Legal funding is now the fastest growing trend in the legal community. In 2016, 28% of law firms used litigation finance while 36% of firms did in 2017. By comparison, only 7% of law firms used lawsuit funding in 2013. Litigation funding, according to the New Yorker, was already a $3 billion asset class in 2016.
What Is Legal Funding?
Legal funding, which is not a loan, consists of funding advances that are drawn out of future settlement amounts. It is essentially a cash advance that can be used by lawsuit plaintiffs and attorneys. A legal funding company will assume the risk and can provide an advance before a settlement is reached (pre-settlement funding), afterwards (post-settlement funding), or prior to when settlement funds are paid (settled case funding).
A lawsuit finance company may finance some or all of a claimantโs legal fees. The lender receives a share of the damages in exchange. It recovers the investment if the case is successful (out of the settlement funds), plus potential fees, but if the case loses, the funder loses its investment.
Why Seek Legal Funding?
A plaintiff without sufficient funds may withdraw their legal claims, missing out on compensation for injuries or losses due to an accident. Personal injury claims are among the top legal disputes for receiving a lawsuit cash advance. It allows a claimant to continue with the legal process, so getting cash is useful when:
- A Plaintiff Lackโs Sufficient Resources to Hire Preferred Counsel: The attorney may be unable to arrange for an alternative fee structure; or they lack financial support from other sources.
- Available Capital Can Be Used for Other Purposes: The law firm can use the extra financial resources towards personal injury claims and use existing funds as operating capital.
- A Law Firm Can Monetize Part of a Litigation Asset: If a judgment is on appeal, monetizing part of an asset can give the firm some financial leverage.
What Is the Long-Term Impact of Legal Funding?
It can take months, even years, for some cases to settle. Case expenses add up. A client can ultimately get a higher settlement if their attorney can negotiate, but this requires time and money. There are many elements to the litigation process, including discovery, gathering witnesses, and sometimes court trials. Legal fees are a fact of life. Ultimately lawsuit funding allows an attorney to fight for higher compensation, with enough of the settlement left over to meet the clientโs needs.
There have also been predictions as to where litigation finance is heading. Larger law firms may soon use funding for portfolios of litigation (rather than single cases), provide resources for startup firms, and relieve business clients defending large claims.
How Can Legal Funding Help Me Right Now?
Once you apply for funding and are approved, youโll have the cash to pay bills and medical costs related to treating your injuries. Lawsuit funding is not a loan so you donโt have to start paying it back with interest, which would add more financial strain. You can even pay for household expenses such as groceries and child care and for travel, therapy, medications, and to pay debts.
Call Lawsuit Cash 24/7 Today
Apply today online and weโll speak with your legal counsel. Once we know the facts of your case, weโll make an offer within 24 hours. There are no hidden expenses and you owe absolutely nothing if you donโt win the case. To learn more, call Lawsuit Cash 24/7 toll free at 866-318-3002.
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