Solutions for Law Firm Financing, Attorney Funding, and Law Firm Lines of Credit
Law Firm Financing and Attorney Funding: A Better Approach
Advanced Legal Capital offers customized law firm and attorney financing and funding solutions in the form of loans and lines of credit, as well as fee advance funding based on pending fees in settled cases, or cases that have reached successful jury verdicts and money judgments that are presently on appeal.
Our attorney and law firm funding and financing programs help to smooth out the "peaks and valleys" cash flow cycles inherent in a contingency fee practice. While our varied law firm financing programs are designed specifically for trial lawyers with contingency fee practices, they can also can benefit attorneys and firms with diversified revenue streams, ranging from sole practitioners to large firms, ensuring stable liquidity.
Our innovative lawyer loan and funding options help contingency firms to maximize case results against well-financed adversaries, while protecting the personal assets and credit of partners, and reducing their stress.
Our financing programs enable trial lawyers to free up previously earned, after-tax dollars currently invested in non-interest-bearing case costs advanced. They also enable trial firms to monetize and leverage future contingent attorney fees to pay for current expansion, case preparation costs, and compensation.
Our Law Firm Financing and Attorney Loans v. a Bank Line of Credit
Consider this common scenario that is familiar to many trial attorneys: the lawyer decides to request a loan from the bank that handles the firm's general and client trust accounts. The attorney describes the firm's practice and the most promising pending cases, and outlines the considerable projected fees. Their banker listens politely, then asks the attorney how much equity he or she has in their home or their investments.
This happens all too often because banks invariably require sterling credit, liquid assets, and significant home equity in order to make any loans to law firms. As a result, they rely almost exclusively on the personal credit of the partners and the value of their personal assets in approving and setting loan amounts.
To make matters worse, even when banks do grant law firm lines of credit, they usually approve only a limited loan amount that is inadequate to support the firm's objectives. As a result, partners often must contribute their own after-tax funds, pledge personal assets, and/or tie up personal credit--and shoulder the risk.
Even when banks do decide to lend to trial practices, they encumber the firm's anticipated fees (and everything else) and the partners with a blanket UCC-1 lien, even though the bank is lending an inadequate amount that does not reflect the full value of the firm's future fees, and fails to meet the firm's current and future capital needs.
Banks also frequently require frequent total pay-downs, thus defeating the purpose of borrowing during lean times. They are oblivious to how this adversely affects the day-to-day functioning of the contingency fee-based law practice.
We invite you to visit our law firm financing and attorney fee advance pages to see how our full range of funding options can offer a better solution for your firm.
Loan Solutions for Attorneys and Law Firms That Banks Cannot Provide
Attorneys have learned that banks cannot evaluate or even recognize the full value of future contingency fees as loan collateral. Trial lawyers and firm administrators are painfully aware that most banks are no longer extending or increasing credit lines to law firms and attorneys when they need it most - even to firms that have been responsible, long-term clients of their banks.
Under current banking and underwriting standards, banks generally cannot and will not issue new, or increase existing, law firm loans or attorney lines of credit based solely on future contingent outcomes, such as potential future attorney fees from pending cases. This has been true under banking guidelines in effect since the recession of 2008, and is even more true today due to the COVID-19 pandemic.
Combined with the inevitable "feast or famine" nature of a contingency fee practice and the costs of litigation, this creates severe cash flow problems and financial uncertainty for trial attorneys and law firms.
The inability of banks and traditional lenders to place value on the true assets and business models of trial firms forces equity partners and sole practitioners to take out mortgages against their real property, exhaust or encumber personal credit, and pledge assets to collateralize a personal loan--often for a loan amount that is often insufficient to support the practice.
A Smarter Way to Fund your Success
Too often, the result is unnecessary partner stress, risk, and uncertainty. This can negatively impact what should be the attorney's or law firm's main focus: practicing at the highest levels, and maximizing results for both the client and the firm.
The solution? Advanced Legal Capital provides three types of Tailored Law Firm Financing Options, all of which are based upon the practitioner's most valuable asset: future fees. Because of our expertise in valuing contingency fee cases and fee expectancies, our law firm loan and attorney funding programs can lend significantly higher amounts of immediate working capital based upon anticipated fees than banks and traditional lenders have ever been able-- or willing-- to offer.
In addition, unlike many other law firm lenders, we are not simply re-selling bank loan capital to provide funding. Our financial resources are backed our network of private investment groups. Our resources are stable and substantial, and have not decreased despite the current recession.
Non-Recourse Settled Case Fee Advances
The very idea of enabling attorneys to monetize pending contingency fees in settled matters on a non-recourse basis--with no promissory note, no personal guarantee, and no other collateral to secure the loan--is totally foreign to banks. To address this need, Advanced Legal Capital offers substantial non-recourse Settled Case Fee Advances to attorneys and law firms based on pending solely on pending fees in settled cases.
Click here for more details on Settled Case Attorney Fee Funding non-recourse advances and recourse loans.
Advanced Legal Capital
Funding your success.