Funding for Attorney s and Law offices2289445

For a arbitration that practices contingent litigation managing cash flow is quite crucial. Sadly managing ones cash flow is an afterthought for the majority of trial lawyers. Cashflow is very sporadic because they only receive money when cases are successfully concluded. With a lot of cases taking 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 exchange for a percentage with the recovery. In the contingent case a strong may invest countless attorney hours and thousands of dollars in to a case. If a firm loses a case it loses not only its time however the cash invested in hard costs also. It becomes worse, a firm is not allowed to deduct the cash they have bound is case costs. Furthermore they have to fund the money up front but they have to fund it with after tax dollars. Chances are they repeat the cycle and plow the fees from successful cases to the next number of cases.

The missing ingredient in improving income for most contingent law offices is something most businesses have been utilizing for years. Leverage. Most lawyers have funded costs out of pocket since they started, only because that's how it has always been done.

A revolving line of credit can be one of the main tools inside a plaintiff lawyers fight for justice. By using borrowed money to invest in litigation expenses a company can eliminate the negative tax consequences of self funding. The firm actually realizes the income it is receiving in fees. Any interest a strong pays may be offset with the money that was tied up just in case costs designed for firm expansion and out investments. However the biggest advantage is not using after tax dollars to finance case development expenses.

We are in a time where trial law offices have more options than ever 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 need to continue helping their customers.