When most people think of lawyers, they don’t often associate them with the most upstanding citizens. The animal to which most lawyers are commonly compared is, of course, a shark, and the comparison is rarely favorable. To Michael J. Swanson, however, not all lawyers are created equal. The CEO of Advocate Capital, Inc. and author of How David Beats Goliath: Access to Capital for Contingent-Fee Law Firms has an entirely different perspective on lawyers (and, particularly trial lawyers). But, how did Swanson come to such a conclusion?
You might think that Swanson is a trial lawyer himself, but you’d be wrong. The Ohio State alum has his background in business, starting his first venture (Champion America, Inc.) in 1989. Over the course of the next decade, Swanson bounced around to numerous positions within the company. He and business partner, Dan Taussig, eventually sold Champion America, Inc. to the Brady Corporation in 1999 in order to pursue other business possibilities. In fact, Swanson became the president and a member of the private equity firm, Wellgen Standard LLC, in 1999.
What does any of this have to do with Swanson’s particular affinity for trial lawyers? If anything, it set the stage for Swanson’s next big venture, Advocate Capital, Inc., which would thrust him directly into the world of contingent-fee trial lawyers. Advocate Capital, Inc. deals primarily in the industry of law firm financing, meaning that Swanson was able to get up close and personal with the everyday realities of lawyers and their legal funding.
After becoming CEO of Advocate Capital, Inc. in 2000, it became clear to Swanson that most lawyers were not the best businesspeople. They were persuasive and erudite in the matters of law, but were certainly lacking in business and financial aplomb. After all, law school doesn’t really teach you the ins and outs of operating a business. Swanson spent (and continues to spend) his time at Advocate Capital, Inc. performing a number of tasks related to sales management, credit underwriting, strategic planning, and more. He’s also pored over his fair share of tax returns and other financial statements for law firms.
It was in this direct contact with both lawyers and their financial dealings that allowed Swanson to see the positivity in their work. It also made him want to help trial lawyers as best as he could.
Contingent-fee lawyers, as one might expect, are only paid contingent upon the outcome of each case. They also deal largely in personal injury matters. If they win their client’s case, then they are paid a certain percentage of the recovered damages. But, if they lose, then they’ve provided their professional legal representation for literally no monetary gain. While it’s certainly admirable to represent clients without a guaranteed fee for their services, it often doesn’t make good business sense. After all, no lawyer wins 100% of their cases, and the costs for compiling evidence, rounding up witnesses, and spending days, weeks, or even months on a case aren’t cheap.
Over the course of his tenure at Advocate Capital, Inc. (which is still ongoing), Swanson has certainly had reason to be sympathetic toward the plight of contingent-fee lawyers. Most contingent-fee firms are small and spend much of their energy representing plaintiffs against massive corporations. Their job is often difficult and thankless, especially when they don’t win their cases.
Some would think that owning and operating a business that specializes in the funding of these contingent-fee firms would be enough of a “thank you.” But, Swanson took it a step further by penning what was essentially a self-help book for contingent-fee law firms on how to secure funding and stay afloat financially. How David Beats Goliath was envisioned in 2010 when one of Swanson’s colleagues, Harlan Schillinger, suggested that he write a book on the topic of legal funding. At that point, Swanson had had a decade of experience in the industry and had spent countless hours researching that exact topic.
After some vacillation, Schillinger convinced Swanson to write the book and also became his literary agent. The book was released in 2011 and received rave reviews from both critics and trial lawyers. It detailed the difficulties inherent in running a contingent-fee law practice and offered 10 different sources from which contingent-fee firms could draw funding. Clearly, Swanson had gone the extra mile.
Since then, of course, Swanson has continued working at Advocate Capital, Inc. helping trial lawyers so that they continue helping their clients. It’s certainly clear that not all lawyers are greedy sharks, and maybe some businesspeople are all right, too.