Monthly burn reports separate signal from noise. These seven line items appear repeatedly as waste — not malpractice, but misaligned incentives — and litigation funders flag them before approving Tranche 2. Understanding them helps claimants and counsel keep non-recourse funding viable.

Keywords: litigation waste, burn report, funder red flags, litigation spend

1. Duplicate document review — same corpus, new vendor, no protocol handoff. Fix: single privilege model owner and corpus hash log.
2. Prestige partner on procedural hearings — when a senior associate suffices. Fix: staffing matrix by hearing type.
3. Chronology wars — 400-page timelines counsel will not use at trial. Fix: issue-led chronology with page caps — watch AI hallucination risk.
4. Expert shopping — three drafts to hear what you already believe. Fix: single joint expert where courts allow; adversarial only when strategic.
5. Motion practice without settlement leverage — interlocutory spend that does not move the corridor. Fix: motion calendar tied to settlement milestones.
6. Brand-new e-Discovery stack mid-case — migration cost exceeds savings. Fix: phase technology changes at case boundaries.
7. Settlement delay premium — one more deposition after a reasonable band. Fix: funder-coordinated corridor discipline.

How funders score waste in underwriting

Historical burn reports showing items 1, 3, or 7 may trigger covenant language on staffing and settlement authority. Items 2 and 4 inflate cost stack without moving merits. Item 6 is a one-time spike funders amortize painfully across tranches.

AI can accelerate waste too

Cheap first-pass review without QC becomes Phase 3 correction tax. AI chronologies without source pinning become chronology wars. Governance beats tool bans.

FAQ

Is any motion practice waste? No — only when decoupled from strategy.

Can funders veto counsel picks? Covenant influence, not micromanagement — varies by deal.

Calculator?Burn calculator models waste %.

Covenant language funders use (illustrative)

• Settlement authority notice before depositions past corridor
• Staffing approval for partner hours below €X threshold on procedural tasks
• Single review vendor lock without committee consent
• Monthly waste attestation from claimant CFO or GC

Fixing waste without killing merits

Target incentives not quality: issue-led chronologies, joint experts where possible, motion calendar linked to settlement phases. AI tools with controls reduce item 3 cost — not items 5 or 7 judgment calls.

Monthly burn review ritual

Week 1: actuals vs model. Week 2: tag variance to seven spends. Week 3: counsel narrative on items >10% variance. Week 4: funder report with waste attestation. Skipping week 3 produces false precision — numbers without story.

Claimant actions that reduce flags

• Single privilege protocol owner named in writing
• Settlement corridor updated quarterly with funder
• Expert terms of reference before instruction
• Review vendor locked unless committee approves switch

Extended FAQ

Are experts always waste item 4? No — only shopping without TOR discipline.

Funder micromanagement? Covenants vary — negotiate at term sheet.

Link to calculator

Model waste % at burn calculator — if waste >25% of modeled burn, expect funder covenant conversation before Tranche 2. Reducing items 1, 3, 6 often fastest win.

Glossary

• Burn report — monthly actuals
• Corridor — settlement band
• Chronology war — oversized unused timeline

Related reading on this site

Continue with linked pillars in this article and the blog index. Machine-readable catalogue: llms.txt. Cost stress-test: burn calculator. Live screening: agents section. Questions: [email protected]. All content educational — engage qualified counsel for your matter.

Related: cost stack, internal costs, Germany brackets, review curve.