That’s the litigation finance 101 transaction, if you will, because most companies don’t show up out of the blue having never used capital like this before, and instead moving straight to doing large, complicated, multi-case portfolio transactions. So that’s how things start, and we have a pretty steady run rate of those kinds of single case transactions in the business and they — month-in, month-out, we do some volume of that. Then you add on to that the stuff that has evolved, and that’s a combination of law firm portfolios and now larger corporate portfolios. And the amount of money that we’re going to commit and then deploy in any particular period is going to be driven to some extent by the presence of a relatively small number of those large corporate transactions.
So as I said, if you look at the second quarter of 2023, we did $325 million with a Fortune 50 company. I don’t intend to — I don’t imagine that we will see that repeat on a reliable basis, like clockwork once a quarter. We might do one of those deals in a year, we might do two of them. And those are the deals that really have a fair bit of impact on the total numbers. And I’m not particularly concerned about any particular period because I know that we’re continuing to grow that business. I know that it’s a long sales cycle, often it’s years, but I know that there are enough of those out there to provide us with a continued runway of future growth. So I don’t really have a number to guide you to on a quarter-by-quarter basis or even a period-by-period basis, but hopefully that gives you a little bit of color about how the business actually operates.
Portia Patel: Thank you very much. That’s helpful.
Operator: Thank you. We now have the next question from the line of Matthew Howlett of B. Riley.
Matthew Howlett: Thanks for taking my question. Just in the quarter, was there anything unique about milestones versus the other quarter? Anything lumpy that happened in the quarter or something that was pushed out? Just curious on the update on where things are tracking milestone wise, in aggregate?
Christopher Bogart: Yeah. Jon can certainly speak to that in some more detail. But just as a headline matter, I think the answer is probably no as to just — other than the ebb and flow of litigation generally. So what happens in litigation, it’s hardly ever the case that litigation goes faster than planned or expected. And so, what inevitably happens is you start the year with a whole bunch of things that are calendared to do things at various points during the year and some portion of those events will occur as scheduled. And some portion of them will get delayed, just as you see in any sort of public trial that you’re watching. If anyone’s paying attention to the travails of Donald Trump right now, with multiple trials pending, you see one of the big things that is up in the air and being jockeyed about is the trial date.
And that happens — that’s a famous example. But that happens just as clearly in civil litigation as well. And so that’s a normal part of the business. But what you’re seeing in our business right now is effectively some amount of supernormal portfolio activity. And that’s driven by courts trying to push things through and catch up on the backlog that was created during COVID. So when I earlier gave you that number about a majority of our activity occurring in pre-2020 vintage matters, that’s an example of that. If we hadn’t had COVID, you probably wouldn’t expect that to be the case. You would have expected those pre-2020 matters to have concluded more significantly than they have by now.
Jonathan Molot: Yeah. I might add, just with respect to both of those questions, Chris’ point about quarterly and not necessarily being a marker, I think about the underwriting team day-to-day and they’re handling for the last two questions both the underwriting of new matters and, as Chris said, the sort of long sale cultivation of relationships with law firms over large portfolios or corporates over large monetization of portfolios. And at the same time, they’re also dealing with existing clients on existing matters that are working their way through the litigation process. This one’s going to trial, we’re sitting and getting reports on this trial. This is in pre-trial motion. And that all goes on, and it’s not like something magical happens at September 30th, a bunch of things happen and then October 1st there’s a new thing.
We have found over the 14 year history that counter-parties and courts do sometimes pay attention to year-end. That that does motivate some settlements and does motivate some deal closings, but otherwise, quarters in between don’t really mark anything for our counterparties for the litigation process, for defendants and suits, and so they don’t seem that significant.
Matthew Howlett: Great. So just in summary, the courts are back to business. There’s no legacy overhang from COVID that you’re seeing.
Jonathan Molot: Yeah, exactly. The courts are back to business in the sense that none of the courts that we deal with are not operating today at full capacity.
Matthew Howlett: Okay.
Jonathan Molot: That being said, the backlogs present very significantly by court. So there are some courts now that have no COVID backlog left. You can track this publicly, the US courts publish voluminous and frequent statistical information about what’s going on in them. So if you look at the courts in the Northern District of Florida, for example, so Florida’s capital, Tallahassee and so on, those courts are not — those courts have caught up all of their pandemic delays and they’re right back to a normal rhythm. On the other hand, the courts in and around Manhattan are not. So in Brooklyn, for example, which is a very busy US court, there are still multi-year delays in getting a case to trial, it’ll take you about four times as long to get to trial in Brooklyn as it will in the Northern District of Florida.
So you’ve got idiosyncratic things like that around the piece, but the system as a whole is not only fully functioning, but you see judges making real efforts to try to clear backlogs and push cases forward.
