Tag Archive for post settlement funding

How Legal Funding Can Save Plaintiffs Attorneys Time and Make Them Money

lady justice
A contingency fee attorney does not lead an easy life. This is a fact.

Unlike their billable hour counterparts, contingency fee attorneys don’t start off with plenty of cash, and there’s no guarantee they’ll end up with it either. That’s the whole basis of the term “contingency” – this noble, self-sacrificing purveyor of justice forgoes any form of payment unless the case in question ends favorably for the client.

Of course, a favorable trial outcome does not ensure payment. As with all institutions, the court system is rife with built-in bureaucratic processes, many of which result in procedural delays and stoppages. These stoppages can have profound effects on settlement and verdict payouts, causing delays of a few months to a few years.

Let’s not forget the enumerable hours of discovery and preparation that occur before verdict or settlement can even be considered; the witnesses and experts that all must be consulted; travel and lodging and all other assorted tasks associated with setting up a successful case. All of these things must be budgeted and paid for by none other than the attorney or her small firm.

And let’s keep in mind that an attorney without proper funds has to waste time trying to acquire a stable cash flow, when that time could be spent preparing for the next big case.

You might say it’s a lifestyle of “all work, no pay.”

You might, but the truth is, plenty of contingency fee attorneys are doing just fine. They have lucrative practices in which they represent – and win for – countless clients each year, and they do so without taking a break and without breaking the bank.

What keeps these successful attorneys afloat?

The Secret of The Super-Attorney

All successful attorneys recognize one simple fact: in order to make money, you need to have money. This one sounds like a no-brainer, right?

Consider the example we looked at earlier:

  • Contingency fee attorneys need to invest in discovery tools, travel expenses, and day-to-day finances in order to try a single case.
  • Those expenses can add up to the thousands or ten thousands.
  • This case may not see a full return on investment.

Now imagine how many cases a contingency fee firm might try within a month, or a year, or a decade. The dollars add up.

So we know that running a successful legal practice requires money. But where does this money come from? Well, that depends on where you look.

The easiest solution is relatively rare for your average attorney: this would be a large, personal cash reserve. If a single case doesn’t pan out, not all hope is lost, because the bank is still relatively full, and hopefully the next case will bring in the bucks. Sounds good!

Of course, not all attorneys necessarily hit it big on Wall Street or in Vegas (or otherwise experience some remarkable bank-filling event) prior to opening a law practice.

What about the super-attorneys with average bank accounts? How do they maintain a steady cash flow?

One option here would be pursuing some sort of traditional funding, such as a loan or a line of credit. Both of these options, the former of which is granted in a single lump sum and the latter of which can be paid out in installments over a prescribed amount of time, are available through banks and lending institutions. Interest can vary depending on the loan amount and the agreed upon repayment schedule, as to be expected in any lending agreement. There’s nothing not to like about this arrangement.

Except for the fact that it is incredibly difficult for an attorney to be approved for a traditional loan or a line of credit.

Credit lines and personal loans typically require some form of collateral in order to be considered secure, which can pose a problem for many attorneys. Collateral, as accepted by most banks and lending institutions, is a physical piece of property – a car, a house, a 4,000-year-old diamond from Peru.

Contingency fee attorneys, many of whom are already strapped for cash, often do not own forms of collateral that would be accepted by a bank. For example, while an office could be used as collateral, many contingency fee attorneys share or rent office space, which would disqualify that office as collateral.

Without collateral, it’s nearly impossible to secure a loan.

Fortunately, there’s more to life than loans.

A Case Full Of Cash

Attorneys may not have the physical collateral needed for loans or lines of credit, but they do have a unique form of collateral that can grant them access to a super-unique, super-effective form of financing – legal funding – that was specifically designed for attorneys.

Unlike most other business owners, attorneys have the ability to use their legal receivables, all of which have potential future value, as non-physical collateral. This means that a single specific case, an entire caseload, or the value of an entire law firm can be considered collateral.

For example: a bicycle accident case might have an expected payout of $1.3 million in damages; a medical malpractice class action might have an expected payout of $400 million; a slip and fall might have an expected payout of $580,000. The expected value of each case, or an entire grouping of cases, is viewed as collateral.

