Tag Archive for attorney fee financing

Structured Attorney Fees vs. Attorney Post-Settlement Funding: The Benefits of Not Structuring Attorney Fees

attorney fee financingMany attorneys structure their fees so they can have a predictable amount of cash flow. There are also tax advantages to structuring their fees which can help them avoid paying a huge bill to the IRS once fees are awarded. Many attorneys are known to have cash flow issues because of the inconsistency court cases can have as well as eventual payment of the legal fee which can be subject to delay for a variety of reasons.

There are those attorneys who like structured settlement companies and hope to build a long lasting relationship with them almost like a bank. With RD Legal Funding’s Attorney Post-Settlement Fee Acceleration product, once an attorney gets funded, they can move on to the next case without worrying about a relationship with the funding company. The product is designed specifically for attorneys who are interested in getting what they need to continue their operations. Structured settlement companies have an array of options to keep the attorney in a relationship, many of which the attorney may not want. That attorney’s next fee could be big enough so he won’t need funding after the fee pays out.

In general, attorneys use settlement funding and legal funding companies when they need to bridge a short term cash flow problem. They are also used when they plan on making a big investment in what may be a huge case. For that case, they will need money for expert witnesses, advertising for new cases, personal plans, or a mixture of all three. A structured settlement prolongs an attorney’s ability to process things faster, basically handcuffing him to the situation.

Attorney Fee Acceleration allows lawyers to cash in so they can make things happen now for themselves and their firm. The future can only be changed by what happens in the present. An attorney is only as good as his next case. Reputation, prestige, and ultimately income are tied to how an attorney performs on his next case.

For many lawyers, a structured settlement may not be what is needed to help them get the competitive edge on their colleagues or help them with their cash flow. Structured settlements are for attorneys who are thinking about the future. Attorney Fee Acceleration is for attorneys who are thinking in the present and looking to advance in the moment. That is something most attorneys have in common, which is being in the moment.


Written by Lulaine Compere.

Black Farmers Attorneys Awarded $90.8 Million in Legal Fees

attorney fee fundingUnited States District Court Judge Paul Friedman has awarded the Black Farmers Class Action attorneys over $90 million in attorney fees using the maximum criterion of 7.4 percent of the settlement. The range was between 4.1 and 7.4 percent of the settlement. The case took a long time to settle given the amount of back and forth in court and the hesitation and somewhat reluctance by many in Congress to provide the funding that would compensate the black farmer plaintiffs and attorneys.

Advocates for the community like John Boyd and other sympathetic Congressional representatives were beating down the doors of government to get their just compensation while the small group of attorneys involved in the litigation won their battles in court. The judge applauded the attorneys on facing the challenge of this litigation and their dedication to seeing to a successful finish.

Even though attorneys were finally awarded their hard earned legal fees, it can still be many more months before they actually receive payment. This is where RD Legal’s post-settlement attorney fee funding program is a solution. RD Legal can purchase any settled legal fee with a payment delay at a discount and provide immediate capital. For more information, please call Joseph Genovesi, Senior Vice President of Business Development and Origination, at 201-568-9007, ext. 140.

RD Legal Offers Funding to Plaintiff’s Attorneys with General Electric Settlements

stock-market-fluctuationsGeneral Electric has agreed to settle a class action lawsuit by its shareholders over allegations it hid its exposure to subprime loans from them. The company is expected to pay $40 million to compensate the shareholders, most of them pension funds, for losses they suffered beginning 2008.

General Electric is one of the most successful companies in the world. Mostly known as a builder of items like air conditioners and light bulbs, its subsidiary, GE Capital, is a huge force in the world of finance. News stories about the settlement detail the plaintiffs’ accusations against GE Capital and their involvement in a 2008 stock offering which threatened the company’s financial position. That move caused them to lose their “AAA” credit rating, resulting in a dividend cut of almost 70%. GE is one of many companies who faced lawsuits because of their exposure to subprime loans.

Plaintiff’s attorneys with General Electric settlements are eligible for post-settlement attorney fee financing from RD Legal Funding, LLC (“RD Legal”) which provides immediate capital on settlements. Lawsuit financing does not require any kind of payments until the fee is paid; there are no monthly interest or principal payments, nor are there any upfront points or fees. Once the necessary documentation is received, RD Legal can wire funds within several days. RD Legal provides personalized service and quick turnaround.

For more information about RD Legal and their cash flow management solutions, please call Joseph Genovesi, Senior Vice President of Business Development and Origination, at 1-800-565-5177, ext. 140. To begin the application process, please fill out our brief online application.


Written by Lulaine Compere

Attorney Fee Financing for Living Social Settlements

living socialPlaintiff’s attorneys involved in the Living Social settlement suffered a huge blow from United States District Judge Ellen Segal Huvelle after she slashed their attorney fees in half. According to various news reports, the attorneys were awarded $3 million initially, but Huvelle awarded them $1.35 million instead. That amount is to be divided between 12 law firms. In light of this recent development, RD Legal is ready to provide post-settlement attorney fee financing to help plaintiff’s attorneys better manage their cash flow.

Living Social was a company that successfully bridged the gap between social media, retail establishments, and consumer wants and needs. In 2011, the company was hit with a series of class action lawsuits over the expired deals consumers purchased on the website. Living Social settled the lawsuits for $4.5 million which was slated to go towards compensating the consumers. The attorneys were going to get $3 million but Huvelle found issues with the award, including how the case was staffed with a large number of attorneys. Eventually, Huvelle in her opinion found the initial attorney fee amount and process of calculating the fees to be incorrect and decided to change it.

