Khurram’s Quorum – Ep 046: Mani Walia on the lunch that launched a fund a decade later - trust, focus, and alignment
Mani Walia's career is a case study in how genuine relationships compound over time. When he was an associate at Susman Godfrey, he took a new colleague out to lunch for a real, vulnerable conversation about the demands of elite practice. A decade later, that colleague had become a top rainmaker, and Mani was the person he called when he needed funding for what turned out to be one of the biggest patent cases of 2023.
In this conversation, Mani walks us through how he went from trial lawyer to GC of a multi-strategy fund to co-founding Signal Peak, his own litigation finance firm. We dig into how he and his partner Lauren Harrison source deals through trust-based relationships with Texas trial lawyers, why they structure deals with real alignment on both upside and downside, and how the operational habits he learned at Susman Godfrey power everything they do today.
Keep reading below for the full link to the episode and the full transcript of our conversation.
Top Insights
Below are the highlights of our conversation:
- Intangibles Become Tangibles: Mani's litigation fund exists because of a lunch he had with a struggling associate in 2012. The relationships you build as a peer trial lawyer are the same relationships that generate deal flow years later.
- Speed as a Competitive Weapon: Because Mani and Lauren have tried the same types of cases they fund, they can underwrite faster than competitors who need to hire outside expertise. In a market where lawsuits are depreciating assets, that speed wins deals.
- Alignment on Both Sides: Signal Peak structures deals so the funder shares real downside risk with the law firm. If a case settles low, they take it on the chin alongside the lawyers. That skin-in-the-game approach creates a flywheel of repeat business and trust.
- The Task Sheet Leader: Mani credits his operational discipline to Steve Susman's "one riot, one ranger" principle. Every task gets one owner, nothing falls into a black hole, and monthly meetings are reserved for stepping back and steering the ship.
- Focus Creates Optionality: By narrowing their fund to cases they actually know how to try, primarily Texas commercial and patent litigation, Signal Peak avoids the trap of chasing every deal. That focus lets them move fast and take concentrated risks others shy away from.
Listen Now
Catch the full episode on your favorite podcast platform.
Spotify
Or click here to listen on Spotify
Apple Podcasts
Or click here to listen on Apple Podcasts
Full Transcript
Khurram Naik: Mani, so great to have you on. It's been great getting to know you and excited to share your story here.
Mani Walia: Thank you so much for having me. As part of my homework before joining, I listened to a few and then saw your list of guests. So I truly am honored to be part of this group and join the ranks.
Khurram Naik: We're really looking forward to it today. Okay, great. So in some of our conversations, we've been exploring how you came to be where you are. You're at Susman, one of the best trial firms in the country, maybe the best. And then you eventually went to a multi-strat fund where you eventually launched some litigation finance vehicles. And then went on to launch your own fund. So that's the trajectory. And all started with spending some time with a colleague who was having a hard time back when you were at Susman. So can you share that story and its impact?
Mani Walia: Yeah, thank you for asking. And I'm so thrilled to be on. It's interesting, when I was doing all this you don't connect the dots and you know imagine what's going to happen. But looking back, it's fascinating because it's just a story of good friendship, which maybe is really what networking is about. So this story, which is a true story and now has helped launch our new fund, all started way back probably in 2012 when I was a baby associate at Susman Godfrey. It's a very prestigious and amazing firm. It's not known for a great quality of life. Let's put it that way, at least back then. So there was another associate, terrific smart guy, probably two times as smart as me and just an amazing lawyer, baby associate. He was new to the office. His wife was still doing residency. She's now a dentist in Houston. But back then she was a dental resident somewhere in the northeast. And they had just had a kid. So this guy was slogging, I don't know, 90, 100 hour work weeks. And it was tough for everyone. And so maybe his first or second week at the firm, I noticed it, probably just because a lot of people have figured out how they network. It just was inherent for me to walk around the office and notice these things and try to connect with people. And we went out for lunch and he got a chance to talk and be vulnerable about what he's going through. And it's not really my natural instinct to be vulnerable back. But I talked about how it's tough for me, and I have a kid too, and my family's in town but it's still tough to juggle everything. And that one conversation started a real friendship within this firm, Susman. And then fast forward nine years later, this guy makes partner, is an amazing rainmaking lawyer. We had just started the litigation work at my previous company. A month into it, he emails me out of the blue. We kept in touch, but he emails me and says, you know, you've been a good guy, can you fund this case? And that's how it started. It went on to be one of the biggest cases in 2023. I know you do a lot of patent cases. It was one of the biggest cases in the patent arena and it put us on the map, put me on the map as a funder. And it all started from personal connectivity. And so it's just a story I sometimes try to tell my kids about being friends and connecting people. I think it's a great story because it truly did change my career.
Khurram Naik: Can you break that down a little more? Tell me about it. So you got the case. This was a major inflection point because you hadn't funded a patent case yet, because you said you were only a month into working at the fund. So it was the first case overall?
Mani Walia: The first case overall. And so my whole experience before that was trial lawyer. So I wasn't in litigation finance, this was a transition to it.
Khurram Naik: How did you handle it? So your friend comes to you, he's got a case. You were a month into starting the fund. Now what?
Mani Walia: What was really helpful is that the framework for that had been put in place in the months preceding. And I say this to a lot of lawyers. I think lawyers are good leaders. We knock ourselves and say that we're not entrepreneurial or we're not having two new ideas per day like what we think of great CEOs or visionaries. But lawyers, in my view, are very good at task sheets, to-do lists, and getting things done. So although we were just a month in, we had built the infrastructure on how to underwrite, have the fund in place, have capital in place. So we had all that there. We just weren't ready for such a big, prestigious case to come in, just because we weren't expecting that. We were planning to have a few years where we're trying to get enough deal flow to justify having a fund. But that preeminent case from this amazing law firm and amazing lawyer came in very early. The infrastructure had been there because of this task sheet mentality.
Khurram Naik: And so before you got that, how did you identify the terms? What were the terms of fair market, and how did you come to determine those for this matter?
Mani Walia: That's another thing that I hope we spend some time today on, lawyers as business leaders. There's a lot of axioms that I live by. I'm sure many of your other guests and you might live by them too. One of these things always floating in my mind is the Jeff Bezos rule of making decisions with 70% information. So how did we have the terms before we started the fund? I didn't want to start the fund until everything was in order. Not to say it was perfect, right, 70%. But we had a litigation funding agreement ready to go. How did I source that? It was on our task sheet to come up with it. I found publicly available ones that were by other leading funders, cobbled together my own template and had it ready. So in many ways, we had built the house and now we were just looking for occupants. And it just blew our mind that the first occupant was this kind of case that everyone in the litigation funding community would have wanted. The complete alpha generator, the value add, it's sourcing. If you have great cases in the top of the funnel, so to speak, they'll make their way down to the bottom. So the infrastructure was in place. We were just amazed that the sourcing, which is the highest alpha, came simply from trying to be a decent human being and connecting with people and then keeping in touch. Which, you know, maybe is easier said than done. But if you can do it, it's not a very tangible skill set.
Khurram Naik: And so then, help me understand. That asset performed very well. Investors are very happy. Are there any, and this maybe a very basic question, but does any kind of performance, does external performance, are there any kinds of performance that matter for investors? Are they just looking for pure return? Is there something about the nature of performance, say timeline or nature of recovery, that matters to the institutional investor LPs?
