Funding for Attorney s and Law offices7598376

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

Contingent firms typically advance all of the cost of litigation upfront in return for a percentage from the recovery. Inside a contingent case a company may invest hundreds of attorney hours and tens of thousands of dollars right into a case. If your firm loses an incident it loses not merely its time nevertheless the cash dedicated to hard costs too. It worsens, a firm isn't allowed to deduct the cash they have tied up is case costs. Furthermore they have to fund the amount of money up front however they have to fund it with after tax dollars. They repeat the cycle and plow the fees from successful cases in to the next group of cases.

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

A revolving personal credit line can be one of the main tools in the plaintiff lawyers fight for justice. By utilizing borrowed money to finance litigation expenses a firm can remove the negative tax consequences of self funding. The firm actually realizes the wages it is receiving in fees. Any interest a firm pays could be offset by having the money which was tied up in case costs readily available for firm expansion and out investments. However the biggest advantage has stopped being using after tax dollars to finance case development expenses.

We're in a time where trial law offices have more options than ever before when it comes to financing their practice, from traditional banks and specialty financial institutions to legal finance consultants. Contingent lawyers can and ought to pay attention to the bottom line if they need to continue helping their customers.