Business Benefits of Specialized Trial Practice Financing from Advanced Legal Capital
Problem: Banks are no longer a viable option for funding trial lawyer firms.
This fact comes as no surprise to trial attorneys and law firms who have recently sought bank financing for their practices. Banks and traditional commercial lenders have always had difficulty understanding the business model of contingency practices and the value of their outcome-dependent, contingency fee-based collateral.
This situation was then worsened in the tight business credit environment that prevailed following the 2008 banking crisis due to new lending restrictions. The more recent economic impacts of the COVID-19 pandemic and its ongoing impact on the financial sector have only exacerbated the difficulty many trial attorneys and law firms currently face in their efforts to secure adequate, cash flow compatible funding for their firms.
In those instances in which trial lawyers and their firms are able to persuade their banks to lend, the banks require partner personal assets, equity and non-firm assets as collateral, and use the value of those assets to determine the loan amount. This usually results in bank loans or lines of credit that are inadequate to provide the level of capital needed to successfully run a successful plaintiffs contingency fee practice.
To make matters worse, while the banks refuse to accept the projected fees of the firm's cases as the basis for the loan, that does not stop them from imposing blanket UCC liens on the firm that includes the firm's fees. This "locks in" the firm from seeking any additional financing that would be more adequate and compatible with the capital needs and cash flow realities of today's contingency fee practice.
Contingency fee -based law firms and sole practitioner law practices are considered small businesses, and even before the COVID -19 pandemic, the failure of banks to lend to small businesses like law firms in recent years has been confirmed by FDIC figures:
This situation was then worsened in the tight business credit environment that prevailed following the 2008 banking crisis due to new lending restrictions. The more recent economic impacts of the COVID-19 pandemic and its ongoing impact on the financial sector have only exacerbated the difficulty many trial attorneys and law firms currently face in their efforts to secure adequate, cash flow compatible funding for their firms.
In those instances in which trial lawyers and their firms are able to persuade their banks to lend, the banks require partner personal assets, equity and non-firm assets as collateral, and use the value of those assets to determine the loan amount. This usually results in bank loans or lines of credit that are inadequate to provide the level of capital needed to successfully run a successful plaintiffs contingency fee practice.
To make matters worse, while the banks refuse to accept the projected fees of the firm's cases as the basis for the loan, that does not stop them from imposing blanket UCC liens on the firm that includes the firm's fees. This "locks in" the firm from seeking any additional financing that would be more adequate and compatible with the capital needs and cash flow realities of today's contingency fee practice.
Contingency fee -based law firms and sole practitioner law practices are considered small businesses, and even before the COVID -19 pandemic, the failure of banks to lend to small businesses like law firms in recent years has been confirmed by FDIC figures:
- Loans of $1 million or less to small businesses have been shrinking consistently since 2008.
- Banks have been exiting the small business loan market, a trend that is confirmed by the decline in the share of small business loans in banks’ portfolios. The fraction of non-farm, nonresidential loans of less than $1 million—a common proxy for small business lending—has declined steadily since 1998, dropping from 51 percent to 29 percent.
- 29% of small businesses fail because they run out of capital.
- Only 48% of small businesses overall have their financing needs met.
- The average SBA loan amount is only $107,000.
- 36% of small businesses that were denied at least some of the funding they requested were denied because of their credit score.
Solution: Non-bank law firm financing tailored for contingency fee practices.

Advanced Legal Capital and its network of affiliated investment groups offer our attorney and law firm clients exclusive access to non-bank, private funding, all with deep and stable capital resources. As a result, we have unsurpassed capability to deliver large amounts of specialized funding and financing for attorney loans and law firm financing--with fast underwriting, quick approvals, and prompt funding.
As specialists in law firm lending, we customize loan terms to address the requirements of each attorney or firm client. We are unhampered by bank procedures or limitations, and unaffected by banking policies such as insistence on liquid asset collateral and sterling credit, or the inability of banks to lend against contingent outcomes.
We also offer flexible qualifying, simplified applications, expert underwriting, and expedited turnaround, and can handle both large (from $1 million to $100 million) and smaller loan amounts (from $25,000 to $250,000. Our programs can often approve firms and attorneys that may be facing the occasional credit issues that can arise in the practice of law.
As specialists in law firm lending, we customize loan terms to address the requirements of each attorney or firm client. We are unhampered by bank procedures or limitations, and unaffected by banking policies such as insistence on liquid asset collateral and sterling credit, or the inability of banks to lend against contingent outcomes.
We also offer flexible qualifying, simplified applications, expert underwriting, and expedited turnaround, and can handle both large (from $1 million to $100 million) and smaller loan amounts (from $25,000 to $250,000. Our programs can often approve firms and attorneys that may be facing the occasional credit issues that can arise in the practice of law.
Benefits of specialized funding and financing for trial firms from Advanced Legal Capital
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