The New York Times is doing a series on the growing trend of investing in lawsuits. This week’s article focused on investing in high net worth divorces. An interesting concept that brings up significant ethical and moral dilemmas. Such services create a pseudo contingent fee arrangement (the typical arrangement where a lawyer receives a percentage of the final outcome of the case). In Minnesota, as in most states, contingent fees in dissolution matters is against the rules of professional responsibility that lawyers are held to.

For me this type of “investing” creates a dichotomy between the distasteful concept of profiting based on the size of a settlement tied to things like child support and spousal maintenance and creating a viable alternative for people whose lack of access to assets prohibits them from hiring counsel. As to the former, I recognize the irony in the fact that I do “profit” from a dissolution by accepting an hourly fee. I reconcile this by the fact that my fees are based on work completed. My motivations are not the size of someone’s settlement. As to the later, it bring up the reality that in the past, and still to some extent today, it is usually the wife who does not have access to a families’ assets. By not allowing alternative fee arrangements for dissolutions, it is more often women who are not able to seek dissolution or hire competent counsel, thus perpetuating gender inequity.

The article can be found here.