Because an attorney’s collateral, in the form of legal receivables, can exist in a variety of forms, legal funding has also been developed to exist in a variety of forms.

For example, a lawsuit can have five or more identities.

  • Early, research-and-discovery form;
  • During prosecution;
  • After a settlement agreement has been reached;
  • During an appeals process;
  • After a judgment has been reached.

Each of these different iterations of a case can be financed with a different type of legal funding, none of which require physical collateral.

The fact that legal funding firms accept legal receivables as collateral sets them apart from traditional lenders. That’s a pretty big deal for attorneys, who often struggle to meet the harsh standards of banks and lending institutions.

Many Legal Funding Transactions are Advances, Not Loans

To put it in the most basic terms, legal funding is simply the factoring of legal receivables. Legal finance firms take the collateral into account – the legal receivables – and purchase an amount of the projected case outcome, which for the attorney typically means the projected case fee. The legal funding firm can then advance this purchased amount to the attorney in question.

Repayment rates vary based on whether the funding is pre-settlement, post-settlement, appeals, or judgment / verdict.

To clarify the concept, legal funding firms make an investment in legal cases. They do this by purchasing a portion of projected earnings of the firm or case, and advance this portion – now owned by the legal funding firm – back to the attorney or law firm. Successful cases result in a monetary gain for both the attorney and the legal funding firm. Often, legal funding firms do not demand repayment in the event of an unsuccessful case.

So let’s say you’ve just settled a case for $6 million but don’t expect to see your fees for another year due to processing delays. You figure you might as well try out this legal funding thing and see what happens.

  • Using a type of post-settlement funding called fee acceleration, you receive a portion of your fee up-front.
  • You have the capital to invest in a new case that just came across your desk (without the advance, you’d have had to pass it up).
  • You have no worries about everyday life. Your advance allows you to continue paying your bills, your mortgage, and your office fees.
  • As expected, your fee is paid about a year later. Because you only sold a portion of your fee to the legal funding firm, the rest of the fee is all yours, except for the amount you use to pay off the discount rate of the advance.

As a refresher, traditional lenders dish out a lump sum or series of payments over a period of time and then ask for repayment with interest at a later date. These lenders require physical collateral, which makes a successful loan application difficult for many contingency fee attorneys.

That’s Why Funding Is Fundamental!

Now you know the real secret to the super-attorney’s success. A constant cash flow means that there’s plenty of time to get everything done, and legal funding is a great way to ensure a constant cash flow.

Have a super legal funding success story to share? We love to hear those! Leave a note in the comments!

Photo Credit: Figures of Justice by Scott Robinson


Shayna Keyles has been keeping the world informed on the latest in law and litigation finance with RD Legal Funding, LLC since 2012. She offers writing and content marketing tips at her website, http://www.contentliaison.com, and tweets at http://twitter.com/skliaison.

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.

Joseph Genovesi Interviewed on LawTalkRadio

Joseph Genovesi, Senior Vice President of Business Development and Origination at RD Legal Funding, was recently interviewed by Nick Augustine on LawTalkRadio. Topics that were covered include:

Below is a recording of the interview. Please leave a comment and let us know what you think!

Listen to internet radio with LawTalkRadio on BlogTalkRadio

RD Legal Offers Funding to Plaintiff’s Attorneys with Hurricane Rita and Hurricane Katrina Settlements

According to news reports, a notification program was announced to inform plaintiffs of how the new claims process will work, including how payments will be calculated. The settlement was revised from its 2008 version. Plaintiffs alleged levees and other flood prevention structures did not work and were not properly maintained.

Hurricane Rita and Hurricane Katrina caused a tremendous amount of damage to the Gulf coast, especially in states like Louisiana and Texas. The cost of both storms was estimated to be over $100 billion with Katrina causing the most damage. For plaintiff’s attorneys involved in this litigation, it can take a long time to receive your hard-earned fees, even after a settlement has been reached. RD Legal Funding, LLC (“RD Legal”) is ready to help bridge the gap between time of settlement and case payout to help plaintiff’s attorneys better manage their cash flow. RD Legal is one of the nation’s leading providers of lawsuit funding to attorneys.