Mani Walia: It's not a basic question. We get that exact question or similar question from very sophisticated LPs, professional money managers at pensions, university endowments. Returns are important, and I would have thought at the beginning returns are like the trump card, like it's the beginning and end. It's really not. Because even with that great return off of our first case, and it was great by all objective measures, I know all the stats on private equity performance. Generally you want to two times your money in three to five years. So we had well surpassed that, it was great. LPs though are looking not just for one-hit wonders, because they have this sort of jaundiced eye. The other things they look for are repeatability. Team, as cheesy or trite as it is to say, people want to work with people that they connect with. I do this with the service providers we hire. It may be the same in your world, of the service providers and lawyers you work with, you know, have some connectivity with them. So to get back to it, LPs are looking for returns, they're also looking for repeatability of the process, looking for the quality of the team, and then looking for what's your differentiator. Is it that you happen to be some of the smartest guys and gals in the room on international arbitration? Or do you have a great network? What's your pipeline like? That maybe is the differentiation. But those are probably the four biggest factors. And you can't hide from returns. You're only as good as your last trades. If you have everything else but then a few bad trades, it'll be challenging. But returns by themselves doesn't do it.
Khurram Naik: So then that performed well with the criteria that was beneficial for those LPs, and so they saw repeatability in this process. They saw maybe some network effects, some other indicia that this was a winning team, this isn't a one-off thing. So then did they communicate what it was specifically that they saw? Like, was it communicating, hey Mani, you got this case from a colleague, you're probably going to get other cases from elite trial lawyers. Did they communicate what it was they really valued about you?
Mani Walia: A little bit. It's not as clear with communications with LPs as the way you just framed it, probably because they expect the manager, the company, to sort of intuit these things. And I guess the best way they demonstrate how much they like it or they communicate is by reallocating into future funds. So that was the evidence that people liked it. And the litigation finance business, in my view, it's really the intangibles are the tangibles. If you can source well, that means that you've had to put in the years of work beforehand on who your network is, do they trust you. You can't just come back to people after 10 years of being silent. But because LPs, institutional investors, could see the pipeline and the networking prowess that I was able to demonstrate, that is the repeatability of what I've been able to do in litigation finance. And so from there, investors seemed very happy, and then I launched my own fund.
Khurram Naik: That's quite the genesis, from having conversations with somebody who was looking to have a deeper conversation. Let's go back to sourcing because it seems that in a fund there's some fundamental functions that a fund has to perform. It has to source matters, it has to diligence them, and then it has to monitor them. I think different funds have different degrees of monitoring involvement with their matters. And probably, I guess we can add as another function, structuring the transaction. I guess there's some competitive advantage there in coming up with the right terms that aligns incentives. And so it sounds like of those functions, your competitive edge, maybe there's other functions you can tell me about, but it sounds like you're saying your competitive advantage, the dimension in which you're most dominant, is sourcing.
Mani Walia: I would say that our Signal Peak competitive advantage is the sourcing and underwriting. We sort of joke, and I don't use too many of these financing terms, but we make all of our money on the buy. So that means when we get into an asset or investment, the value generation is at the beginning, sourcing and underwriting. And then once it's in the fund, these are cases. And that's what's so unique, and I'm glad I'm on this podcast with you to talk to lawyers, or hopefully some lawyers are listening. How interesting that lawsuits, things that we learned in law school about, doctrines, they are big-time assets that folks on Wall Street want to get access to. I get a chance now to go speak to law students a lot, and I always say, how cool that the legal mind is such an asset now that Wall Street wants to know how to underwrite cases. That's something only we, as lawyers, the 1.8 million lawyers in the country, which sounds like a lot but still not that many, and of that maybe half of them are trial lawyers, they want our brain. They want to know how to underwrite cases.
To answer your question, that is our competitive differentiation. I'm so lucky that I partnered with someone who I admire in the industry. She used to be my biggest competitor, because the same attributes that I have are ones that she has. She's a double federal clerk. She was a partner at Vinson & Elkins, which is a prestigious Texas firm, and then at Jones Walker, another Louisiana and Texas firm. So the same connections I had, she has, but at a different vintage of her career. And that has been our sourcing advantage and the moat that we have. Trial lawyers like working with other trial lawyers. It's just part of the elitism maybe in the profession. And that's what we have. So our intangible that turns into the tangible is, so-and-so corner office partner at, I'm just making this up, Quinn Emanuel or Boies Schiller, they want to work with someone in the litigation funding community who's not just a professional financier who's like, oh I need to fund your case, we can make a lot of money. They want to work with someone who speaks the lingo, who's one of them, and can understand the nuances of litigation, standing, privilege, settlement. And that's what we have to offer.
Khurram Naik: So I think that's a dimension I'm really interested in, this transition you've made. And I've seen it in my own work because I was a patent litigator and now as a recruiter, recruiting is really more common with deal work than litigation. But there's some principles that you use from litigation, how to communicate effectively, how to persuade, how to structure negotiations effectively. There's some things litigators do well that way. But I think litigators probably overrate their ability to do deal making, among other reasons, because they have this artificial world where there's a set of rules in disputes before a tribunal. I think the stereotype of litigators having more of a zero-sum mindset is largely true in my experience. And so it's a fundamental shift in mindset and skill set to think of work as deals. And deals above all to me means non-zero sum, an understanding of how a transaction can benefit everyone. And so I see a major departure from litigation to that. But I'm curious how you see it. It feels like based on what you're describing so far, you see more of a continuity. But I'm really curious to see if there's any kind of mindset or skill set shift from practicing as a trial lawyer to now doing the work of deals.
Mani Walia: I see a little bit of both. Continuity, obviously underwriting cases, you're putting on your legal hat and analyzing, can I get indirect damages in this case, what's the statute of limitations. You're putting on your sort of law review, law clerk, or litigator hat. But the aspect of thinking about these in a non-zero-sum game is something I'm glad you noted, because it's very true. I bring this up only because it's relevant here. Way back when I was a baby associate at Susman, with different cases, I was on a patent case though. I was opposite a young associate at Quinn Emanuel. And the way I litigated and the way he did kind of falls in that old school gentleman and ladies code, which is we vigorously, we're both competitive, we wanted to win, and we fought hard on issues, discovery issues and whatever else. But then we developed a friendship, like when the game is over you don't have to curse your opponent. And we were talking a little bit about this before the podcast started. Old school politics was a little bit that way. Ronald Reagan and Tip O'Neill, they would shake hands after and have a beer after duking it out on policy. So anyway, I bring that up to say that's now a lawyer who sends us cases, even though we met in an adversarial setting. Because in an adversarial setting, I never had a zero-sum game, that after the game is over you never think about this guy or whatever. And so we generated a friendship back then.
The deal-making point you make is great, and I'll conclude by saying this. In litigation finance, if you're a funder like we are, there is a little art to it. Because now on the plaintiff side of it, there's plaintiff, law firm, and funder. You're adding a new element after hundreds of years of it not being there. It is a little bit of a delicate balance, which again is part of our intangibles becoming tangibles. We know how to structure these deals so that the trial lawyer and client remain king or queen of the case without impeding on what they should be able to do. And the only reason we're able to structure those deals with so much trust is we walked in those trial lawyer shoes. We don't need them to call us every three minutes after a case has started. We let them sort of do their thing. So we can expand on that later, but I really think there's a little bit of both, litigator hat and then thinking of deals in a more holistic sort of way.