For plaintiff’s attorneys with Living Social settlements, RD Legal can provide post-settlement funding, which provides quick capital on settlements. Lawsuit funding does not require any kind of payments until the fee is paid; there are no monthly interest or principal payments, no upfront points or fees. Once the necessary documentation is received, RD Legal can wire funds within several days. RD Legal provides personalized service and quick turnaround.

For more information about RD Legal’s post-settlement funding solutions, please call Joseph Genovesi, SVP of Business Development and Origination, at 1-800-565-5177, ext. 140. To begin the application process, visit http://www.legalfunding.com/apply-now/.


Written by Lulaine Compere.

Joseph Genovesi Interviewed on Legal Broadcast Network

Joseph Genovesi, Senior Vice President of Deal Origination at RD Legal Funding, was recently interviewed by Scott Drake, Vice President of Programming and Director of Content Development at Sequence Media Group. The interview, which can be viewed on the Legal Broadcast Network, discussed RD Legal’s role in the legal finance industry.

 

Scott Drake: Welcome. Legal funding, also known as litigation financing, is a generic term used to describe the mechanism or process through which litigants, even law firms, can finance their litigation or other legal costs through a third party funding company. My guest is Joe Genovesi. He is the Senior Vice President of RD Legal Funding. Joe, thanks for joining for us today.

Joe Genovesi: Thanks for having me.

Scott Drake: Let’s talk about the industry as a whole and how your company relates to it. Legal financing is a fairly new concept. Again, can you explain RD Legal Funding and what your role in this process is?

Joe Genovesi: We have been in this industry for a little over 14 years. Our CEO, Roni Dersovitz, who was originally a plaintiff attorney himself, found out there were some cash flow problems in the world of law. So he developed legal funding. Our primary business is that we purchase legal fees and settlements from attorneys (also known as attorney fee financing), so we are able to expedite them getting their fees.

There are numerous reasons why a collection of settlements are delayed, and that’s where we come in. We recently expanded our model to incorporate plaintiff funding as well but still in the settlement phase. Now the legal funding space in general is growing as you said, but a big part of it is pre-settlement funding, and that’s a part of the industry we currently are not funding in. We strictly focus on post-settlement funding.

Scott Drake: In this particular case, are these kinds of transactions, are they considered loans or are they non-recourse debt?

Joe Genovesi: So we structure everything as non-recourse payments, where we are purchasing the entire fee or a portion of a fee on a settled case, and we take the risk of non-payment.

Scott Drake: Again, talk about some of the benefits of legal financing for the attorney and for the client as well.

Joe Genovesi: For the attorney, it fills a gap in cash flow problems. So if you’re an attorney you could go months at a time without actually collecting a fee. So obviously you have to run your business, pay your attorneys, expert witnesses for other cases, lots of things that take place. So once you settle a case and you find out that it’s going to be another six months or more before you actually collect your fee. That’s the real benefit of our service; we can kind of bridge the gap in-between settlements.

For a plaintiff, it’s really a very similar benefit. Let’s say you won a settlement in a class action lawsuit and you really need your settlement award now, but you are not going to collect it for however many months. With some class actions, it might take over a year to actually collect your award settlement. That’s the benefit of it: we are able to expedite the process of collection for the plaintiff and attorney alike so they can access their fee or fund.

Scott Drake: So again this is a fairly new kind of industry here. I think it’s been around since 1997, if not a little bit earlier. Critics of the industry talk about the emergence of hedge funds being involved in them, there is a high interest rate, there is a lack of regulation. Can you talk about those things?

Joe Genovesi:   The high interest rates involved, it’s almost unavoidable. If you are about to go to a local bank, legal funding groups can’t compete with bank rates, but the benefit of it is a bank can’t value your case inventory or what the settlement is worth.  So, a legal funding company is able to extend you more of your settlement and what pre-settlement feels is they can extend you more against your case inventory than a bank is able to. While they can’t compete with bank rates, they are able to extend a higher line against your case inventory.

Scott Drake: There is still a lack of regulation; it seems your industry is trying to provide some sort of regulation. Can you talk about that a little?

Joe Genovesi: At RD Legal, we focus on post-settlement funding. It’s a little bit different in that it’s not considered a loan, so regulation does not come into play as much or lack thereof. So it’s structured as a finance sale, which is really a different investment vehicle than the pre-settlement lines.

Scott Drake: One other criticism is that sometimes litigation funding is said to encourage frivolous claims. What do you say to that kind of criticism?

Joe Genovesi: Again, I can’t speak into depth about that as I said we focus on post-settlement funding, so we don’t fund anything that doesn’t have a firm settlement in place. So there are no frivolous claims in what we do. We simply focus on settlements. Not being in the pre-settlement realm, I’m not an expert in it, but I can say that most pre-settlement groups do their homework. I would imagine with most if there is a frivolous claim, it would be caught.

Scott Drake: How do you see the industry evolving compared to others, as it is still comparatively in its infancy?

Joe Genovesi: Sure, I think it’s going to continue to grow. The U.S. tort system is huge, there are tons and tons of settlement dollars every year, the delays on collection have increased over time, so I expect the settlement funding industry to continue to grow as well as pre-settlement-I think the whole industry overall will continue to grow. You mentioned earlier hedge funds getting in the space; I see that as a fairly positive thing. Hedge funds generally are known to be very smart-savvy investors and they’re entering this space because it’s viewed as a good investment. Especially in the post-settlement funding space we play in, it doesn’t have near the risk profile that pre-settlement has.

Scott Drake: My guest has been Joe Genovesi. He is Senior Vice President of RD Legal Funding. Joe we appreciate your expertise and sharing your time with us today. Thank you so much.

Joe Genovesi: Thank you, thank you for having me.

Scott Drake: This is the Legal Broadcast Network.