Hurricane Rita Coverage:


Hurricane Katrina Coverage:

During the aftermath of Hurricane Katrina, it became clear that the measures implemented to prevent flooding failed. The combination of a huge storm, defunded projects, and poorly maintained infrastructure devastated the Gulf Coast region. Hurricane Rita followed a month later adding even more devastation.

The damage from both storms was immense and caused many people to evacuate their homes. A class action lawsuit was filed against several districts in Louisiana and their insurance company. The suit was partially settled for about $20 million. According to the website established for plaintiffs seeking a claim, there are three settlement funds established with over $20 million as of November 2012. Approval of the settlement will be determined in September of 2013 by the United States District Court for the Eastern District of Louisiana.

RD Legal can provide plaintiff’s attorneys with Hurricane Rita and Hurricane Katrina settlements with interim post-settlement funding, which provides immediate capital on settlements. Legal 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 Fee Acceleration, please call Joseph Genovesi at 1-800-565-5177, ext. 140.

Disbursement of Avandia Attorney Fees Approved by Judge

avandia settlement fundingU.S. District Court Judge Cynthia M. Rufe of the Eastern District of Pennsylvania approved the Avandia MDL attorney fees, which amount to approximately $144 million. Fifty-eight law firms are potentially going to divide the proceeds, with about six set to receive over $10 million.

According to news reports, a 7 percent assessment was added to all Avandia MDL claims, and many of the attorneys reported costs that range between $750,000 and $1 million. Some of the law firms set to receive the largest fees include Andrus, Hood, & Wagstaff of Denver, Wagstaff & Cartmell of Kansas City, and Aylstock, Witkin, Kreis, & Overholtz of Pensacola.

If you are a plaintiff’s attorney waiting on slow-paying Avandia legal fees, RD Legal Funding can accelerate payment via our Fee Acceleration post-settlement funding program. We purchase your unpaid legal fees at a discount, providing you with capital almost immediately. To learn more, call Joseph Genovesi at 1-800-565-5177.

Legal Funding for Attorneys with Fifth Third Bancorp Settlements

securities_fraudFifth Third Bancorp has agreed to pay $16 million to investors who filed a class action lawsuit against them. The four-year-old lawsuit alleged the bank was engaged in securities fraud. According to news reports, the $16 million settlement will encompass all claims from the class members. The bank denies all liability and settled to avoid future lawsuits. For plaintiff’s attorneys with slow-paying Fifth Third Bancorp settlements, RD Legal Funding can provide immediate post-settlement financing.

Fifth Third Bancorp is arguably the largest bank in Cincinnati. They are also very active in the Midwest and Southern regions of the country. In addition to banking, they are involved in the communities where they do business and fund various sports arenas in those areas.

The $16 million settlement is the latest for the bank. In 2011, they were sued over improperly assessing overdraft fees by posting card transactions in non-chronological order. The bank paid $9.5 million to settle all claims involved with this class action and admitted to no wrongdoing.

RD Legal Funding can provide post-settlement financing to plaintiff’s attorneys with Fifth Third Bancorp settlements, which provides immediate capital on slow-paying legal fees. There are several benefits of legal funding. There are no monthly interest or principal payments and no upfront points or fees. The funding process is quick and transparent. RD Legal Funding can wire funds within a few days of receiving necessary documentation.

For more information on accelerating your legal fees, contact RD Legal Funding toll-free at 1-800-565-5177 for a free consultation with one of our lawsuit settlement funding specialists.


Written by Lulaine Compere.

With Resolution of Fee-Sharing Dispute, Settlement Funding is Now Available to Avandia Plaintiffs’ Attorneys

Avandia legal fundingCresskill, NJ: Attorneys representing plaintiffs suing GlaxoSmithKline (GSK) over the drug Avandia’s side effects have resolved their dispute about sharing fees of $142 million. Over 50,000 lawsuits were filed in US state and federal courts citing GlaxoSmithKline’s failure to inform type-2-diabetes patients about Avandia’s potentially life-threatening side effects: heart attack and failure, stroke, bone fractures, vision loss, and death. The litigation has taken over ten years, with the lead attorneys alone logging more than 60,000 hours. Yet none of the plaintiffs’ attorneys have received any compensation for their time or out-of-pocket expenses. RD Legal Funding is now making immediate post-settlement financing available to ease the Avandia plaintiff’s attorneys’ financial burdens.

