Attorneys Benefit from Lawsuit Funding

The lawsuit funding business exists to offer clients the ability to financially withstand the litigation process.  The purpose of this article is to explore the ways in which lawsuit funding benefits attorneys.

Helping Clients

Because personal injury cases involve very serious medical conditions, plaintiffs frequently are unable to work.  This obviously creates financial pressure on individuals since their expenses still must be paid.  Disability and/or workers compensation benefits are often not available for these victims.  In cases where those benefits are available, they are often woefully insufficient to cover all of plaintiff’s obligations.

I doubt any personal injury lawyer, in any jurisdiction, has not had a client ask him for money to help pay the bills while the case is pending



Yet most state ethical rules prohibit attorneys from loaning/advancing their clients money in anticipation of a favorable outcome.  Some states allow attorneys to do so, but the money must be advanced without interest.  Until the lawsuit funding, plaintiffs simply had to hold on or worse, had to accept a lower settlement offer just to temporarily ease the financial strain.

The purpose of lawsuit funding is to help plaintiffs meet their obligations while the case is being litigated.  Clients, and by extension their counsel, are relieved of immediate financial pressure.  The case can then be litigated properly, thoroughly, and to maximum value.


Cost Analysis

Although an argument can be made that the cost of lawsuit funding outweighs any available increase in settlement value.  And it is true that lawsuit loans carry higher interest rates than car loans or other traditional forms of financing.  But analyzing only interest rates is a narrow way of looking at what lawsuit funding actually achieves for clients and their attorneys.

Simply put, whatever the situation the client is in, he is in that situation.  So the question then becomes how to help lessen the burden or otherwise better the client’s situation?

When it comes to a cost/benefit analysis, what is the value of a plaintiff keeping a roof over his head?

What would be the fees/penalties if he was forced to default on his mortgage, rent or other obligation?

Further, since there are no restrictions on the use of cash coming from lawsuit funding, plaintiffs are free to use the money as they see fit – including using the advance to make more money.  Frequently, clients use money obtained from lawsuit funding for other business opportunities.

The point is – true cost cannot be measured in general terms?  Each client brings with him a unique set of circumstances and needs.  It cannot accurately be said obtaining cash against a lawsuit is more/less costly than any other means of finding funds.


Maximum Settlement Value and More Business

Attorneys also benefit from increased case value when clients are not forced to accept less than they deserve in settlement.  Since attorneys fees are a percentage of the ultimate award for damages, attorneys see an increase in fees.  More importantly, the client is more likely to be satisfied by the final result.  This enhances the attorney’s reputation, increases referrals from other attorneys and often assists in the settlement of future cases.

In the personal injury game, word of mouth is the most effective form of marketing.  Repeat business is derived from a successful outcomes.  Life long clients are the life blood of any business.  Law practices are no different.  Clients are likely to retain counsel who is attentive to their wants, needs, and necessities.  Likewise, clients are more likely to refer their friends and family not to the attorney who scoffs at the notion of paying 35% per year in interest, but to the lawyer who will go the extra mile to help.

The bottom line is the lawsuit funding industry helps clients who want and need help.  And by helping clients, the lawsuit funding business helps attorneys.

Thank you for your interest in lawsuit funding.