Unforeseen Risks Facing Trial Lawyers Today

Risks to plaintiffs lawyersThe risks to trial lawyers of being sued for malpractice are surprising and patently disturbing. The best way to protect yourself is through education and action. I highly recommend you take the time to review the statistics of the risks facing plaintiffs attorneys on an ongoing basis. Amicus has made this information available on our sister site Settlement Planning Blog.

After reviewing this abbreviated report please contact us for an in-depth review at 877-926-4287.

Click her for the report on The Most Serious Risks….You Don’t See Coming.

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They Knew and Failed To…….

The nation’s largest trial lawyer association, AAJ (American Association of Justice) has recently released a a report highlighting situations where they believe companies knowingly risked consumers’ health and or lives.

True Stories of corporations that knew their products were dangerous, sometimes deadly…..Read Complete Report Here.

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Using a Specialty Legal Finance Lender

Legal Finance providers typically provide funding for the cost of developing cases and operating your firm.

Legal Finance providers typically provide four to five times more capital than a traditional lending institution.  They can do this because they typically only work with plaintiff lawyers and understand the unique value of your portfolio of contingent cases.

With a more custom tailored lending program, your firm is able to utilize this cost effective capital to increase your firm’s ability to maximize the value of each of your cases.

With most legal finance providers, No principal payments are required on the money until final disposition of the case, either through settlement or adjudication. Understanding the cash flow constraints of contingent fee work.

I am sure you understand that the one thing that is most valuable is your time, find a lender with a program that is simple and will be tailored to your individual practice.

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Financial Benefits of Borrowing for a Contingent Law Firm

Many firms believe that it is inefficient to borrow funds for case development costs when they can afford to make such advances out of pocket.  However, such is not the case.  By utilizing leverage through a revolving line of credit, law firms are able to recover up to 100% of the funds that are perpetually invested in case development costs.  Even if these funds were invested conservatively in a retirement fund, the principals of the firm would recognize dramatic financial benefits.  Amicus guides trial lawyers with the strength of unparalleled financial expertise in the legal arena.

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Trial Lawyers Lack Leverage

Trial Attorneys are caught in an endless cycle of interest free loans to their clients. Worse yet they are using after tax dollars to fund these interest free loans.

If you use your past case profits – your own money – to fund your next case, you’re using after-tax dollars. The IRS sees that money as income, successful growing firms can find themselves trapped in an endless cycle of continually tying up your income in the next case, it’s really operating funds that are not tax-deductible. It is time for contingent fee lawyers to get off this treadmill and reduce their tax burden. This can easily be achieved by utilizing leverage as is common in most other industries . Loan costs are generally tax-deductible as a business expense, so you’re using before-tax dollars to fund your case. In addition, funding ones practice with borrowed moneys eliminates the phantom tax as well as allowing you to utilize the  additional capital for  firm expansion or to funding partner’s retirement accounts.

That translates to more profit for you to run and expand your business, invest elsewhere, or just to enjoy.

Once a firm has begun to free up its cash flow by using borrowed money another tremendous tax savings opportunity is created. A lawyer can now take the excess cash flow and shelter it by structuring a portion of their attorney fees. The tax benefits of a structured attorney fee arrangement can be tremendous. Structured attorney fees offer the advantage of spreading out your tax burden over the life of your payments. Because the money is taxed as it arrives, rather than in one lump sum, spreading it out offers you the chance to move to a lower tax bracket, taxing the income at a lower rate than it would otherwise have been. Structuring your attorney fees can save you taxes today, smooth out your cash flow as well as provide for your retirement.

Finding the maximum tax advantage in your unique situation is research-intensive, and most trial attorneys are busy.

Let the Amicus Capital Services do that work for you, so you can concentrate on the work you really care about: winning trials.

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Three Cases that Every Personal Injury Attorney Should Know

Nobody understands risk and liability better than a Personal Injury Attorney. Unfortunately, the nature of the profession makes its practitioners the ideal target. As a result, the settlement planning process can be a mine field of liability.

