Legal fees are the life-blood of contingency law practice. While it is essential for a contingency fee attorney to find a case to try, take that case to court, and successfully litigate on behalf of the plaintiff, all of this will be for naught if the attorney does not receive a fee at the end of the day. Securing a large fee speaks to the skill of the attorney, as the amount that an attorney receives after a case often correlates to the amount procured in settlement. In turn, the fee becomes a marker of an attorney’s reputation – a case that settled for a large amount also awards the attorney a certain amount of respect, in addition to a sizeable fee.
Unfortunately, there are certain cases, such as large class action cases and MDLs, where court procedures are often delays. These delays include, but are not limited to, settlement payouts, and these settlement payouts affect attorneys’ abilities to collect their fees. This is a risk that contingency fee attorneys knowingly take.
As attorneys are constantly in the process of litigating and reviewing cases, it is important to have easy access to frequently available funds. These funds enable attorneys to finance new cases, pay for experts, witnesses, discovery, and cover other expenses. Without funds, attorneys cannot finance cases, and without cases, attorneys cannot get paid. This burden can be amplified if an attorney is still awaiting payments on delayed fees. This catch-22 can become quite a drain on resources unless attorneys seek external funding.
In the best case scenario, attorneys can seek funding from traditional sources such as banks and credit unions. Often larger, more conveniently located, and willing to offer good interest rates, traditional institutions will provide financing until the delayed fees are paid off. However, these institutions are very difficult to qualify for; their stringent lending standards may exclude even past borrowers. Fortunately, there are alternative funding methods available to contingency fee attorneys. One such alternative is legal fee funding.
Legal funding companies can advance a portion of the attorney’s legal fee, giving them quicker access to funds. Legal funding companies purchase a portion of the money owed from the court, which expedites the funding process. The company will also communicate directly with the often-reluctant defendant and the defendant’s attorneys, and will work out a payment time frame that is quick and efficient. In some cases, attorney fees can appear frozen and locked, but with legal fee funding, lawyers can now access capital and employ it where they deem necessary to grow their businesses.
Payment delays in any business can be fatal. This is especially true for lawyers. Legal funding alleviates the situation so attorneys can get back to doing what they do best.
Written by Joseph Genovesi, President of RD Legal Funding, LLC