Law firm lending, sometimes called law firm portfolio finance, provides capital collateralized against a firm's portfolio of contingency or hybrid-fee matters, rather than against any individual case's outcome. The capital is typically non-recourse: as cases resolve, the firm services the arrangement out of proceeds, and if the portfolio underperforms, the funder's downside is contained by diversification across many matters rather than dependence on one.
This lets a firm offer contingent-fee or alternative fee arrangements to clients without sacrificing the operating cash flow needed to pay salaries, overhead, and case costs while matters are pending, effectively converting a firm's future fee receivables into present-day working capital.
Firms sometimes combine law firm lending with traditional bank credit lines, though most funding agreements require disclosure of any existing financing arrangements and funder approval before layering in additional debt, since the interaction between secured bank debt and non-recourse litigation capital raises priority and collateral questions that both sides need to resolve upfront.