The FDA approved the use of rosiglitazone—marketed as Avandia—for the treatment of type-2-diabetes in 1999. Tens of millions of prescriptions were written for the drug which may have caused between 60,000 and 200,000 heart attacks and deaths due to cardiovascular problems in the US alone.

  • 2001: GSK receives an FDA reprimand letter regarding false and misleading comments made by sales representatives about Avandia to an undercover investigator.
  • 2005: GSK’s draft analysis of Avandia clinical data indicates heart risks. The company modifies Avandia labels, but the warnings are not prominently displayed and do not adequately convey potential health hazards.
  • 2007:  The New England Journal of Medicine reports that Avandia users face a 43 percent higher risk of heart attack or other cardiovascular events and over 60% increase in the risk of cardiovascular death. Avandia profits in 2007 are $3.2 billion.
  • 2007: Congressional hearings review when information about Avandia heart attack risks was available and why it was not disclosed to the public earlier. The FDA mandates a black box warning about Avandia heart attack risks.
  • 2008: An FDA report implicates Avandia in an estimated 83,000 heart attacks.
  • September 2010: Avandia is banned in several European countries but remains on the US market.
  • 2010: GSK pays a $2.36 billion charge to settle 10,000 of 13,000 Avandia US civil lawsuits, investigations over its antidepressant Paxil, and manufacturing problems in its Puerto Rico plant.
  • November 2011: GSK agrees to pay the US government $3 billion to resolve civil and criminal investigations alleging that the company had paid doctors and manipulated medical research to promote Avandia. A mediator is appointed to resolve the bulk of the pending MDL cases.
  • January 2012: A committee of eight Avandia plaintiffs’ attorneys is charged with drafting the fee allocation plan for 58 lawyers and firms, with the total amount to be distributed set at 6.25 percent of the total settlement.
  • July 2012: GSK pleads guilty to withholding safety data on Avandia.
  • November 2012: GSK agrees to pay $90 million to settle the claims of 37 states and the District of Columbia.
  • November 2012: The committee submits its fee-sharing agreement which is disputed by nine attorneys. Bruce P. Merenstein is appointed as special master.
  • January 22, 2013: A modified plan, agreed to by the nine objectors, is filed in PA federal court.

Avandia plaintiffs’ attorneys are urged to contact RD Legal Funding, whose unique fee acceleration program will provide them with settlement financing within several days, with no monthly interest or principal payments, as well as no upfront points or fees. No payment of any kind is required until the attorney’s settlement fee is received. RD Legal Funding is one of the nation’s leading providers of post-settlement financing. For more information call 800-565-5177 or visit http://www.legalfunding.com.

SOURCES:

http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/avandiadrug/index.html

http://www.drugwatch.com/avandia/lawsuit.php

http://www.bloomberg.com/news/2013-01-18/glaxo-accord-said-to-spur-lawyer-fight-over-fees.html

10 Biggest Verdicts of 2012 (Infographic)

The verdicts with the biggest payouts in 2012 comprised some of the largest patent cases in United States history, cases of medical malpractice, and some very big companies acting badly. The top 3 verdicts involved patent infringement with verdict amounts of $1.7 billion, $1.05 billion, and $1 billion. Two of the top ten verdicts involved nursing home abuse and neglect.

Reaching a settlement or verdict does not always equate to getting paid your legal fee or award. For plaintiff’s attorneys working on a contingent fee basis, there is often a delay in payment of legal fees associated with settled cases. This can create serious cash flow problems. Fortunately, there are specialty legal finance companies that offer post-settlement funding, also known as fee acceleration.

RD Legal Funding is one such company that has been a leading provider of post-settlement advances for well over a decade. They purchase unpaid legal fees from settled cases. Unlike personal loans and bank financing, there are no monthly interest or principal payments, nor are there any upfront fees or points. There are no restrictions on how the money can be spent, and RD Legal has robust financial resources to finance fees between $20,000 and $20+ million.

