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Attorney Fee Acceleration: A Solution to Law Firm Cash Flow Issues [Sponsored Post]
Plaintiffs’ contingency fee litigation is costly and risky. Occasionally, fee delays and litigation costs can build up, leaving the firm in a bit of a slump. Working with traditional lenders can be troublesome. These cash flow issues can seem overwhelming, but fortunately, specialty litigation finance companies offer a solution in Attorney Fee Acceleration. Fee acceleration is when a specialty funding company offers an advance on an attorney’s legal fees when a settlement payout has been significantly delayed. This product, offered by certain legal funding companies, can help contingency fee attorneys who are struggling with difficult cash flow issues.
Contingency fee law practice is an inherently risky endeavor. For one, contingency fee attorneys do not charge an hourly rate, and do not accept payment until after a settlement has been awarded and paid. This means that an attorney can go the entire duration of a case without receiving any payment. Secondly, contingency fee attorneys often invest their own funds into cases and the firm’s other expenses. It’s uncertain whether there will be a return on investment at the end of the day; cases can be lost, or settle for less money than anticipated. Moreover, attorney fees can be challenged by the judge, defense, or client, and wind up being reduced. It’s uncertain whether or not the case in question will even settle favorably. Cases can be lost, or settle for much less than originally anticipated. Basically, attorneys invest incredible amounts of time, energy, and capital into cases that may not make them any money in the end.
The costs associated with litigation, as both plaintiffs’ and defense attorneys are aware, can be enormous. However, defense firms are often more well-off than plaintiffs’ firms, and usually have an easier time financing litigation because they are paid either at the beginning of the litigation process, or are paid incrementally throughout the case. Contingency fee plaintiffs’ attorneys are not, and are responsible for financing litigation without advanced payment. The litigation costs that attorneys are responsible for include discovery, expert witnesses, deposition, document production, and travel, among other things. Financing litigation of a single case, or even multiple cases, coupled with potential payout delays, can create a huge financial burden for contingency fee attorneys. In this situation, many contingency fee plaintiffs’ attorneys will seek financial assistance.
At first glance, traditional lenders seem like a good option because they offer relatively low interest rates and are typically low-risk. However, for attorneys, traditional forms of financing, like bank lines of credit or personal loans, make it difficult to acquire enough money to finance necessary expenses. Traditional lenders seek physical collateral, which attorneys and law firms lack. Many plaintiffs’ attorneys rent office space, so the office could not be used as collateral, and a bank is less than likely to accept an attorney’s desk as a secured deposit. On top of that, the bank will not accept the attorney’s balance sheets as real value. An attorney’s balance sheet is based on projected payouts without any set payout date. Unlike most companies that can use invoices as valued collateral, the nature of contingency fee work is too uncertain for securing traditional loans. Fortunately, non-traditional funders offer services that do not require secured collateral, and have financial services tailored specifically to meet an attorney’s needs. One such service, as mentioned earlier, is post-settlement attorney fee acceleration.
Fee acceleration has many benefits, both in terms of the financial stability that it offers, and in terms of the convenience of application. Unlike a traditional loan, accelerating legal fees does not require collateral, personal credit information, or knowledge of the attorney’s or firm’s assets. Only the delayed legal fee is considered for the funding application. Once an application is processed and approved, a contingency fee attorney can start reaping all the financial benefits of accelerated fees. With access to advanced capital, the law firm can start investing more into current and future cases, which will in turn allow the attorney to collect more fees down the road.
A law firm cannot be successful without the capital to invest in the future. If you ever find yourself in a position where your firm is struggling with cash flow, a post-settlement fee advance may be the best solution. Attorney Fee Acceleration is one of the products offered by RD Legal Funding to provide contingency fee attorneys with the financial boost they need to run a successful practice. Fee Acceleration can help you access the capital you need to grow your firm, invest in new cases, and collect the top litigation resources you can. With a steady flow of capital, you can do the best you can possibly do for your client, which in turn helps you do the best you can do for your firm.
Attorney Fee Acceleration: A Solution to Law Firm Cash Flow Issues [Sponsored Post] is a post from Lawyerist.com. The original content in this feed is © 2013 Lawyerist Media, LLC. This feed is provided for private use only and may not be re-published.
Source: http://lawyerist.com/attorney-fee-acceleration-solution-law-firm-cash-flow-issues/
