Recently, I was asked what benefits a lawsuit funding company can offer attorneys who represent clients in need of litigation capital or a pre settlement loan.  That is, clients who have an immediate need for cash but who have already exhausted other avenues of money or otherwise do not have the ability to obtain cash for bills, medical treatment, debts, shelter, cars, etc.

This article will address this issue in further detail since it really can make a difference for the client in desperate need of funds.

Perhaps the most important thing to understand is that the lawsuit funding process begins and ends with the attorney’s cooperation.  Because of this, clients and lawsuit loan companies would be well served by understanding the attorney’s position as it pertains to the pre-settlement loan process.

Abraham Lincoln supposedly once said “An attorney has only his time and advice to sell.”  Along these lines, an attorney’s time is his inventory and no enterprise wastes their inventory if it wants to be profitable. Attorneys therefore must take great care in protecting their inventory(time) time as they pursue their business.

This practice is especially important when attorneys are paid on a contingency fee retainer agreement.  This means the attorney only gets paid a fee if he is successful in the pursuit of the claim/lawsuit.  This type of fee arrangement is most common in personal injury cases where the plaintiff needs legal counsel to pursue a claim for pain and suffering and other damages as a result of the negligence of another individual or entity.

Not coincidentally, the most common lawsuit type which qualifies for lawsuit cash advance funding is personal injury cases.  So what can pre-settlement loan companies AND clients do to help out the attorneys?  Here is how.

1.  Understand that the attorney’s time is very valuable and act accordingly by minimizing the amount of time he needs to spend on the transaction.  Because paperwork is essential to the lawsuit funding process, applicants and pre settlement loan outfits can:

a.  Ask for ALL the paperwork up front.  Of the utmost importance is to only “burden” the law office once so that they can get back to their business.  Unlike a mortgage application where the client is repeatedly asked for more and more information as the process continues, lawsuit funders would be well served to request all the required documents up front.  This will avoid the necessity of the law firm having to field multiple calls and dig through the file more than once.

b.  Specify exactly what type of paperwork is needed.  In most instances, insurance information, an incident report, and evidence of damages are required for a legal loan to be approved.

c.  Ask for only the most important documents.  Personal injury files can become very large, especially for cases with “heavy” injuries.  Requesting only material documents means the lawyer’s support staff will not spend hours in front of the fax machine sending over information that may or may not have an impact on the decision to offer a lawsuit cash advance.

2.  Once the paperwork is received, be a “one stop shop” for the clients’ needs by having access to multiple investment pools of funds.

Some legal loan companies are equipped to handle only certain types of cases at any given time.  If the applicant does not fall within the guidelines, then the case is denied for the pre-settlement loan.

In some instances however, companies (like Fair Rate Funding) have access to multiple pools of funds.  This is good news for the applicant and their attorney since the the paperwork only has to be submitted once instead of having the same documents forwarded multiple times to multiple funders to review.

3.  Lawsuit funding underwriters thoroughly review the file.

Underwriters can help save applicant’s counsel valuable time by understanding the facts and circumstances of the case so that he can speak intelligently with the attorney as part of the underwriting process.

Attorneys, clients and lawsuit funders must work together to provide litigation finance to persons in need of an immediate cash advance against the proceeds of their pending case.  By understanding and respecting the legal professional’s time and business, the advance of money for lawsuits becomes a very quick and easy process.

Thank you for your time and interest in the pre settlement loan business.

pmc