Funding for Attorney s and Lawyers5471805

For a attorney at law that practices contingent litigation managing income is very important. Sadly managing ones cash flow is an afterthought for most trial lawyers. Cashflow is very sporadic because they only get paid when cases are successfully concluded. With a lot 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 substitution for a percentage from the recovery. Inside a contingent case a firm may invest hundreds of attorney hours and thousands of dollars right into a case. If your firm loses a case it loses not merely its time nevertheless the cash invested in hard costs also. It gets worse, a firm isn't allowed to deduct the money they have bound is case costs. Not only do they have to fund the cash up front but they have to fund it with after tax dollars. They repeat the cycle and plow the fees from successful cases in to the next number of cases.

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

A revolving credit line can be one of the main tools inside a plaintiff lawyers fight for justice. Through the use of borrowed money to invest in litigation expenses a company 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 can be offset with the money that was tied up in case costs readily available for firm expansion and out investments. Nevertheless the biggest advantage is no longer using after tax dollars to fund case development expenses.

We have been in a time where trial law firms have more options than ever before when it comes to financing their practice, from traditional banks and specialty finance companies to legal finance consultants. Contingent lawyers can and should pay attention to the main point here if they desire to continue helping their clients.