Funding for Attorney s and Law offices7290108

For a legal that practices contingent litigation managing income is very important. Sadly managing ones cash flow is an afterthought for the majority of trial lawyers. Cash flow is very sporadic because they only get money when cases are successfully concluded. With a lot of cases taking many years to bring to conclusion projecting ones income can be a daunting task.

Contingent firms typically advance all of the cost of litigation upfront in return for a percentage of the recovery. In the contingent case a strong may invest countless attorney hours and thousands of dollars right into a case. If your firm loses an instance it loses not just its time however the cash dedicated to hard costs too. It gets worse, a firm isn't allowed to deduct the cash they have tied up is case costs. Furthermore they have to fund the cash up front nevertheless 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 band of cases.

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

A revolving line of credit can be one of the most important tools in the 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 strong pays may be offset insurance firms the money that has been tied up just in case costs available for firm expansion or outside investments. But the biggest advantage has stopped being using after tax dollars to finance 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 must pay attention to the bottom line if they desire to continue helping their customers.