Khurram Naik: Let's talk about that then. So there's this three-part aspect, and recruiting is the same way. There's lawyer, firm, recruiter, and you're aligning interests among all three. And so I think what you're saying is like there's this concept of the natural state being lawyer and firm. But there's no natural state. Just like when I buy a house, there's not a natural state where you just hand a bunch of cash to the seller. The natural state now is there's a funder, a market, a mortgage company of some kind or some sort of lender. So among other funds, for how other people structure this three-part relationship, what's your impression for what differentiates you in how you're structuring versus how peers of yours are structuring? What is the principle? Maybe it flows from trial lawyer alignment and there's some sort of operator trust that results in intangibles becoming tangibles. Maybe something about that relationship results in different terms, something quantifiable. How would you codify or summarize your approach and any departures you see from how others structure theirs?
Mani Walia: We are very fortunate because of the sourcing advantage and perhaps sourcing moat that we have for elite trial lawyers in Texas. And it's like a one or two degree separation with elite trial lawyers. We do a lot of repeat business. And then when you add on that not only is it repeat business with person X at whatever firm, but we also know him or her because maybe we were opposite in a case with him or her, or we were alongside that person. And Lauren has that just the exact same as I do. When you have that, and then you add the trial lawyer understanding, like, I understand how big your shoes are, it does generate into several things that I think differentiate us. And this is no slight to our friends in the industry, it's just that unique background. We don't grow on trees, right? This just happened to be, we're happy to be lucky.
So here's how it manifests itself in several ways. Number one, monitoring. You talked about that at the beginning. Probably because a lot of litigation funders actively monitor, maybe that means once-a-week calls. I have recognized and figured out that very rarely do these elite trial lawyers want to go on a phone with you or me or funder Joe Blow and say here's how the case is going. They're busy. And why do they need to account to some suit on Wall Street who's not even a lawyer, or maybe is a lawyer but not to their standard? So number one, we don't do these standing check-ins. That doesn't mean I'm not following the case. I have PACER, I have Westlaw, I have whatever other sources. I track the case, and again, as a trial lawyer, I can read three things and figure out exactly where things are. And then I'll have lunch with the lawyer when we catch up about personal, family, and the case. So it's much more organic in our monitoring. That's advantage number one.
Advantage two, which is very substantive, is the way we structure deals, which is in the minority, I believe, of the industry. Most funders want to make sure, each sort of myopically, that each individual deal has a downside protection. So in an example from these other funders, they'll require that the funder hit some return before other people on that side make a return. It's like they want to make sure, in a case, the quintessential example is, imagine a case where everyone's underwriting for a hundred million dollar settlement or judgment, but it's a ten million dollar settlement. The funder wants to make sure to hit its return or at least get closer so it doesn't get a zero. We take a different view because we do so much repeat business. We can bet on the long-term success rate of a firm. So we don't need to put some safeguard for our downside. If that same scenario happens to us, we really take it on the chin. Why do the trial lawyers like that? Because they recognize things could go sour in an individual case. But if you're betting on us in like five or ten, law of averages, it's a virtuous circle. So that's a big captivating thing for these lawyers, whether the case goes poorly, we still share in the outcome together. And that's something that generates a lot of goodwill in the sourcing market for us. Those are two examples that come to mind.
Khurram Naik: Yeah, I think the term that Nassim Taleb would say is skin in the game. You're aligned in that way, and that has consequences when it tells you lose. So with repeat business, do you start as a portfolio? Are you funding a portfolio of matters for a firm? That is a common arrangement in the industry. Any number of funders make these public announcements about funding arrangements with Kennedy or whatever law firm. How do you think about that?
Mani Walia: It's a tool in our toolkit. There are other litigation funders out there and we find ways to separate ourselves. I talked about sourcing probably already ad nauseam. We are open to that, and we have stuff in the pipeline where we bundle cases. But we like to be where no one else is. And that's also something that's been in my mind career-wise, where I sort of viewed my career as like a chess board. I always wanted to get to the most elite point because then you have optionality. If you take the hardest job and the most elite job out of law school, you can always go down, work somewhere with better work-life balance.
We think of it the same way. And here's what I mean by that. A lot of funders don't like to take single case risk. Another example, we've funded cases that have a single patent at issue. A lot of funders say, no, we need to hedge our bets, which I understand, it's very sensible. Why don't we worry about that? Because again, we have tried those types of cases. We see the value. If you take risk on those types of cases where no one else wants to take risk, they can be huge home runs. Obviously there's big risk there as well, so you need the portfolio effect. Now I'm sounding like the kind of private equity person I said I don't like too much. But if you build a portfolio with enough cases, enough shots on goal, then you can take those risks.
So that's one way where people can see the real alignment we have. I joke with our lawyers, we ride down together and we come up together, or maybe it's we come down together and we ride up together in cases. That's the way we look at it. The single most important calling card other than our sourcing and our ability to underwrite is alignment. Every deal at Signal Peak has that element that pervades it so that the lawyer is not going to just coast along. Not that they ever would, but with a pure hourly arrangement, we make sure everyone's got skin in the game. And that's a really important passage.
Mani's emphasis on alignment and skin in the game reminds me of my conversation with Joe Ahmad, who talked about how the willingness to take real risk, and share in the consequences, is what separates the best trial lawyers from everyone else. Listen to my episode with Joe Ahmad.
Khurram Naik: Yeah, that makes sense. You have skin in the game on both sides, in both directions. Going back to the single patent case you funded, do you look for other things to assess that? Is that coming in the context of a team that you funded civil matters with? Or you wouldn't try to think about how risky your risky bets get? For any risky bet, is there some mitigating factor, like how diverse is the portfolio, or is the portfolio a little more concentrated?
Mani Walia: I think I got all of your question, and if I didn't, you can ask me to add on to this. The factors that we look at that help us get comfortable with, for example, a very risky single patent case, which maybe very few if anyone else would do. IPR risk, as you know and some of your listeners know, invalidity, everything is very pronounced.
This is a good point for me to say everything that we do, that Lauren and I do at Signal Peak, at least from my perspective, I owe to Steve Susman. Steve Susman, the founder of Susman Godfrey, in my view, was the first commercial funder because he and his firm took commercial cases on a contingent fee way back in the 1980s. Not many firms did that. The reason I bring that up is our diligence model follows the learnings that I got from him. How lucky am I that I got to be at that firm and understand how they underwrite cases?
In regards to your question, a single patent case, yes that's a risky thing. But how does venue look? How do damages look? Who are the experts going to be? How long till trial? How strong is the case, and what's the settlement history of that defendant? If you just look even at these five pillars I just mentioned, if all of those are strong and out of the park, that might get you comfortable in a case. All that said, we funded single patent cases, but there's many that I passed up on because they don't have the other confluence of unicorn factors. But you can break down a case, if you think of it in investment terms, into five or six compartments, give each part a score, and homogenize your overall portfolio. And that's what we do.
Khurram Naik: So going back to Steve Susman's investment methodology, how does your approach differ from what Steve had?
Mani Walia: Susman's principles, we've just built on it. Obviously I'm biased. Steve is like a legend to me, a mentor. And many people listening to a podcast may feel that way. But I want to give credit to the way I worked there, and I think very highly of them. We've just built on it because things have changed in the last 15 years where he wrote this diligence memo and we emulated it.
