stats.
My name is Eva Shang. I’m the Cofounder and CEO of Legalist. A fun fact about me is that when I was 17, my 10-year-old sister Melissa and I petitioned American Girl to release a Girl of the Year with a disability, and it got over 150,000 signatures.
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About Eva Shang
Eva Shang is the co-founder and CEO of Legalist, a tech-enabled alternative credit firm. Legalist manages over $1 billion of asset for endowments, foundations, and family offices, across litigation finance, bankruptcy, and government receivables. Eva leads the company’s 40-person team of engineers, attorneys, and analysts and is a licensed attorney in California. Before co-founding Legalist at 20, Eva studied economics at Harvard College. She lives in San Francisco with her husband, children, and mini labradoodle, the General Partner.
