28 Nov How to Deal with End of Year Delays in Getting Settlement Checks
Plaintiff attorneys who rely on settlement checks in order to pay their bills face a big problem at the end of the year. Property and Casualty insurance companies generally close their books on December 15th, which means that whatever is not settled by then gets paid in the following year. That leaves many law firms short of cash at a time when they often need it the most.
Cash flow is frequently a problem for plaintiff lawyers because of the long wait times before getting paid and large outlays that must be made for disbursements and other expenses. Although most firms try to plan for this irregular cash flow, sometimes too many payments are held up and for too long. That’s a particular issue at year end.
Both insurers and lawyers try to get as many settlements done as possible up to December 15th. The problem is that although the settlement may occur on that date or just prior to, the payment may not arrive until well after the New Year. Adjustors and supervisors go on holiday break as do their accounting departments, so the lawyer is left with a settled case and no money to make payroll and pay bonuses at year end.
The solution is to work with a legal funding company who can provide money to run your practice. With legal funding, companies buy a portion of your legal fee turning your settled cases into a valuable asset.
At RapidFunds®, we work with firms to provide quick funding, sometimes even the same day, to cover them through the year end and beginning of the new year as they wait for insurance checks. If you are require a fast turnaround, you should make sure you have your documentation in order to avoid problems.
If you are considering legal funding for your firm, contact us to discuss your situation.
To learn more about how the funding process works, check out our Frequently Asked Questions.