Here are some examples. We now have data on lawyers. You could say, tell me about Joe Smith at Firm X, what's his win-loss record. And I have that data. So one big difference from the Steve Susman era is they never had to underwrite the lawyer, right? Because they're litigating the cases themselves. When I was there and we got a case approved to take on a contingent basis, we knew we were litigating it and we believed in the capability of the lawyers at the firm. Now when I underwrite in this seat as a funder, I spend a lot of time on what's the win-loss percentage of the lawyer, what's his or her integrity, what are other cases that person has handled. So that's a big part of our analysis.
And the other big part is now there's so much publicly available information, plus stuff from our database on cases we passed on, that you could say, hey, tell me about McDonald's, how many cases has it settled, what's its track record. And that's important to us. We don't want to always fund cases against litigants or defendants who will go to the end of the world to take you to trial. So those are two differentiating things: assessing the lawyer and having stats on reliability of settlement from defendants.
Khurram Naik: With that data approach, I'm curious about how you make inferences about the future. Let's say in the realm of patents, you're funding a lot of patent cases. You mentioned IPRs. There's a lot of challenges with getting IPRs instituted right now, and so there's a lot of uncertainty about the PTAB as a forum. What are the consequences of that? A pretty straightforward inference draws that we'll see more disputes in district court litigation. How do you think about that? I am normally reticent to make predictions because I know there's lots of ironic consequences to actions. But as a legal recruiter focusing on patent litigation, I'm making a bet that firms will continue to thrive and need legal recruiters, that there's opacity in that market requiring trust and expertise. And also on patent litigation itself, that patent litigation will remain durable and evergreen. So I'm curious, data-driven or otherwise, how do you think about the future of your fund? How do you think about what comes in line for patent litigation?
Mani Walia: We think about it in an organized way. Every month or so at our company, we get out of the daily grind and how busy we are on daily intake and sourcing and underwriting, and we just sit around and think about macro issues that are out there. And one of the macro issues is, where do we see trends, where do we see things closing up, and how can we best optimize ourselves to take advantage of that?
Let's use the patent area as you brought it up. We take a spin on Bezos's line. We sort of have 95% of the information and we're at an informational seat of power before we underwrite the case. We know the lawyer's track record, we know the defendant's history of settling, we know what the claim charts look like, et cetera. So we have a lot of information. We don't have a crystal ball on the future, but what we do is we pull the trigger based on a reasonable assessment of where things are going down the line.
The biggest concern for us these days is regulation of litigation finance. One thing to think about in stark terms is, if we fund this patent case, in three years will the court require review of our documents? Will someone say patent litigation funding is not appropriate or not something that should happen? So what we do is the best we can. Our company participates in ILFA, which is a lobbying organization. We're having an event in February. We have a member of Congress coming in, another congressional candidate. So we do our best being in the know about these things. And if we hear that, gosh, in three years there's this thing in this bill in Congress that can really impact us, that might slow us down a little bit. But on that stuff, maybe just like how you're feeling in your business, you can do the best you can and be confident with your underwriting now, have a reasonable view of the future, and go, because if you get paralyzed with what might come about, it'll detract from the short-term success of that particular case or this round of cases.
Khurram Naik: Can we go back to what you learned from Susman and Steve Susman? When I think about Susman in the market, people think about the process for litigating cases, the patterns, the culture, the ethical culture, and assessing outcomes. And Mani, you may be aware of this, but I did some research on Susman's website today. There's still a list of letters of recommendation for the firm, and you're in there. This is from, I'm not sure if it has the date, Mirtha Cassambier. She had a glowing letter for you. It was addressed to you and Steve about your impact. And she had some things to say. I'll read off what she said about you: "I also need to tell you about how pleased I was with you, Mani. You did excellent work. You never let up, and your daily work was crucial to getting an unusually good result against a very difficult opponent. You were a pleasure to work with. You have excellent client service skills and answered all my questions promptly and as much as I needed. I felt throughout the case it was very well informed, which helped me to keep my focus and stay calm. You're a great credit to your firm. The opponent was used to pushing people around and having their way. It didn't happen here." Well, I guess now that I said that, we need to take a moment to zoom in on that and hear about that experience. Tell me about the posture of that matter, because clearly you left a very happy client.
Mani Walia: Thank you for bringing it up. That brought back good memories. And I think what's relevant for your audience and you is that was a case I litigated just with Steve Susman. So on some of these, on your ledger here of tell me about the things I've learned there, how amazing to be the single associate on a case with Steve Susman. You learn a lot from him in that regard, just watching him. Point two is I was lucky to be at a firm, Susman, where meaningful work flowed down. Lawyers like me, young baby associates or junior associates, got a chance. I think I argued the summary judgment in that case. I took some depositions. This doesn't really happen at a lot of firms because the partner-level lawyers are either tasked or keep the work. So that's part two.
And as far as this case specifically and this nice glowing letter that she wrote, which I hadn't thought of in so many years, that part is something that I'm lucky to have. I'm a communicative person by nature. I'm sure my wife and kids may say too communicative. But what that helps with is clients love updates. Clients love touch points. And that's something that we do in our business now. It's so interesting, and I'm so humbled to say this, our business now at Signal Peak follows so many of these little things that we've learned along the way. So we often give clients non-update updates, as we call them. Like, hey, we'll get you the term sheet in three days. And then we stick to it. People just like to know, in my opinion, where you are in the process, and that their matter is as important to the funder as it is to them. You might feel the same way when you have so many placements. People are wondering, am I going to hear an offer from these firms? If you give that little touch point, as long as it's honest obviously and there's some meaningful component of the information, it goes a long way.
I've addressed the micro of that case and a little bit of Steve Susman. The last thing I'll say about Steve and that firm is that's a tremendous display of trust. Steve Susman, best trial lawyer of his generation, letting me, a second-year associate, do most of the heavy lifting in that case. How amazing is that? He obviously had oversight, so if I started veering off course he could force-correct. But that's something you don't find at very many firms. Maybe now a little bit more, but back in those days, almost none as I can recall.
Khurram Naik: So going back to Susman, I think even just that little blurb hits on those three components: process, culture, and outcomes. So when you think about it, maybe there's other functions you have in mind, but which of those do you think is the dimension you are most emphasizing at Signal Peak?
Mani Walia: It's definitely the first two. Outcomes you can't control. I have all these quotes that I enjoy following. In the old days I used to read a lot of legal books, Supreme Court books. Now I read a lot of business books. But Steve Jobs has this great quote, I think he gave it at the commencement at Stanford some years ago. You can only, when you look back, you've got to trust your gut and move forward and hope you're making successful outcomes. But when you look back, you'll be able to connect the dots on how you did it. So for me, process is the most important thing, because if you're doing things right, then you have to assume that some of the outcomes will be successful. So we're big believers. It's Lawrence's phrase, but what you put out in your community comes back to you. So we think the same way about our process. We have a very detailed, rigorous process on underwriting that comes from some of the Steve Susman guidelines. We don't cut corners there. And when you follow that process and you have the benefit of great sourcing, you end up being in great trades or great investments. And therefore, outcomes hopefully will justify the process. But to me, outcomes is something we don't think about. It's the other two that we focus on.
