Funding for Attorney s and Law offices7596679

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

Contingent firms typically advance every one of the cost of litigation upfront in substitution for a percentage of the recovery. In the contingent case a company may invest a huge selection of attorney hours and tens of thousands of dollars right into a case. If your firm loses a case it loses not only its time however the cash invested in hard costs too. It becomes worse, a firm is not allowed to deduct the cash they have tied up is case costs. Practically they have to fund the money up front however 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 cashflow for most contingent law firms is something most businesses happen to be utilizing for decades. Leverage. Most lawyers have funded costs out of pocket since they started, only because that's the actual way it has always been done.

A revolving personal credit line can be one of the main tools in a plaintiff lawyers fight for justice. By utilizing borrowed money to invest in litigation expenses a strong 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 could be offset by having the money that was tied up in case costs available for firm expansion or outside investments. However the biggest advantage is not using after tax dollars to invest in case development expenses.

We have been in a time where trial law offices 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 must pay attention to the main point here if they desire to continue helping their clients.