Funding for Attorney s and Law offices6651212

For a litigation that practices contingent litigation managing income is vitally important. Sadly managing ones income is an afterthought for the majority of trial lawyers. Income is very sporadic as they only receive 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 every one of the cost of litigation upfront in return for a percentage from the recovery. In the contingent case a firm may invest countless attorney hours and tens of thousands of dollars into a case. If a firm loses an incident it loses not just its time however the cash invested in hard costs as well. It gets worse, a firm just isn't allowed to deduct the money they have tied up is case costs. Not only do they have to fund the cash up front however they have to fund it with after tax dollars. They repeat the cycle and plow the fees from successful cases to the next band of cases.

The missing ingredient in improving cashflow for most contingent law offices is something most businesses happen to be utilizing for years. Leverage. Most lawyers have funded costs up front 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 a plaintiff lawyers fight for justice. By using borrowed money to fund 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 firm pays can be offset by having the money that has been tied up just in case costs designed for firm expansion and out investments. Nevertheless the biggest advantage has stopped being using after tax dollars to fund 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 finance companies to legal finance consultants. Contingent lawyers can and ought to pay attention to the main point here if they desire to continue helping their clients.