In contingency fee litigation, success often depends on a law firm’s ability to invest in the resources necessary to build strong cases: expert witnesses, advanced technology, depositions, medical records, and more. These costs add up quickly, and for many firms, the question becomes how to fund these expenses without putting strain on cash flow or profitability.
The Role of Borrowing Costs in Contingency Fee Cases
When a firm uses contingency fee financing, it gains the ability to pay for case expenses without holding up operational capital or personal funds. Like any loan, this financing comes with borrowing costs, but law firms can integrate these costs into their fee structure to maintain profitability.
Recovering Borrowing Costs with Clear Fee Agreement Language
Law firms that utilize case expense financing can ethically recover borrowing costs from the case itself, as long as it’s appropriately disclosed in the client’s fee agreement. Advocate Capital provides sample contingency fee agreement language that allows firms to clearly include interest as a reimbursable expense.
By using this language, firms can ensure that the total cost of pursuing justice is understood and accounted for, and they don’t have to bear those costs alone.This ensures transparency with clients. When clients understand that financing case expenses allows the firm to secure the best possible resources for their matter, they often recognize the value. After all, better resources can lead to better outcomes.
How Advocate Capital Makes Cost Recovery Easy
Advocate Capital’s proprietary case expense tracking software, AdvoTrac®, helps firms stay on top of expenses and interest, ensuring nothing is missed when it’s time to recover costs at settlement. This level of tracking not only supports ethical compliance but also maximizes a firm’s ability to recoup financing costs efficiently.
AdvoTrac® tracks each expense advanced on a case-by-case basis. This allows firms to:
1. Track borrowing costs in real time
2. Easily identify total reimbursable expenses at case settlement
3. Ensure no eligible costs are overlooked
4. Provide clear documentation to support cost recovery
With AdvoTrac®, firms gain the tools to recover the money spent on the case, keeping their finances healthy while continuing to serve clients with excellence.
Maximizing Case Expense Recovery with Advocate Capital
Our case expense financing model is built specifically for contingency fee law firms. We offer more than just capital; we offer a complete system to help you recover your case expenses ethically and efficiently, including:
1. Access to AdvoTrac®
2. Sample fee agreement language for cost pass-through
3. Support from our Strategic Solutions and Credit teams
4. Ongoing account guidance from your dedicated Account Manager
Whether you’re managing hundreds of cases or just a few high-value ones, we give you the structure and support you need to maximize your returns.
Help Your Clients While Protecting Your Bottom Line
In contingency fee litigation, success requires investment. By strategically managing and recovering case expense financing costs, law firms can protect profitability, invest in stronger cases, and continue growing without sacrificing cash flow.
If your firm wants to learn more about how contingency fee financing and sample fee agreement language can help you manage law firm borrowing costs and ensure effective case expense recovery, contact Advocate Capital today.