Khurram Naik: And for underwriting, I know the discussion mentions that you are tracking things. There are the standard things for underwriting: what's the damages case, what's the likelihood of prevailing, you're working backwards to the collectibility. You're working backwards from that. There are somewhat standardized principles you're using. Do you think within underwriting there's some dimension you have a competitive advantage? Maybe it's assessing likelihood of prevailing, based on your trial experience. That's my best guess for what your advantage would be in underwriting. But is there some dimension in underwriting you feel that your team is particularly strong at?
Mani Walia: Yes, I do. And it flows back to macro principles. Put yourself in the trial lawyer's shoes. You can naturally play that part. When a trial lawyer is looking to have his client get funded and goes out to two or three funders, speed is a great currency, because lawsuits are depreciating assets. You want to get it on file. Plus there's an emotional moment. The plaintiff has been waiting around, law firms were waiting around. Let's get it going. We know exactly what that feeling is because we were there.
And here's what we do substantively. We have organized our business at Signal Peak to fund cases that Lauren and I know, that we used to litigate. Lauren clerked for two federal judges. I told you she was a partner in a blue-chip Texas firm. I clerked for two federal judges. We know how to try those types of cases, the ones that we fund. So here's what we know in underwriting: we exercise so much speed that we get to term sheet and finality while other funders may still be hiring somebody to underwrite, because we do so much underwriting ourselves. We just happen to move faster. So that's one tangible aspect of our underwriting, we do it ourselves for the most part, which does put a lot of work on us, which is why we limit the things we fund to things that we litigated before.
If you give me a patent case and five claim charts, I can go through it pretty quickly because I speak that language. You won't find us funding injury cases or international arbitration disputes with foreign countries. I just don't know that area, neither does Lauren. So that's how we cultivate an underwriting advantage, going off from what we know trial lawyers and their clients want, which is, come on, get me an answer. We beat a lot of our competitors on pure speed. Obviously you can't just shortcut and be like, yes, this looks like a good case or it doesn't. You need to have the horsepower internally to be able to do it. And we're lucky in that regard.
Khurram Naik: And I think speed also ties to your principle earlier of the Jeff Bezos concept of making decisions with 70% of information. My first question is that speed is, I think for a number of litigators, for lawyers, a bit of a challenge in that they're used to really thinking things through, careful creativity, and accustomed to whenever possible having the time to really think something through, make a thorough analysis. Is there something that you're doing at Signal Peak that is operationalizing aspects of sourcing, underwriting, etc., to make it easier to get through this process and make decisions? How are you able to achieve speed through operations?
Mani Walia: We use the screening process and tools that we have developed from our own database and publicly available sources to filter cases quickly. So this helps us with speed. Let's say in any given month, we're looking at 50 cases. Maybe half can be filtered out without us using any human capital. For example, we have a formula on, well, if the best-case damages here are a certain amount, and people don't come to us for those types of cases, we screen out just by putting it into our system, our financial system of, does this case even meet the sort of financial type of big-stakes cases that we're looking for. So that's one way we do it, which is by the model and filtering out.
We also employ checks and balances at our firm, which does help with speed. Lauren and I, we think that we have proficiency on most complicated types of business litigation that's out there. Our colleague Jackson, someone I used to work with at my previous company, he basically runs the financial analysis in parallel path. So back to speed, if we need to tell someone we're going to fund their case, we can't just fund a meritorious case. It's got to also have enough return for everybody. He's doing that in parallel path, and that helps us with our underwriting speed.
Khurram Naik: So going back to your partnership, how did you come to, you mentioned that you were competitors, how did you come to decide you should partner together? How do you choose partners in this work, or generally? What are the principles you use to determine who would make a good partner?
Mani Walia: I've never answered that question. And it sounds almost like something out of a Disney story or something. I only had thoughts of ever partnering with one person after I left my previous company, and it was Lauren Harrison. There's many prongs, it's not as simple as that. But she fit everything that I could possibly want to have in a partnership.
Number one, I admired her work. Number two, I knew she's a person of very high integrity. She was a funder in the community, so I knew all this about her reputation. We had worked together before, putting on panels at conferences, so we had a working relationship.
Number three, there's a personal connection that's very unique. Her husband, Jeff Harrison, at Susman, a larger-than-life, phenomenally successful trial lawyer, was basically someone I looked up to at Susman. I went to trial with him. So I knew of Lauren through him. And I thought so highly of Jeff. Like, that letter that you had of Dr. Cassambier, if Jeff ever wrote anything nice about me at the firm, I'd print it out and put it in my office. That's how highly I thought of him. As you're coming up at law firms, you look up to these partners.
And then putting on my business hat, which has really developed over the last five to seven years, it made so much sense to partner with Lauren in this sourcing world, this alpha world of top trial lawyers wanting to work with you. If you're a top trial lawyer, there's no one more top than Lauren. She is in many respects a leader in leadership groups down here in Texas. People look up to her. Parenthetically, my wife used to practice law at the firm Lauren was at, Vinson & Elkins in Houston. And she also looked up to Lauren. And although they weren't in the same practice area, Lauren would give speeches to young associates all the time. So basically that was the confluence of factors. There was no one else that has all of those qualities, and she fits our Texas trial lawyer theme. It was just a perfect fit. I'm so thrilled that she agreed to join. She's not at a point where she may need to work, but it was just such a great thing to be able to join up with her.
Mani's thoughtfulness about choosing a partner with complementary strengths and shared values echoes what Rakesh Kilaru shared about building Longford Capital, where finding the right co-founder with aligned instincts was just as important as the fund's investment thesis. Check out my episode with Rakesh Kilaru.
Khurram Naik: Is there anything special about how you, in the context of law firms, clients, and funders, there's that triangle where alignment is important. Is there anything unique you think you're doing in your fund around alignment that is effective?
Mani Walia: Yes. In our fund, it all comes full circle because most of the cases have unique alignment. Let's just use a clear example. We're not funding a lawyer at a hundred percent of his or her hourly lodestar, because if you think about it, what's the incentive for this lawyer to get things settled? You've got to have more of a stark alignment with the lawyer. Because we find that on a deal-by-deal basis, our fund is unique insofar as we present a batch of these very aligned cases, which is just hard to find.
Without going too far down the rabbit trail, nine of the top 20 litigation-only firms are in the state of Texas. That's because Susman Godfrey started here in 1980, and there's a whole list of others that you might know on that big list. AZA is on there, that I know you're familiar with. Gibbs and Bruns, another great Texas firm. I'm not suggesting we work with all these firms, but what I am suggesting is because all those firms exist here in Texas and a lot of them in Houston, we have access to these firms who believe in alignment a little bit more than a standard big firm that generally makes its money on an hourly lodestar. Because of that, we source a big portfolio of those. And one of our fund's calling cards is investors will note, gosh, your deals have such alignment with the lawyer that it makes it very captivating for them to see that type of alignment.
Khurram Naik: My question is, say with you and Lauren and with your investors, is there nothing that you think is novel? Can you describe the first principles you're using for how you align that team and those investors?
Mani Walia: Maybe one thing that's novel about the alignment is we on purpose structure our fund to be, relative to our peer group, smaller. And part of the marketing of that is investors recognize that we don't have the pressure to stuff cases in just to hit our minimum target. We'd rather do these smaller funds more often and not have the pressure of having to keep it going so long to find less attractive cases. So that may be one alignment calling card.
