Funding for Attorneys and Law Firms

For a law firm that practices contingent litigation managing cash flow is vitally important. Sadly managing ones cash flow is an afterthought for most trial lawyers. Cash flow is very sporadic as they only get paid when cases are successfully concluded. With many cases taking years to bring to conclusion projecting ones cash flow can be a daunting task.

Contingent firms typically advance all of the cost of litigation upfront in exchange for a percentage of the recovery. In a contingent case a firm may invest hundreds of attorney hours and tens of thousands of dollars into a case. If a firm loses a case it loses not only its time but the cash invested in hard costs as well. It gets worse, a firm is not allowed to deduct the money they have tied up is case costs. Not only do they have to fund the money up front but they have to fund it with after tax dollars. Then they repeat the cycle and plow the fees from successful cases into the next group of cases.

The missing ingredient in improving cash flow for most contingent law firms is something most businesses have been utilizing for decades. Leverage. Most lawyers have funded costs out of pocket since they started, only because that’s how its always been done.

A revolving line of credit can be one of the most important tools in a plaintiff lawyers fight for justice. By using borrowed money to fund litigation expenses a firm can eliminate the negative tax consequences of self funding. The firm actually realizes the income it is receiving in fees. Any interest a firm pays can be offset by having the money that was tied up in case costs available for firm expansion or outside investments. But the biggest advantage is no longer using after tax dollars to fund case development expenses.

We are in a time where trial law firms have more options than ever when it comes to financing their practice, from traditional banks and specialty finance companies to legal financial consultants. Contingent lawyers can and must pay attention to the bottom line if they wish to continue helping their clients.

For additional articles on plaintiff attorney financial services go to www.amicuscapitalservices.com

About Bill Tilley

Bill Tilley, President and Chief Executive Officer – Bill Tilley is the President and CEO of Amicus Capital Services LLC and is responsible for managing day to day operations, marketing, originations and client relations. In addition Mr. Tilley serves on the credit committee along with the three other members. For the past ten years Mr. Tilley has been devoted to creating and then fine-tuning the legal finance industry. Mr. Tilley joined Themis Capital in 1999, launching the legal finance industry in California. Within two years California became the largest market for legal loans. Mr. Tilley was instrumental in growing Themis from $12 million in loans upon his arrival to more than $135 million in less than 4 years. After successfully winding down the Themis portfolio in 2004, Mr. Tilley became the largest broker of legal financial services while consulting exclusively for Counsel Financial Services through 2006. He continued his devotion to creating a full service financial services company that caters exclusively to the legal community leading to the launch of Amicus Capital Services, LLC in early 2007. In 2008 Mr. Tilley expanded Amicus’ financial offerings to include structured settlement/ fee products as well as financial advisory services. Mr. Tilley has personally originated more than $100 million in attorney loans and has participated in the origination of more than $200 million. Mr. Tilley counts several of the most successful plaintiff attorneys in the country as personal friends and has developed a network that includes thousands of invaluable industry contacts. As an expert on legal finance Mr. Tilley has spoken numerous times at attorney conferences throughout the country. In addition Mr. Tilley was recognized on Public Justices wall of honor for his efforts in promoting the non-profit public interest association.
This entry was posted in Legal Finance and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s