Attorney Funding Can Help Law Firms Enjoy Long-Term Success

Shay Morrigan | March 19th, 2013

Attorney FundingMore and more lawyers are working on a contingency basis, which provides superior benefits to plaintiffs, but can leave attorneys with cash flow problems. Personal injury lawsuits and other types of cases can take months if not years to go to trial, during which time attorneys are likely to rack up significant costs that can significantly challenge their working capital.

Having the funds you need to successfully represent your clients is critical to your long-term success. Even a short period of time without the proper cash flow can put your firm at risk. LawStreet Capital offers attorney funding to help support law firms who may be waiting for a number of cases to resolve, and need an emergency influx of cash to cover the costs until settlements or verdicts come in.

Attorney funding can help cover costs

The reality of today’s world is that many more plaintiffs have come to expect that attorneys will work on a contingency basis. This is the best way to secure clients for your firm and to reach your goals of growth and prosperity. It is a risky business, however, and requires that you have substantial capital to run your practice.

Most likely you have secured the capital you need for basic business operations, but sometimes even the most successful attorneys can get into a cash flow crunch. Trial delays can stretch litigation out for years. Some cases require substantial investments to prove the plaintiff’s claims. Even when you reach a positive settlement or verdict for your client, you may still have to wait through the appeals process to be completed before you actually see any of the funds.

Attorney funding – also known as legal funding – can provide your firm with the cash flow you need to successfully pursue justice for your clients without exorbitant fees or outrageous interest costs.

When legal funding may come in handy

When might attorney funding be suitable for you and your firm? You may benefit from it either while pursuing your cases, or while waiting for settlement funds. Whenever you are strapped for cash, settlement loans can help tide you over.

Newer law firms, in particular, can become bogged down by relying on the availability of bank loans or bank lines of credit for their working capital. When facing defense attorneys with deep pockets, attorneys may feel pressured to settle for less than the true value of the case if they are struggling financially. Attorneys who have many cases pending, or who may be waiting on settlements in some, might no longer be able to adequately market their services or support new client cases, which can hurt the business over the long term.

Settlement loans are a smart option

Rather than pursuing a traditional line of credit with a bank or other financial institution, attorneys can apply for legal funding, which is like a cash advance on your firm’s future settlement earnings. Attorneys may also apply for settlement loans, which are cash advances on pending settlements.

Lenders at attorney funding companies evaluate your current open cases to determine how much you may qualify for, then issue you a cash advance to cover your expenses in the interim. You pay the money back when you receive the verdict or settlement funds.

Attorneys may use the funds for any of the following purposes:

  • Pay down litigation expenses
  • Fund larger cases
  • Increase your marketing budget
  • Fund payroll expenses and operating expenses
  • Hire expert witnesses
  • Secure litigation support
  • Manage tax distributions
  • Support new client cases

How to apply for attorney funding

If your firm is feeling the strain of limited cash flow, call LawStreet Capital today for more information on our legal funding options. We offer a no-hassle application that requires no credit check. Once you’re approved, you can put the funds to use without having to worry about monthly payments or out-of-pocket expenses. Simply pay the money back when you win your cases. Call toll-free 800-345-8500.