When a David goes after a Goliath like
Microsoft or General Motors and wins, the victor rarely gets the
spoils at least not right away.
Corporations usually appeal big-money damage awards, dooming the
little guy to what could be years of costly legal battles unless he
or she is willing to settle for much less.
"The legal system doesn't really work in this country unless
both sides have money," said Alan Zimmerman, president of Law
Finance Group Inc.
Now there's a way to even the odds.
Zimmerman's San Francisco-based company provides upfront cash to
plaintiffs facing appeals after being awarded at least $250,000 at
trial. It doesn't get involved in how the case is handled or how
the money is spent it just collects part of any final award or
settlement. If the plaintiff loses the appeal, no money is owed.
Lawyer Jeff Shaw in Valparaiso, Ind., used Law Finance in 1997
when he represented a waitress whose 4-year-old son died in an
apartment fire. Shaw proved there were no working smoke detectors
in the home and won a $1.75 million award from the landlord's
insurer, which immediately appealed.
Shaw and his client received $198,000 from Law Finance and
promised to pay the company twice that much if they won the appeal.
Eventually, the woman settled, paid off Law Finance and had enough
money left over to buy a house.
"It really is for the benefit of the small guy, including the
small lawyer's office that doesn't have the financial wherewithal
to ride out these kinds of appeals," Shaw said. "It's just the
way of the world. Big money is always going to be successful."
Herbert Smith of Philadelphia called Law Finance "a blessing."
He alleged age discrimination when he failed to receive an
airport job for which he was qualified, instead receiving a
lower-paying job with fewer responsibilities.
Smith, 65, received free legal services during the trial, but
after a jury awarded him nearly $1 million in damages, Smith no
longer qualified for aid even though he left the courtroom with
just $2 in his pocket.
Naively, he assumed he would receive his award fairly quickly.
But his employer appealed.
"I figured that within 30 days I'd have a million dollars in my
pocket. If they send you to jail, you go right away," he reasoned.
Law Finance analyzed the case and Smith's chances of winning an
appeal, and decided to give him $100,000. Smith said his eventual
settlement was more than enough to repay Law Finance, pay his
lawyer and fix up his house.
At least 15 percent of Law Finance's work involves personal
injury cases. The rest run the gamut from discrimination to civil
rights violations to insurance fraud.
It appears to be the only company in the country that does this
type of work, and though it may seem like a gray area, the business
is on solid ethical ground.
"What we're talking about right now is not whether the practice
is proper, but whether the price is too high," said David Luban, a
legal ethics expert at Georgetown University Law Center. "It
doesn't bother me that this company is out there doing this. I'd
feel better if there were a few others."
William Simon, who teaches professional standards at Stanford
University Law, says Law Finance simply neutralizes a bias in the
"It's too bad that justice isn't free but I'm not sure there's
any solution to that," he said.
Zimmerman and Michael Blum, the chief executive of Law Finance,
have about 60 years of experience as attorneys between them.
Zimmerman practiced in New York and California before founding his
own firm and a financial services company. Blum was a civil trial
attorney before founding a computer company.
Formerly known as Judgment Purchase, Law Finance has been doing
business for about five years. While it won't reveal its annual
income, Zimmerman said in September that the company's pending
cases and those it was considering totaled in the tens of millions
"If we weren't successful we wouldn't be in business," he