If you are an attorney facing cash flow issues due to slow-paying legal fees or a plaintiff waiting for your award, give RD Legal a call at 1-800-565-5177, or visit legalfunding.com and fill out the brief online application. RD Legal only funds settled cases and does not take any pre-settlement risk. Attorney post-settlement funding is their specialty.

Top 10 Biggest Verdicts of 2012

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Post-Settlement Funding: A More Transparent Version of Legal Finance

post-settlement fundingLegal funding is a new field that is growing every year. It is already a force in places like the United Kingdom, New Zealand, and Australia and is becoming increasingly popular in the United States. The industry generates a lot of money and there is a significant presence of hedge funds. Critics of litigation funding say because of these very reasons, the industry’s model is predatory.

Critics like the various chambers of commerce and the Institute for Legal Reform say the profits legal funding companies generate leave the plaintiffs with little money. They paint the companies as opportunistic investors looking to make a massive profit on their small investment or a Johnny-come-lately who saw an opportunity and decided to take it. They also claim that legal funding companies can potentially interfere with the judicial process.

The main criticism of legal funding companies boils down to this: unscrupulous companies are willing to finance litigation for profit no matter what it takes. Of course there are shady players in any industry, especially in the ranks of the various chambers of commerce. Many of their members are in court or in the news for releasing harmful products or doing harmful actions to people.  Legal funding has its fair share of unethical bad actors, but for the most part, the terms and conditions of doing business with a legal funding company are upfront.

Critics rarely call for the complete abolishment of an industry. With legal funding however, critics believe that the entire industry must be done away with because its effect is so harmful to regular people as well as companies. Of course these are exaggerations of what the industry is really about. Many attorneys, plaintiffs, and companies who use legal funding are doing so because they are experiencing cash flow problems and need money to continue doing business. Or corporations involved in litigation may have too much invested in a lawsuit and use the money as a hedge against future disasters.

Post-settlement funding (Fee Acceleration) is a little different than what is considered to be “traditional legal funding.” Legal funding usually involves a company advancing funds before the outcome of the case is determined. This is known as pre-settlement financing, as an advance is being made prior to a settlement or judgment. Because the outcome is unknown, this can be a risky investment for a legal finance company. Therefore, the rates on pre-settlement advances are usually quite high.

In a post-settlement situation, the attorneys and plaintiffs know exactly what they will receive, or there is a binding high-low agreement in place. In either case, there is less speculation with post-settlement funding. Therefore, a post-settlement advance can be obtained at a much more reasonable rate. The critics of legal funding forget that there are many variations. That being said, post-settlement funding may be the most transparent kind of legal financing.


Written by Lulaine Compere.

RD Legal Offers Funding to Plaintiffs with RockTenn Services Settlements

post-settlement plaintiff fundingRockTenn, a Georgia based manufacturing company, has agreed to pay $500,000 to 14 of its employees as part the settlement they reached with the United States Equal Employment Opportunity Commission. The settlement was approved by a federal judge in December 2012. The allegations from the employees, all of whom were African American, say the company subjected them to racial discrimination.

The plaintiffs in the lawsuit alleged the use of swastikas, nooses, Confederate flags, racist graffiti of the Ku Klux Klan, “white power,” and other racist terms directed at them. Apparently, the allegations were brought to the attention of RockTenn officials with no action taken. The complaints were then brought to the attention of the EEOC, which moved forward in pursuing the case saying racial discrimination violates Title VII of the Civil Rights Act of 1964. In addition to paying $500,000, RockTenn is supposed to conduct annual anti-harassment and anti-discrimination training for its employees and institute an anti-graffiti policy.

RD Legal Funding can provide plaintiffs and plaintiff’s attorneys with RockTenn settlements post-settlement funding, which provides immediate capital on slow-paying settlements. Lawsuit settlement financing 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. RD Legal Funding can wire funds within several days of receiving all necessary paperwork.

Plaintiffs seeking a post-settlement advance should click here. Plaintiff’s attorneys seeking lawsuit funding should fill out our online Fee Acceleration application.


Written by Lulaine Compere.