To illustrate this reality, we’ve collected three of the most noteworthy national precedents that outline the extent of attorney vulnerability and the importance of expert settlement planning.

Lyons v. Medical Malpractice Insurance Association, 730 NYS 2nd 345, (A.D. 2 Dept.2001)

The Judge indicated that MMI (defendant) contended that the plaintiffs could have and should have independently determined the value for themselves! This problem most likely would never have occurred had plaintiff’s counsel retained their own expert with a duty and loyalty to the plaintiff. That is why ACS surveys the entire market and finds the best programs available with the highest quality companies.

Macomber v. Travelers Property and Casualty Corp., 261 Conn 620 (2002)

The plaintiffs agreed to settle their case for cash and periodic payments (a structured settlement annuity). Plaintiffs alleged that Travelers Casualty misrepresented the fundamental nature and terms of the settlements because they did not disclose the true cost or value of the annuity that was to fund the structured settlement. Plaintiffs alleged that Travelers engaged in practices that enabled them to pay less for the annuities than what they represented to the plaintiffs. The Connecticut Supreme Court labeled these practices “rebating and short-changing schemes.”

Josephine Grillo, as guardian and next friend for Christina Grillo, a minor v. Tom L. Pettielle, T.E. Swate and Hardy, Milutin & Johns, in the 96th District Court of Tarrant County; Texas, Cause NO> 96-145090-92

A plaintiff in a personal injury lawsuit settled a decade ago sued her own attorneys and guardian ad litem for legal malpractice because she was not presented with the option of a structured settlement. A simple tool for plaintiff’s counsel is to provide an Acknowledgement Letter that a structure offer was presented and signed by plaintiff that the offer is Accepted or Rejected.

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Industry Prospects In Recessionary Times

While the economy is in the midst of a recession Trial Lawyers are entering a sort of golden age. Statistically contingent fee lawyers have flourished during down times in our economy. During boom times juries are less sympathetic to the injured or wronged as they are feeling good and have sort of a get over it attitude and are less likely to award large awards. During down times jurors tend to empathize with the plaintiff as they feel less secure and at risk themselves. Amicus recently conducted an online poll of Plaintiff Lawyers and found that approximately 60% of lawyers who handle cases feel that they will do better economically in the coming years while just 20% anticipate doing worse.

Over the past 10 plus year’s insurance companies and defense firms had the luxury of delaying cases and dragging cases out even when they know they will ultimately lose the case just to weaken the trial bar. Insurance companies and big business no longer have the luxury of paying excessive defense bills just to drag out cases as far as possible. We are seeing firms more willing to settle in clear liability cases to stop the legal expenses. The other factor helping trial firms is the fact that the average defense firm is being severely hurt during this recession. Industry is no longer willing to pay large defense firms inflated billings and allow them to keep cases going just to keep billing. We are seeing a tremendous amount of layoffs among defense firms and billings are down drastically. In the past one of the defendant’s biggest advantages has been there deeper pockets and relatively unlimited resources. The tables have been turned and now the advantage lies with the trial bar.

Another tail wind for trial lawyers today is the fact that with the new administration tort reform has been taken off the table and in fact is expected to go back in the other direction and plaintiffs are expected to have their rights expanded. In addition to this recently the Supreme Court of the United States ruled in favor of consumers and against federal pre-emption in drug product liability cases. In addition there is talk of Congress unwinding Federal Pre-Emption in Medical Device cases.

The one negative we are seeing in this environment is that while companies are more apt to settle cases to stop the billing and move on we are seeing companies take as long as they are legally permitted to hold off on paying the agreed to settlement amount. If they have 60 days to pay, they will mail the check on the 60th day.

Today the majority of fixed costs of operating of running a law firm are dropping. (ie: rent, labor, experts, etc.) due to the recession while more and better quality cases are available to chose from.
Trial lawyers may see deeper peaks and valleys with their cash flow but overall will see more cases and of better quality generating higher verdicts and settlements. Fiscally savvy firms with strong financial discipline will be rewarded with higher overall margins and increasing net income over the coming years.

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