Law Firm Financing

Author: Alec Schibanoff

The contingency fee arrangements that have evolved in the legal profession are designed to help an underdog plaintiff stand up to a wealthy and powerful defendant. Just as David was able to overcome Goliath despite huge inequities, lawsuit advances help ensure justice even in cases where the two parties in a court room are not evenly matched in terms of financial resources.

Today, a plaintiff who has modest resources does not need substantial cash up front in order to redress an injustice. If a plaintiff has no alternative but to get involved in a court case, an attorney will often take on the lawsuit on a contingency basis. The plaintiff pays for the legal services later out of the proceeds of the settlement. If an attorney is not successful in winning the case or arranging an adequate out-of-court settlement, the plaintiff pays nothing.

While this system ensures that justice does not hinge on the ready money a plaintiff can bring to a case, it does create a unique challenge for attorneys. Just as the plaintiff has to wait months or even years to get a settlement, so, too, does the attorney need to wait for that same settlement in order to receive payment for a case which has already cost the attorney significant time and effort. In cases where a law firm or attorney takes four or five cases on contingency basis, the problem becomes even more difficult. An attorney or law firm still needs to pay their staff and keep the business running, regardless of whether settlements in personal injury, malpractice, wrongful death and other cases have been paid out or not.

Law firm financing may be a solution in these cases. Law firm financing allows an attorney or law firm to get a cash advance against a package of cases. While plaintiff lawsuit advances offer money up front for one case, law firm financing recognizes the unique needs of attorneys and advances funds against a number of pending lawsuits and/or appellate cases.

Law firm financing gives attorneys the working capital they need to negotiate from a position of strength. With immediate money to cover their operating expenses, attorneys are in a position to really help their clients get justice. Thanks to law firm financing, attorneys may not need to accept low out-of-court settlement offers. Law firm financing allows attorneys to more aggressively pursue cases and get larger, fairer settlements for their clients.

In some cases, Law firm financing allows attorneys to take on cases that they would otherwise be unable to accept. By providing attorneys with the financing they need to keep their practices running, law firm financing provides the working capital needed to accept new clients. In this important way, law firm funding helps law professionals grow their client base and their practices.

While most third party lawsuit financing companies only finance plaintiffs, LawMax is an industry leader in law firm financing as well as plaintiff and business lawsuit funding. The LawMax web site (www.fundmycase.com) even has a special section just for attorneys. Law firms can learn about the financing offered to law firms through this resource. Attorneys committed to providing the highest levels of service to their clients, while also laying the groundwork for growth of their practices, will want to consider the funding option that LawMax offers.
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