12 Oct The Importance of Case Expense Financing for Plaintiffs’ Attorneys
Litigation can be very expensive for plaintiffs’ attorneys. Once the decision is made to proceed with a lawsuit, the attorney can be looking at thousands of dollars in expenses just to start the litigation. Travel costs, depositions, filing documents, Pacer fees, Lexis Nexis fees, are among some of the costs plaintiffs’ attorneys take once the lawsuit starts. Usually they would just tap their line of credit to cover the current expenses and future expenses on their cases. That line of credit would be provided by a traditional lender (bank or credit union) to help them cover case costs and be a source of working capital to help them operate their firm.
However, banks can be fickle and have been known to pull lines of credit from their clients without much notice. Plaintiffs’ firms are very active and are usually litigating multiple cases at the same time. That means hundreds of thousands of dollars are invested in those cases and should their source of capital pull their funding it can leave them in a bad spot. Funding is everything for plaintiffs’ firms and any action that affects it will have a very negative effect on them. It reduces how they can service their present clients and future clients. Not to mention it also affects their reputation among their competition who may be looking for a competitive advantage against them. The world of plaintiffs’ attorneys can be brutal. Since fees are contingent on them winning their cases, they have a strong incentive to win their cases. Changes in funding is something plaintiffs’ law firms should be cognizant of and possibly be prepared for.
During the financial crisis, the nightmare scenario of banks calling in lines of credit from their attorney clients without notice happened. Law firms across the country many up until that point were good clients had their funding pulled. Mortgage backed securities threatened the entire world and banks wanted their capital at that point. Measures were taken across the world to avert disaster, but the damage was done. Plaintiffs’ attorneys now had to deal with a new financial reality and many approached the companies in the legal funding space to help them with financing issues they were dealing with or may encounter in the future. Some of these companies focused on client funding (plaintiffs) many were and are still focused on pre-settlement funding for both plaintiffs and plaintiffs’ attorneys. Others did a mix of different kinds of legal funding: litigation funding, case cost funding, post-settlement funding, verdict funding, structured settlement funding, appeal funding, and probate funding. So now plaintiffs’ attorneys have a new industry dedicated to helping them financially at nearly every level of litigation.
Case Cost Funding is probably one of the most important kinds of legal funding available to plaintiffs’ firms. It is directly attributable to the expenses plaintiffs’ attorneys generate while litigating a specific case. Personal injury cases are not the same as employment law cases. Sexual harassment and product liability cases are not litigated the same. Plaintiffs’ attorneys have strategies and of course as the case evolves those strategies can change. It’s important for plaintiffs’ lawyers to have every option available to them so they aren’t stuck. Case Cost Funding is not a line of credit tied to the firm’s balance sheets. If an expert witness is needed that would help the case, the attorney can use that type of funding to help pay that expert and win the case. If another round of depositions is needed to help make the case stronger, case cost funding helps plaintiffs’ attorneys do that. Plaintiffs’ attorneys nationwide deal with similar issues and but case cost funding provides a solution to help one of the main issues become less of an issue.
RapidFunds provides case cost funding to plaintiffs’ attorneys for their current and future case expenses. The company also provides post-settlement funding to plaintiffs’ attorneys based on their settled case fees. Visit our website to learn about both and how the funding process works.