Law firms, like any other business, need cash to operate. Famously, our court system moves at a rather deliberate pace, and attorneys often find themselves waiting, sometimes for years, for a settlement to reach the finish line and turn into a payment. This is where post-settlement funding comes in. It allows law firms waiting on a settlement, especially from a drawn out class action or personal injury case, to receive cash. Have questions about post-settlement funding? Here are answers to some of the most frequently asked questions.
How does post-settlement funding help attorneys?
Wait times for settlement funding are real. Take, for instance, the $725 million class action settlement that Facebook’s parent company, Meta, agreed to in December 2022. It took until October 2023 for the settlement and legal fees to be approved by a judge, only for Meta to fail to put the money in escrow by the end of the month, leading to more squabbles about interest payments that may need to be added. This is not to mention further objections that may hold up payments for even longer.
Post-settlement funding could help law firms that find themselves in this situation. This type of cash advance funding allows plaintiffs attorneys immediate access to their legal fee from a settled case rather than having to wait for the courts to finalize the settlement distribution.
Is post-settlement funding a loan?
Post-settlement funding is not a loan. In fact, there are a few important differences which work to the benefit of the attorney clients.
- There’s no collateral.
- There’s no monthly payments.
Instead of putting a lien on something that the law firm already owns (maybe those gold bars), the funder is buying the firm’s future receivables. So only when you receive your legal fee will the funder receive their portion.
Do you contact the defendant or defense counsel to verify the transaction and let them know you are purchasing a portion of my fee?
No. Anonymity is paramount. Our communication is between you and us. We rely on information you provide and our own independent due diligence. The only time we contact defense counsel is if and only if, our client commits fraud, misrepresentation or otherwise fails to communicate. This is rare.
What do plaintiffs attorneys pay for post-settlement funding?
We will provide you with a written proposal that we will honor. You will know exactly what you have sold us, and the purchase price you pay, before you commit and throughout the length of the transaction. There are no hidden charges or upfront fees required.
When are the funds you purchased due back?
There is no compulsion to pay by a due date certain. Your obligation to transfer the amount of the legal fee you sold to us is upon your receipt of your legal fee from the underlying obligor. Once those funds clear in your escrow account, you immediately transfer the assigned portion of your legal fee to us.
Contact RapidFunds For Your Post-Settlement Funding
RapidFunds® Post-Settlement Funding service allows plaintiffs’ attorneys access to their legal fee from a settled case, which can help cover operational expenses without putting further pressure on their cash flow. There are no up-front fees and no monthly debt service payments to be made.
For more insights on legal trends and more, subscribe to RapidFunds on LinkedIn. RapidFunds has been providing settlement funding for almost 20 years. We’ve completed over 4,000 transactions and have helped thousands of firms with funding. Stop waiting for your legal fees and contact RapidFunds today.