The reason we're able to do that is we source so quickly that by the time we close a fund, we already have 75% of the cases ready to put into it. And then onto the next. So it's a very rinse-and-repeat, continuous process. And maybe by comparison, some larger funds may not have that alignment because, let's say they've raised a billion dollars and they take their management fee, maybe the LPs are thinking, well, the cases are bad, what does the manager really care? They're already making a terrific return off of the management fee. I'm not saying there's a clear example I have in mind, and I presume no one in industry acts that way. But you can think how investors may think about it. They'd rather see a small fund where you're not getting wealthy off the management fee, but you've got a real incentive to make sure you picked well in your 20, 30, 40 cases in your fund.
Khurram Naik: Are there any properties you're looking for in investors?
Mani Walia: Part of the charm, and I feel tremendously lucky to now co-lead this company with Lauren, I've gone from associate at a law firm, albeit the best in the country, putting on a pure legal hat, to being able to say, how many people get to be in the position I'm in. Part of it is because our anchor investor is someone I used to work with when I was at my previous company. I've been around with them for several cycles. I'd love to have a repeat investor base of people who are like-minded.
Here's an example. We love university endowments. When you make money for a university endowment, where does that money go? It helps pay scholarships for academic need, or for people who may not be able to go to that school without the return you're delivering. How fulfilling is that? In my world, I can help a plaintiff access great lawyers and take on big tech companies, and make money that he or she then uses for their business. Or in one example I had from my past, someone built a family foundation for future tech entrepreneurs. How amazing and fulfilling is that work? And if you can pair it with LPs who are doing the right things and serving good causes, it's amazing.
So basically we look for repeat LPs. If we can be choosy, and it's not always the case that someone can be choosy, I prefer our LPs not to be just professional money managers on Wall Street. I would prefer them to have a mission that resonates with us. Because all of the work that we're so lucky to do fits this nice circle. I don't make any mistake or sound cookie-cutter about it. Returns are important and we couldn't do this business without making returns. But you could make returns and make an impact at the same time.
Khurram Naik: So let's go back. You talked really early on about your training from Susman. You're advocating for more litigators to become entrepreneurs. And you're saying that lawyers are especially good at going through task sheets. Tell me more about that concept and how you implement that today. Let's get into brass tacks. How do you organize tasks you work on and get through them? Because I think operations are a very under-discussed aspect in law and business generally. I have noticed that two out of the three federal judges I've interviewed had both talked about process and case management as being highly underrated. So I'm curious to hear about how you think about the operations by way of this concept of being a task sheet leader.
Mani Walia: The task sheet leader is something I think I just coined. So if it sounds hokey, you can blame it on me. I think it resonates for me personally, and I wonder, and you may have a better sense of this, I bet it applies for a lot of lawyers. If some folks are listening to this and thinking, gosh, should I take a step and do something that's out there that I thought about, but it's risky, we have a really good skill set.
I love the quote, I think it's Edison: vision without execution is hallucination. And at my old firm, people would look to me for coming up with processes. And that's where I thought about this task sheet leader mentality. I think it's tremendously beneficial. Operations does get stuff done. Yes, you have to have some idea, come up with 10 ideas and pick one or two or three that work. But then you can't get anywhere without being extremely, almost obsessed, with the process and setting up an organized structure.
Here are things that we do, and again a lot of this I was lucky to learn from Steve Susman. We keep a master task sheet at our firm with all tasks that need to be done, and we have a weekly call to discuss it. Again, this is a practice I learned at Susman. And something we do, it keeps everyone organized on a weekly basis.
Another process that we use: I've never liked it when someone says on email, oh, this would be a good idea to capture and we can do it, and it just dives into a black hole. So something else I've said to folks is, let's not let any idea fall into a black hole. We have someone on our team who is specifically charged, she's a paralegal by training, and she's so organized. She makes sure to capture those stray things and put them on our monthly agenda. For what I talked about earlier, once a month we get together with a cup of coffee or a figurine or maybe people should have a glass of wine, and we just sit and talk slowly and think about, this was an idea someone raised on email, should we actually put it on our daily and weekly list and have someone assigned to do it?
Another principle: one riot, one ranger. It's another Steve Susman principle. Every task that's on our task sheet has one assigned person to do it. I've recognized, and again I owe this to Susman, you don't need five people doing one task. Then you get the tragedy of the commons. No one knows who's doing it. You assign one person and their job is to come back and say on the next weekly call, this task is done. If you're curious about the process, here's how it went. So those are some daily things.
And the last thing I'll say about this, using my own example, starting this new company with Lauren, we had a master overarching, like an omnibus timeline where we said, January 1st, pick a name. January 15th, office space. If you give yourself deadlines, which forces you to be organized, then you've got to hit them. Because lawyers are good at that. Most lawyers I know, when the court says your brief's due, that brief is going to be in.
So that's what I found. And not a lot of this is probably written in Harvard Business School stuff because it's so intuitive. It's so intangible. But forcing yourself to have a task sheet, forcing yourself to have this monthly loose-goosey ideas generation where you can talk about new ideas and help steer the ship, don't let ideas fall into the black hole, make sure one single person is accountable for certain tasks. They have done wonders for me. And I owe so much credit to people who I've formulated these ideas from. They guide our firm. We get a tremendous amount done with our small, lean team because we're very clear about the tasks.
Khurram Naik: How much wiggle room do you have? When you raise a fund, you're telling your investors you're committed to doing certain kinds of things. There's a wheelhouse you're going to stay in. There are certain kinds of assets you can acquire. There are some guidelines for how you're approaching, and hopefully there's some creativity as well. Something I've observed about my business, it's two and a half years old, is that we're often redirecting and pivoting and saying, okay, now we have this new data. You're talking about data before. And it's like, we have these new insights from our performance, from our outcomes, proprietary information that leads us to some new insight for how the business should be directed. For instance, this past year, I had 15 placements. It had been repeat litigators. And so the signal from the market is very clear, this is the value you're generating, this is your alpha. And so that's something we use, that data, to say that's going to be our focus for at least the next year or so, potentially indefinitely. So how do you use data insights from your performance or new ideas coming up from first principles? I know it's a much-abused phrase these days, but how do you use that to shape your direction? What has changed in your business since inception, and does that give us a clue for what could change in a year's time?
Mani Walia: One thing that changed from inception is we found value in cases from a source that we didn't contemplate before. I'll give one example. There are sometimes claims out of bankruptcy that I never thought that we would find to be potentially compelling to put in the fund.
And so here's our process on melding first principles with having the flexibility to do so. We're not a public company. We're a private company. Our mandate is defined in the fund documents of what we can do. One of our first principles was, although we're super focused, you could probably get a feel of how focused we are following cases that we've litigated or the kind of cases we fund, but our documents allow us to be anywhere in the commercial litigation space. We have no idea, no incentive, and no background to ever get into mass torts and that kind of stuff. But we're allowed to get anywhere we want in the commercial litigation sector. We choose to be in the specific ones that allow us to go fast and all the stuff I talked about for the sourcing advantage.
But here's how we do it. Every month we sit around and we say, what are the trends we're seeing? And someone may say, listen, we're starting to see tremendous value in the international arbitration space. And then what I'll do is assign someone at that meeting, say, write a short memo on this. Because the monthly meetings, we use as a way to steer the ship. You can't really change things on a daily basis when you're just so in the grind. And frankly, maybe we could do it every quarter, or at least once a year, but we do it every month. Everyone on the team, we tell them, this is a chance to steer the ship in a different way.
