Contingent fee law firms often have to make significant financial investments in their cases to obtain successful results for their clients. Case expense financing is a powerful solution that allows law firms to secure the necessary financial resources to get the best results for their clients while still effectively managing cash flow and growing their firms. Law firms that self-fund their cases are essentially offering interest-free loans to their clients.
However, some firms may be concerned about the ethics of this financing model or how clients might perceive an interest pass-through. Let's explore how case cost financing benefits clients, why it aligns with ethical practices, and how to address potential client concerns effectively.
The Ethics of Case Expense Financing
We believe that our services strictly comply with all published ethics opinions. In fact, we are not aware of a single ethics ruling or court decision that conflicts with our services.
With the proper language in your retainer fee agreement, case cost funding is ethical and beneficial to law firm clients. If you'd like to update your attorney/client fee agreement to enable your firm to pass borrowing costs through to your cases, visit our Sample Fee Agreement Language page.
By utilizing case expense funding, firms can hire the best experts for their clients' cases without worrying about how it will impact their cash flow. It's a win-win; the law firm's clients get the highest quality representation, and the firm can get their post-tax profits out of their cases and use them how they best see fit.
To request information regarding ethics opinions in your state, please visit our ethics page or call us toll-free at 1.877.894.9724.
Don't Just Take It From Us
Many of our clients have told us that they have not received any objections from clients on their use of case expense funding and interest pass-through. To hear from some of our clients, check out our testimonial interviews on our videos page in the Success Stories section.
How Case Expense Financing Benefits Clients
Case expense financing directly supports clients by enabling law firms to:
1. Access Critical Resources: Firms can invest in the best expert witnesses, advanced technology, and thorough case preparation without financial hesitation. These investments often lead to stronger cases and better outcomes for clients.
2. Maintain Case Focus: When operational cash flow challenges are solved, attorneys can dedicate more energy and resources to advocating for their clients.
3. Level The Playing Field in Court: The defendants and insurance companies firms face in court don't finance their cases with post-tax cash out of their own pockets. Case cost funding levels the playing field for plaintiff law firms and benefits their clients.
4. Take on More Cases: Law firms can help even more clients with the financial support of case expense funding. They can take on more cases without worrying about having enough money to fund case expenses and run their business.
Addressing Client Concerns About Interest Pass-Through
Some firms may hesitate to pass interest costs to clients, worrying about objections. However, with the right approach, clients can see the value and fairness of this model:
1. Educate Clients Early: If questions or objections arise, be upfront about handling case expenses and why the interest pass-through exists. Emphasize that it allows the firm to provide the highest level of representation.
2. Highlight the Benefits: Explain that financing allows the firm to secure resources directly impacting the case's strength and the client's potential compensation.
3. Provide Context: Show how the financing model is standard practice in the industry and is ultimately structured to serve the client's best interests.
4. Be Transparent: Ensure clients understand that interest charges only apply to necessary expenses directly tied to their case. This transparency builds trust and confidence.
Empowering Firms and Clients Alike
Case expense financing is more than a financial tool; it's a strategic approach to client advocacy. When appropriately implemented and communicated effectively, it benefits everyone involved. Law firms can focus on winning cases without financial constraints, and clients gain access to the representation and resources they deserve.
Advocate Capital specializes in providing case cost financing tailored to the needs of plaintiff law firms, enabling them to achieve justice for their clients while maintaining financial integrity. To learn more about how we can help your firm and your clients, contact us today.
