29 Jun Funding to Build Your Legal Practice
Law firms are a business and running a successful business takes money. There are always immediate bills that need to be paid. However, longer-term investments are also essential to your practice. For attorneys who work on contingency fees, it can be difficult to implement plans for growth because cash flow is irregular. As a result, lawyers focus on the regular recurring expenses such as payroll, benefits and rent rather than on investing in their business. They are concerned about spending too much money on things that would help grow their practice because they may need the cash to stay current on bills the next time they are waiting for a check to come in. Funding companies can provide a solution to law firms. They offer needed funds for both short-term and long-term needs so law firms can not only run their practice, but build their business.
Many lawyers are leery of going to a funding company out of fear of owing money to someone or having other attorneys find out that they using a funding company. However, unlike bank loans, funders buy a portion of your legal fee from settled cases and there is no obligation to pay back the funds until you receive the settlement. This loosens up your cash flow to use for your business. In the short-term, this means money for expenses like:
- Litigation costs
- Other recurring expenses
Over the long-term though, you want to be able to bring in new business and that means setting aside money for other things, such as:
- Investing in marketing and advertising to attract more cases. Marketing is a long-term strategy that is most effective when you commit resources over the long haul.
- Hiring an associate or other staff to handle increased volume. If you bring in more clients, you may need more employees. Adding staff can also improve productivity and efficiency of work on existing cases and free up your time for more business development.
- Expanding or moving into new space. With more staff, comes the need for more office space.
- Making capital investments in your practice. Buying software; new computers, etc. can greatly improve the operation of your firm.
Having regular cash flow to operate your business means being able to better plan and budget your expenses. Most importantly, it can give you peace of mind that your practice will continue to thrive.
If you need funding to run and build your practice, learn more about how we can help.