So let's go down this hypothetical. Let's say someone says, I'm seeing tremendous value in potential international arbitrations or patent cases in Germany. Then we test that person with making sure it's not just something that's going to be said and fall into the black hole. A short memo, convince us. And if we are so moved by it, then in the next iteration of the fund, our funds go very fast, we can broaden the language and change.
So that's hopefully as real an example as I can give where you see everything coming together. I have never experienced someone on a weekly call accomplishing his or her task coming up with a great idea that changes things right then and there. You have to sort of pressure-test it in the weekly or monthly setting and then make sure we've got group momentum. And then we're able to change the way the ship is steered.
Khurram Naik: Are there any metrics you're measuring on a quarterly or monthly basis?
Mani Walia: We do measure our intake. Intake means possible cases we can fund. I spent so much time earlier talking about sourcing, so that is something that we follow and track. And here's an example. If we ever noticed that our sourcing was dropping, and this is a counterfactual example, but because of all of our processes, we have a monthly check-in, someone would say, here's our sourcing for the last three months. And let's just say, counterfactual example, we're down to three cases we've sourced in the last month or something ridiculous like that. We would immediately say, okay, this warrants a deep-dive discussion. Let's put it on the calendar, and everyone come up with some ideas on his or her own. Let's have another slot, come up with the five best ideas and start improving.
Because we're so lean and because we're so organized, if I can say that about ourselves, we get things done pretty quickly. We're a nimble operation. And going back, that's also a very important part of our sourcing. Because we're nimble, when we have cases where we know there's value, and the trial lawyer says, it's important to me that the client has some money for this or that, we're so nimble we can decide almost on the spot or within a quick ad hoc meeting and get back to people.
Khurram Naik: What's the tech stack that your business runs on?
Mani Walia: We have a platform where we centralize everything. It's not deep tech, but basically we have a platform where we have a collection or reservoir of every case we've ever looked at, what's the status of that case. We automatically track that case. So let's say there's a case, most of the cases that come to us we pass on, but our tech allows us to follow that case. And that way, if we see that it actually did achieve something or we were wrong about some risky facet of the case that never materialized, we can course-correct. And then again, going back to the holistic approach, we would course-correct at a monthly meeting where someone on our team is responsible for saying, here's two cases we passed on, here's how they're doing.
And then we're humble enough to be like, man, here's a lesson learned on that. That's another thing I learned from Steve Susman. We do lessons learned after each investment. Go to our bad, right? Sometimes you want to just pat yourself on the back, but there's still something to learn. It's like, keep refining your skill set. If LeBron can keep practicing after all these years, we certainly can learn from how we've passed on cases and how they've done, and what cases we've had success on.
This discipline of doing honest post-mortems and learning from both wins and losses is something Priyanka Timblo also emphasized when she described how reflecting on outcomes shaped her approach to complex litigation. Listen to my conversation with Priyanka Timblo.
Khurram Naik: Can you share a specific insight? I think there's probably multiple components that go into it. There's the prevailing itself, all the things you talk about in diligencing, the damages, how you prevail, all the different components. But there's also the intangibles of assessing the team and other criteria there. So what, was there some recent pattern you'd identified in the matters that you passed on that had some beneficial outcome? What were the types of beneficial outcomes as a pattern, and what was the insight you generated from that pattern?
Mani Walia: Yes, two examples. One, there was a moment in time where I allowed myself to get shortsighted on IPR, inter partes review. For those who are not as focused on it, it's an administrative tool that the US Patent and Trademark Office has. It was underutilized or not utilized while I was in practice 10, 12 years ago. But then all of a sudden it came back on expiring patents as a very powerful tool for defendants.
To answer your question, we passed on some cases where I thought, gosh, I've been recently biased. We just had a string of bad luck on IPR cases. Let's pass. When we went back and holistically looked, it really was prisoner of the moment, short-term thinking. But because we have these processes where we're accountable to each other, we track and we can come back and say how are things going holistically, we course-corrected and gave IPR its appropriate, not over-the-top, weight in our factor analysis.
The other example, something we've learned, is I never used to underwrite whether the lead lawyer is going to retire. We've always underwritten, like, let's say we're going to do a case with Joe Schmo at Quinn, but we heard that Joe Schmo may go to Boies Schiller. Do we like the rest of the bench at Quinn? I'm making all this up. But I'd never really thought of, well, what if Joe Schmo retires? And that's a big difference. When you have these cases that may go to trial, the lead lawyer often has the perfect blend of moxie and charisma. Not to say other lawyers on the team don't, but maybe it's something that's worth analysis. So that's something else we've course-corrected in a positive way. We had an experience that was positive, and then we realized we need to really analyze that. Going back to the holistic approach, we now have that as part of our underwriting analysis. I talked about the five big pillars: damages, legal merits, collectibility, financial analysis, duration. And some of those have prongs, and one of the prongs when we look at the lawyer is, are they about to retire? Someone's 64 and the firm requires retirement at 65, think about it.
Khurram Naik: What are some common reasons you pass on a case?
Mani Walia: On the surface, oftentimes, I'm trying to do this for our patent audience here, venue and damages. I know I'll give you two. Oftentimes a great-looking case, great lawyers, strong infringement charts, prior art search comes back and there's not much likely stuff out there, defendant is someone you know is collectible, but the venue puts you in, I'm making this up, the Southern District of New York or the Northern District of California, and you're really worried about how long the judge will take or if you might get tossed on summary judgment even though you don't think it should be. Sometimes the whims of the judges, particularly in districts that are not really patent-friendly, can really alter a case. So I would say the biggest reason that we have turned down otherwise perfect-looking cases or unicorn-looking cases is venue is just very challenging. That's a function of recency bias. 10 years ago, pre-TC Heartland, none of us had to worry about that as much. You may not have ever thought about it. Back in my day, you could sue five defendants in the Eastern District of Texas in the same case.
Number two is damages. The Federal Circuit, to be very specific here with your audience, has just made it, it seems, more challenging to get big damage awards approved or affirmed. So this is like a first-world issue to say this, but it comes from our monthly meetings. We sometimes will pass on cases where the damages are too high. Talk about what a weird counterintuitive thing that is to say. But you've got to think, is it settleable? Sometimes defendants will say, look, I'm not going to settle this thing because I'll win at the Federal Circuit. We have passed on that, and surprisingly it's probably the second big area of us passing. People may think, my goodness, what kind of first-world issue is that, but it really is an issue. A judgment is just a piece of paper. You've got to get it affirmed or got to get it settled. So those are two areas, and it all is holistic. It's part of our underwriting now.
Khurram Naik: That's super interesting. Then also on underwriting, I'm not sure if you can say it's a post-underwriting function, but choosing counsel or working with counsel. How do you think about that? Because you mentioned a lot of big brand names, Susman, Quinn, and Boies Schiller. Are you betting on those platforms? Are you betting on up-and-comers? I've seen other funders that I think favor working with up-and-comers, then having repeat work and flows there and iterating. How do you think about large, set-with-platform particular experience versus up-and-comers?
Mani Walia: We're really, I know we have been throwing out these examples, and the Quinn and Boies, I just threw them out. No active cases. It's just easy for people to follow along because everyone knows those names. We're agnostic. So much of the benefit of what we do is the people and this virtuous cycle. Again, the LPs that we like are repeat LPs, have a mission. The deal flow that we do is a lot of repeat. But about 10% of our cases come to us without counsel. It's a more recent phenomenon.
