Funding for Attorney s and Law Firms9579429

For a arbitration that practices contingent litigation managing income is quite crucial. Sadly managing ones income is an afterthought for many trial lawyers. Income is very sporadic since they only get money when cases are successfully concluded. With many cases taking years to bring to conclusion projecting ones cash flow can be a daunting task.

Contingent firms typically advance all the cost of litigation upfront in return for a percentage of the recovery. In the contingent case a firm may invest hundreds of attorney hours and thousands of dollars in to a case. In case a firm loses a case it loses not only its time nevertheless the cash invested in hard costs as well. It worsens, a firm is not allowed to deduct the cash they have tangled up is case costs. Not only do they have to fund the amount of 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 in to the next number of cases.

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

A revolving personal credit line can be one of the most crucial tools inside a plaintiff lawyers fight for justice. By utilizing borrowed money to fund 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 can be offset insurance firms the money which 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 have been in a time where trial lawyers 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 must pay attention to the main point here if they wish to continue helping their customers.