Avoiding Lawsuit Funding Hassles
Lawsuit funding requires attorney cooperation. Lawyers and their support staff must compile and forward relevant documents, engage in the underwriting process and sign off on funding agreements. Although some attention is required, the amount of time plaintiff firms must devote to the process can be minimized. In this post, we examine how attorneys can best avoid lawsuit funding hassles.
Legal Loans – Part of the Practice
Lawsuit “loans” are cash advances on pending lawsuits. They are a response for clients’ immediate need for cash during the litigation process. Injured plaintiffs need financial support, especially since they often are unable to work due to injury. State ethics rules prohibiting attorneys from advancing money to clients removes one potential solution.
While lawsuit loans are only one possible solution to plaintiffs’ cash flow problems, many plaintiffs choose lawsuit loans to bridge the gap between filing suit and its conclusion. Lawsuit loans are specialty financial transactions. As such, they require particular expertise in practice. Like all businesses, things don’t always run smoothly. But while problems can and do occur, solutions are also available.
A Common Situation
A routine lawsuit funding application requires legal staff to compile paperwork and send it to the funding company for processing. In some instances, certain documents might not be available. This is not surprising because although a funding company requests the information, the firm simply may not need it yet.
One common example of this is a complete medical file. Many law offices wait to compile medical records until the client is done treating. In this way, the medical records are requested once, eliminating the need for multiple requests. This practice doesn’t negatively affect the case, since most personal injury cases are not settled until after plaintiff finishes treatment. Settlement value is impacted by an injury’s permanency (maximum medical improvement). If plaintiff is still treating, experts are unable to determine the injury’s severity and permanency.
Not having a full medical file can hinder a lawsuit funding underwriter‘s ability to estimate a potential settlement value. And since that value determines what amount of funding is offered to the client, not having the information sometimes results in a denial of the funding request.
Resulting Hassles
Handling desperate client calls is a difficult situation and always challenging. On the one hand, lawsuit funding should not hassle the law office. On the other hand, lawyers strive to be attentive to their clients’ needs. Each successful case is not only revenue for the firm, but the client becomes a potential referral source for future business.
Some people are just looking for a reason to complain. Not being able to provide information required for the funding process, even though the documents are not immediately necessary, is simply one reason for client dissatisfaction.
Solving the Hassle
Obviously, the idea is to remove lawsuit funding hassles from personal injury firms who want to spend as little time as possible on the process AND secure the best possible funding terms for their clients. There is a way to accomplish this, but it involves some up front leg work, a little bit of experience and a dash of faith.
The solution is to create a relationship with a reputable legal funding team who is intimately aware of the challenges facing plaintiff firms. Establishing a working relationship with a lawsuit lender is a symbiotic relationship. The firm refers their clients who need funding directly to a funding company. In return, the funder provides quick and efficient service, the best possible funding terms, and an understanding that if a case should not resolve as expected, compromises will be entertained in the interest of settlement. Transparency is how mutually beneficial relationships are built. It also allows attorneys to take the hassle out of the legal funding process.
At Fair Rate Funding, we want to be an asset to your firm. If you have any questions or seek any information regarding lawsuit loans in general, please contact us online or give us a call. We are here to help and are at your service.
Thank you for your interest in the lawsuit funding business and how attorneys can benefit from lawsuit funding.