So therefore, it comes on us, Signal Peak, to match it up with the right lawyers. Just from very recent stuff, in the last few weeks, I've sent matters to a very small firm in New York that happened to be the right fit in my view for that case because it was the right technology, and it's a small spinoff where I know some guy I used to go to law school with or was on law review with. So again, it goes back to trust and relationships and networking. He's a great guy and he's a great lawyer. That firm seemed to be the right fit for that case.
I've had cases where it comes in without lawyers and it happened to be the perfect fit for a huge AmLaw firm because they have a person there who's done this type of case often. So I'm kind of agnostic about premier brand versus up-and-comers. Oftentimes you can find amazing alignment from up-and-comers, so there might be a little sort of thumb on the scale for that as well, because they don't have such a high overhead where they need to say, we need to be paid by the hour.
Khurram Naik: And then how do you think about, so you're making a concentrated bet that you are focusing on patent litigation. Within that domain, how do you think about the bets you're making? Are you looking to have uncorrelated bets, or are you looking to have concentration? Like, maybe you're saying, I'm really bullish on a particular kind of technology, or I'm really trying to do these kinds of competitive disputes. Within that domain, you've got a wheelhouse of patent litigation, that's a concentrated bet of some kind. Within that domain, are you further concentrating or diversifying? How do you think about that?
Mani Walia: Maybe a little bit of both. And here's what I mean. Back to our macro, at our monthly meeting, we also have a little bit of time where we look at the portfolio. We have guidelines for the portfolio. One thing to just note and correct is we don't exclusively do patent cases. I've just been bringing it up because it resonates with your audience and you and me, and we are both patent lawyers. But our mandate is broader. And even if I wanted to do all patents, I think that would be too concentrated because there are tremendous value cases in other areas as well.
Going back to this, we have macro principles on what's our aspirational sort of number, like percent of the portfolio. Do we want 10 percent patent cases, do we want 60, do we want 90, do we want 20? And the way we do that is at these monthly meetings, before we launch a fund, we're aspirational. We list it out based on all the things we've learned.
Then on the deal-by-deal basis, within a subsector, let's use patent, I try to follow the principle of using kind of a sports analogy, like if an NFL team is drafting or an NBA team is drafting, sometimes they don't draft for need, they just draft the best player available. We do the same thing. Whether we funded three straight semiconductor cases, I'm agnostic to that when the fourth one comes up that happens to be the best for that time. So on a very deal-by-deal basis, we're not looking across technology and capping ourselves saying, oh, we just did two semiconductor cases, we're out. Because I think that would cause us to pass on tremendous value cases, kind of the inverse of that IPR example where I was like, oh gosh, IPR risk bit us twice, let's not do it a third time. I think that's shortsighted because it doesn't affect the overall portfolio in terms of concentration.
Khurram Naik: You're finding and learning as you progress. So if you could, is there anything you would do differently about launching the business with the insights that you have now?
Mani Walia: I'm pausing on this one. This is so fun to be on your podcast because these questions may have roamed in my mind, but no one's ever asked me. This sounds almost cocky, but the answer is no. And the reason for it being no is I did get to help start a business within a business while I was at my predecessor, my previous company. And so there probably were lessons there about team and focus that I did learn. But again, this is another attribute, I think, of risk-averse lawyers. Let's stipulate lawyers generally are risk-averse. Yes, we like task sheets. I feel like because I learned it once and I didn't want to go through it again and not learn the lesson, everything that we have done at Signal Peak has been by design to remedy some of the things that I didn't like from the past. So the answer to your question is no, I would do it the exact same way again. And I'm so lucky to say that, but it's because learnings happened earlier at forks in the career path.
Khurram Naik: What's the part of the business you think is going to grow the most this year?
Mani Walia: We are seeing tremendous demand for patent cases to get filed. I know this is a patent background for me and you, but it didn't mean to come out this way. It just sounds made for this podcast because the new head of the Patent and Trademark Office is not allowing IPR to be used in the way that it was before. There is great enthusiasm from patent holders. There have literally been conferences called "Return of the Patent Inventor." And we are just seeing everyone come out and say, this is the time, and they're trying to get lawyers. So there's tremendous enthusiasm there.
That doesn't mean all those cases are going to get filed. The system needs to weed out some cases. Some patent inventors may have something that should have been invalidated, or maybe damages need to grow a little bit. But there is, because of that great enthusiasm, we're seeing a lot more opportunities, which means we'll find more to put in our fund from that background.
Khurram Naik: So we're going to head into our final question here. You're a marathon runner. You run a lot, which is super hard, especially running a business. And you've got kids and a partner. So I guess one question is, how do you find time for all that? But then, what does it do for you? What do you think the impact of running is on you and your work?
Mani Walia: I hope my kids listen to this part because it is such an important part of my life. And I'll answer the question, but I'll note that Lauren is a competitive equestrian and she's a top placer in Texas. So we must have some shared DNA. Jackson, who I mentioned earlier, is a competitive weightlifter and he does competitions. So there's something in our DNA. And part of it, we always joke that some of our camaraderie, we feel very connected on so many levels.
Running is tremendously important for me. And I wonder if any young lawyer out there is thinking that he or she is too busy to find something. I hope you do. Because I've been running for a long time. I ran all growing up. I run all sorts of races. But on my everyday run, which will generally be early in the morning because of the demands of fatherhood and working, it is so good for my mental health and my work.
Here are real examples. I listen to a lot of business books, and you learn something by reading about people who've done it before, so you can emulate or grow. So I listen to a lot of books, that's reason number one. Number two, as I'm running, because lawyers are as you said type A, maybe risk-averse as I've said, maybe worry-ish, I find myself in my daily life magnifying blemishes or worrying too much. When I run, that goes out the window. And I can actually be like, gosh, I'm distilling these five work worries down to two, and here's my plan for these two. So many times during my run I will stop really quickly and stop my watch, since I time everything, and I have a little task sheet on my phone, one of these apps, and I will jot down something.
The third way is, if I'm not running super early in the morning, I will take internal work calls, most likely with Jackson. I don't think I would call anyone else. I certainly would never call a funder, lawyer, or an investor. But if I have some idea and he happens to be free, I'll call him and say, hey, what do you think about this? So I get a lot of ideas as I'm running. Incidentally, he's taken calls from me or he's made calls while he's been at the gym. So he must have the same kind of thing.
I do think that really helps. And obviously being in good physical shape, it's good for us as we get into this next season of our life to want to spend time with our kids. But I think running is more mental for me on the positives for work than it is even the physical stuff. My wife jokes that if I ever stop running, I'm going to turn into a big grouch.
Khurram Naik: Just in describing that with your team, that's tremendous alignment there for how you move, in the most literal sense, and think. And so I think that's remarkable that we've honed in on that. I think the dimension that was latent in all this is your network and how you built it, how you built people who keep wanting to come back. And I know based on previous conversations there's so much there. So I guess I'll have to wait for round two. I want to thank you so much for round one. This has been tremendous.
Mani Walia: And as I mentioned at the beginning, I look down at literally everyone you've interviewed. It's a great roster. So it's a testament to your own network. And I'm lucky to be part of this group. Thank you for spending so much time with me, not just today but in some of the preparation meetings as well.