Ex-Morgan Stanley Banker's Funding Firm Enters Disbursement Buying Market
Doorway Capital joins the ranks of legal funding firms offering to buy disbursement books outright
February 26, 2019 at 07:44 AM
2 minute read
Legal funding firm Doorway Capital has joined the growing trend to buy disbursement books, offering law firms an alternative third-party funding route.
Doorway, which was founded by former Morgan Stanley banker Steve Din in 2015, is to begin the purchase of disbursement books from litigation partners, allowing funds to be freed up for investment or returned to equity partners.
According to a Doorway press release, the funding firm allows litigators to sell their books outright rather than fund them through borrowings, allowing partners to take capital out of the law firm through one-off payments.
Its website says it will offer the facilities of between £50,000 and £20 million to Solicitors Regulation Authority law firms in England and Wales.
A disbursement is a payment made by a lawyer on behalf of a client, which is later charged to that client, though these charges can often be left outstanding.
Other UK legal funding firms that offer to purchase disbursements include VFS Legal and SpectraLegal.
Din said in a statement: "For most firms, disbursements represent assets of the equity partners so, logically, the proceeds from disposing of these disbursements to Doorway should ultimately benefit these very partners.
"Until now, this hasn't been an option law firms have considered, but we expect this to be an attractive way for firms to free up much-needed capital in order to invest in the future of their business at a time when the market is changing."
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