Attorney Funding FAQs
- What types of funding do you provide to attorneys?
We provide the following types of funding to attorneys.
- law firm loans (actually an advance against expected contingency fees) or attorney funding
- pre-settlement funding for clients
- settlement advance funding
- appellate funding
- structured settlement refinancing
- What are the basic requirements for attorney funding?
The basic requirements for attorney funding are listed below.
- the attorney must have legal malpractice insurance
- the attorney cannot be in bankruptcy
- the attorney must have good credit or have a partner willing to co-sign the loan agreement that has good credit
- the collateral for the loan must be fee income from a group of contingency fee cases (settled or unsettled)
- I need money to pay for expert witnesses. What options can you offer for funding expert witnesses?
The main option is for your firm to obtain a loan against your expected fee income from a group of contingency fee cases, and use all or part of these funds to pay expert witnesses.
- How does the law firm loan work?
A law firm loan (also sometimes referred to as “attorney funding”) is created using the expected fee income from a group of contingency fee cases as collateral for the loan. The value of the law firm loan is between 10% and 20% of the estimated contingency fee income. Please click here for more details on law firm loans.
- What can the law firm loan be used for?
The law firm loan has no restrictions on how it is used. It can be used for expert witnesses, paying deposition expenses, hiring additional staff, paying salaries including your own, and paying down other debts of the firm including tax liens.
- What types of pre-settlement funding do you provide?
We can provide pre-settlement funding for your clients. To learn more about how we can help your clients, please review the page on FAQ’s About Lawsuit Funding.
- What is “settlement advance funding”?
A law firm loan can be can be made using fee income that is anticipated in the near future from settled cases. The fee income from the settled cases can be combined with estimated fee income from pending cases to establish the overall loan amount.
- What is appellate funding?
Appellate funding is funding provided after a judgment has been won, but is being appealed. It can be used to cover the same types of expenses as pre-settlement funding. The advance percentages may be higher than for pre-settlement funding because more is known about the case.
- What is “structured settlement refinancing”?
If you settled a case as a “structured settlement” and your fees were also to be paid out over time according to the “structure”, then you have the option of selling all or part of those future “structured payments” to receive a cash payment today. The same can be done for the client for whom the “structure” was created.
- What are the fees for pre-settlement and appellate funding?
The fees for pre-settlement and appellate funding vary depending on the risk associated with the cases involved. They include both one time fees and fees that are charged for each month the advanced funds are in use.
- Is there “recourse” on the funding for attorneys?
This depends on the type of funding. Pre-settlement and appellate funding do not have “recourse”. If the case is lost, nothing is owed. The law firm loan may or may not have recourse depending on the situation and the underwriter providing the funding.. Accounts receivable funding will usually have “recourse” unless the client goes bankrupt. In other cases where the client does not pay the invoice, the law firm must either repay the advanced amount plus fees owed, or replace it with another receivable of equivalent or greater value.
- Can you fund my clients?
Yes! We provide the following types of funding for your clients.
- pre-settlement funding
- appellate funding
- structured settlement refinancing
- advances from estates in probate
- How will an advance to my client affect my fees?
There are a number of possibilities here. The table below shows the most likely possibilities.
|Outcome after advance is made||Effect on attorney’s fee|
|Case settles for more than expected because advance allowed you more time to obtain a more favorable outcome for your client||A larger settlement should result in a larger fee to you.|
|Case settles for about what was originally expected in spite of getting the advance||Your fee should be what you originally anticipated for the case.|
|Case settles for less than expected recovery||In this situation all parties are probably getting less than they would have otherwise.|
|Case is lost with no recovery||No effect because there is no fee in this outcome.|
- Is pre-settlement lawsuit funding a “good deal” for me and my clients?
This depends on the situation. Pre-settlement lawsuit funding is definitely a “good deal” when it enables you to reach a settlement or judgment that more than pays for the cost of the financing. When you are able to reach a higher settlement value both you and your client win. You earn a higher fee and your client may also walk away with a larger final amount. It may still be a “good deal” even it does not quite “pay” for itself if can help to bring medical or economic relief to your client while going through the lawsuit process, and also lessen the calls you get from your clients asking for loans or requesting quick resolution of their cases.. Pre-settlement lawsuit funding is a tool to be used by you and your clients when it appears appropriate for any number of reasons for the situation.
If you have additional questions, or if you would like to learn if funding can be obtained by your firm, please click here to contact us .