Lawyer Line of Credit

A lawyer line of credit can provide the resources a plaintiff's attorney needs in order to tackle financial challenges while keeping his or her practice running.

When A Lawyer Line of Credit is Needed

For lawyers operating a plaintiff's practice, managing cash flow can raise a challenge as fees earned are most often dependent on winning the case. Because these fees are contingent, it can make it difficult to meet financial obligations.

Where to Get a Line of Credit for Lawyers

Lawyers have four basic options when it comes to obtaining the cash needed to keep their practice flowing smoothly.

• Visit your bank and obtain a line of credit to have available to help meet payroll, expert expenses, etc.
• Find a company that specializes in funding for plaintiff's lawyers. Do you homework because interest rates tend to be higher than what you pay a bank.
• Combine an hourly practice with a contingent fee practice and use funds from the hourly practice to help meet expenses.
• Build a contingent fee practice with a calendar of cases that will allow you to meet your financial obligations in a timely manner.

If cash flow is a problem for your practice, an attorney line of credit is the perfect way for you to have access to the immediate capital you need to maintain an appropriate cash flow. Interest accrues solely on the unpaid balance and often interest expenses can be passed on to the client as a case-related expenditure. A line of credit for lawyers provides cash flow to:

• Fund a defense team that can keep up with the best
• Garner the services of the best experts
• Keep up with salary expenses
• Keep up with litigation expenses
• Pay other case related costs

Qualifying for a Line of Credit for Lawyers

In order to qualify for a lawyer line of credit, your firm will need to meet specific requirements as stipulated by the agreement. Requirements include things like:

• A qualifying length of time you've practiced law with your firm
• An specified average in net fee revenues
• Clean history

For lawyers who don't qualify for an attorney line of credit, fee acceleration can offer similar benefits.

Companies that Finance Law Firms

Companies that finance law firms are part of an industry that emerged about five years ago as the result of the long-established practice of lending money to plaintiffs who were engaged in personal injury litigation. With the increased cash flow, lawyers could invest borrowed money into a case, instead of their own funds on which they'd already paid taxes.

Fee Acceleration

If your firm doesn't meet the requirements to qualify for a line of credit, a fee acceleration is another cost-effective solution for the cash flow difficulties of a plaintiff's lawyer. Fee acceleration purchases unpaid legal fees from settled cases and lawyers have money on hand as it is needed.

Take Time to Maximize Your Cash Flow

As a successful lawyer, you want to focus on winning cases, but in the process don't let your practice suffer. Optimize your cash flow and your business will experience consistent growth and a steady influx of new clients. If you ignore the need to optimize cash flow, you'll fall prey to the vicious cycle of chasing money and turning the profits from your last case into case expenses for your current case. Obtaining a line of credit for attorneys can help. \

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