Funding for Attorney s and Lawyers2954718

For a litigation that practices contingent litigation managing cashflow is vitally important. Sadly managing ones cashflow is an afterthought for the majority of trial lawyers. Cashflow is very sporadic since they only get paid when cases are successfully concluded. With lots of cases taking several years to bring to conclusion projecting ones cashflow can be a daunting task.

Contingent firms typically advance all 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 tens of thousands of dollars right into a case. In case a firm loses an instance it loses not only its time but the cash dedicated to hard costs as well. It worsens, 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 amount of money up front nevertheless they have to fund it with after tax dollars. They repeat the cycle and plow the fees from successful cases into the next band of cases.

The missing ingredient in improving cash flow for most contingent lawyers is something most businesses have already been utilizing for many years. Leverage. Most lawyers have funded costs up front since they started, only because that's how 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. Through the use of borrowed money to invest in litigation expenses a company 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 company pays can be offset by having the money which was tied up in the event costs available for firm expansion or outside investments. However the biggest advantage is no longer using after tax dollars to invest in case development expenses.

We're 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 banks to legal finance consultants. Contingent lawyers can and should pay attention to the important thing if they need to continue helping their potential customers.