Funding for Attorney s and Law offices9081383

For a chisinau that practices contingent litigation managing income is vitally important. Sadly managing ones income is an afterthought for many trial lawyers. Cash flow is very sporadic as they only receive money when cases are successfully concluded. With a lot of cases taking many years to bring to conclusion projecting ones cashflow can be a daunting task.

Contingent firms typically advance all of the cost of litigation upfront in substitution for a percentage from the recovery. In a contingent case a strong may invest countless attorney hours and tens of thousands of dollars into a case. In case a firm loses a case it loses not only its time nevertheless the cash dedicated to hard costs as well. It worsens, a firm isn't allowed to deduct the cash they have bound is case costs. Not only do they have to fund the money up front but they have to fund it with after tax dollars. They repeat the cycle and plow the fees from successful cases into the next group of cases.

The missing ingredient in improving cashflow for most contingent law firms is something most businesses happen to be utilizing for many years. Leverage. Most lawyers have funded costs out of pocket since they started, only because that's the actual way it has always been done.

A revolving line of credit can be one of the most crucial tools in the plaintiff lawyers fight for justice. By using borrowed money to finance litigation expenses a firm can get rid of the negative tax consequences of self funding. The firm actually realizes the income it is receiving in fees. Any interest a firm pays can be offset with the money which was tied up in the event costs available for firm expansion or outside investments. However the biggest advantage is no longer using after tax dollars to fund case development expenses.

We are in a time where trial lawyers have more options than in the past when it comes to financing their practice, from traditional banks and specialty financial institutions to legal finance consultants. Contingent lawyers can and should pay attention to the main point here if they need to continue helping their potential customers.