Episode #8: Martin Shellist in The Heart of Law
Erudite, strategic, principled ... one can expect nothing less from our next guest, Martin Shellist. Known for his dexterity in both trial law and asset management, Mirena Umizaj invites the sage attorney to discuss the pedagogy of litigation funding.
In this particularly didactic episode of The Heart of Law, Martin and Mirena talk shop. This time, we get a glimpse of the legal finance industry as he expounds on the differences between a traditional bank and a litigation financial firm like Virage Capital Management. Illuminating us on the many uses of capital for lawsuits, Martin shares invaluable insight on the fiscal discipline and intelligence that qualifies a potential client; more importantly, we hear the immense ethical responsibilities that go within its processes. As Martin articulates the inner workings of funding the business of law, we learn about fiduciary duty, case inventory, contingency interest, client aggregation, healthy attorney-client relationship, and quickly understand why “educating the marketplace lifts everyone.”
Our incisive host leans in when Martin deconstructs the many challenges—even dangers—a firm may face if they choose legal financiers with mandatory debt service, prepayment penalties, or (worse) those who influence the outcome of a case. While he encourages borrowers to meticulously vett their documentation and avoid using the funds for daily operational costs (instead of the cases), he firmly reiterates the importance of having an accountant (perhaps an ethicist) involved, so all transactions remain fiscally sound. Throughout the conversation, we realize how Martin runs his company and the high ideals Virage operates by: equitable and upstanding.
As Martin predicts the future direction and specialized evolution of litigation finance, we can’t help but feel relief hearing from someone who cares enough to help us find the right questions and gives us the courage to ask them. Because Martin functions within the cadence of forthrightness, accuracy, and conscientiousness, we intuit that we’ve listened to an unassuming giant whose huge footprint positively shifts the financial paradigm in the legal world.
EPISODE SURVEY
[00:03:48] Transitioning into the legal finance world as a veteran attorney
[00:08:35] The key utility of litigation funding
[00:20:05] What Virage looks for in potential clients
[00:28:17] Vital information to know before getting involved in mass torts
[00:39:18] The nitty-gritty of interest and prepayment penalties
[00:47:31] The foundational difference between bank loans and litigation funding
[00:54:04] How to sagaciously handle post-settlement loan repayment
[01:19:02] Clearing up misunderstandings about nonrecourse and recourse loans
QUOTABLE QUOTES
“I liked fighting for people that were picked on or harassed or abused in some way. That was always very, very important to me.”
“What I think lawyers need to look at when taking financing is: ‘It's good that you have a thousand cases, but are you in control of your data? Are you in control of your case?’ ”
“The mass tort world is a whole different landscape from any other area of law, and it is as much a business as it is the practice of law that you'd ever find.”
“The lawyers who nurture the money, the ones who invest with an eye towards a return on investment … are the ones who make the most money and are arguably the happiest with it … having fiscal intelligence is helpful.”
“At the end of the day, we want to see our borrowers succeed, and we give them all the advice we can.”
“Diversify your portfolio ... I tell lawyers that all the time; don't spend a million on one tort, put three hundred grand into three torts.”
“Whether it's in the context of a … discussion or prospective borrower or...colleagues... I like connecting good people.”
“When I talk to borrowers, I don't talk to them about making money. I talk to them about who they are … I talk to them about what they need and where they're going.”
“I think that Virage is unique among any lender out there in this approach that we take catastrophic losses; you're protected.”
"You'll be far safer ... just shooting for the moon [than] spending money you haven't earned yet."
ABOUT OUR GUEST
Currently the Managing Director at Virage Capital Management & Founding Partner at Shellist Lazarz Slobin, LLP
An attorney for 28 years and practices law in Texas
Tenured memberships Houston Young Lawyers Foundation and American Board of Trial Advocates
Earned the Nation’s Top One Percent award from the National Association of Distinguished Counsel in 2017
Selected for Texas Super Lawyers from 2008-2021 and Texas Lawyers Rising Stars in 2006
LINKS FROM THE SHOW
Check out Martin’s super chill bio and LinkedIn
Visit Mirena’s Chic Website and LinkedIn
Shownotes and podcast production by Caryl Veloso, Founder of Almond Tree Writers' Ink