Funding for Attorney s and Law offices6133504

For a attorney at law that practices contingent litigation managing cash flow is quite crucial. Sadly managing ones income is an afterthought for most trial lawyers. Income is very sporadic since they only receive money when cases are successfully concluded. With a lot of cases taking several years to bring to conclusion projecting ones cashflow can be a daunting task.

Contingent firms typically advance all the cost of litigation upfront in exchange for a percentage from the recovery. Inside a contingent case a strong may invest hundreds of attorney hours and thousands of dollars in to a case. If your firm loses a case it loses not merely its time but the cash invested in hard costs too. It worsens, a firm just isn't allowed to deduct the amount of money they have tied up is case costs. Furthermore they have to fund the amount of money up front however they have to fund it with after tax dollars. Then they repeat the cycle and plow the fees from successful cases into the next group of cases.

The missing ingredient in improving cash flow for most contingent lawyers is something most businesses have been utilizing for years. Leverage. Most lawyers have funded costs with your own money 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 important tools in a plaintiff lawyers fight for justice. By utilizing borrowed money to finance litigation expenses a company can eliminate the negative tax consequences of self funding. The firm actually realizes the wages it is receiving in fees. Any interest a company pays could be offset with the money which was tied up just in case costs designed for firm expansion and out investments. But the biggest advantage is not using after tax dollars to invest in case development expenses.

We have been 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 bottom line if they wish to continue helping their clients.