Funding for Attorney s and Law Firms9034453

For a representation that practices contingent litigation managing cashflow is quite crucial. Sadly managing ones cashflow is an afterthought for the majority of trial lawyers. Cashflow is very sporadic since they only receive money when cases are successfully concluded. With many cases taking many 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 with the recovery. Inside a contingent case a strong may invest hundreds of attorney hours and tens of thousands of dollars into a case. In case a firm loses a case it loses not only its time but the cash committed to hard costs too. It becomes worse, a firm is not allowed to deduct the amount of money they have tangled up is case costs. Furthermore they have to fund the cash up front nevertheless they have to fund it with after tax dollars. They repeat the cycle and plow the fees from successful cases in to the next band of cases.

The missing ingredient in improving income for most contingent lawyers is something most businesses happen to be utilizing for decades. 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 main tools inside a plaintiff lawyers fight for justice. By utilizing borrowed money to finance litigation expenses a firm can get rid of the negative tax consequences of self funding. The firm actually realizes the wages it is receiving in fees. Any interest a firm pays may be offset insurance firms the money that has been tied up just in case costs readily available for firm expansion and out investments. Nevertheless the biggest advantage is not 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 finance companies to legal finance consultants. Contingent lawyers can and ought to pay attention to the bottom line if they need to continue helping their potential customers.