Whether fresh out of law school or a well-established partner, every personal injury lawyer faces certain inevitable financial challenges and volatility in their practice. The shifting of professional goalposts can make money management an ongoing and all-important task. As a personal injury lawyer, your job is to help others in vulnerable positions. You can best do so if you also protect yourself from financial insecurity in the process. To ensure you and your firm are well-equipped to minimize stress and maximize legal success, check out some of the most common financial challenges for personal injury lawyers – and tips for addressing them – below.
Consumer legal funding companies provide funds to individuals to cover basic living expenses while they pursue legal claims. In return for those funds, legal funding companies purchase an interest in any proceeds that individuals may recover on their legal claims, and individuals agree to make payments to the funding companies from any proceeds that are recovered. The individuals have no obligation to make payments if they do not obtain a recovery (in other words, the funding arrangement is “non-recourse”), and their obligation is to make payments only from the proceeds recovered.
Trial lawyers face a Catch-22 when they work to build their litigation business: they always need additional capital to take on potentially lucrative new cases, but accumulating these funds is often infeasible. This is because their recoveries on existing cases are often consumed by the day-to-day costs of running their practice and providing their existing clients with optimal service.
Having a full understanding of all available funding options can help trial lawyers grow their practice and stay on the path to future success without impairing their existing business. For those who feel stuck in the Catch-22 of capital formation, here’s a basic primer to help you understand your choices, so you can determine what makes sense for you.
Data is powerful – especially when used in tandem with advanced artificial intelligence (AI) technologies that continually gather and evaluate information and provide insightful learning and predictive assessment. Together, data and AI can serve as an invaluable tool for lawyers who are constantly weighing the risks and opportunities of different cases. Instead of relying on anecdotal and remembered information, lawyers can use data and AI to make more refined judgments that benefit both the people they represent and their own business.
If you were disappointed by the Florida Bar Board of Governor’s November 8, 2021 decision to reject the proposals for non-lawyer ownership of law firms, you are not alone. Many small to mid-size law firms were hopeful that infusions of equity by non-lawyer investors would be a solution to uneven cash flows, the need for capital to grow a practice area, and the rising costs of running a law firm business.
Being involved in an accident is traumatic. And for those who are injured, the aftermath can be just as bad. Victims often find themselves juggling the technical aspects of legal claims and police reports while they are attempting to rest and recuperate. During this stressful time, insurance companies frequently make a settlement offer, and exhausted victims can be tempted to accept the sum, just so they can be done with the whole experience. But be forewarned: while an initial settlement offer can be alluring, it rarely amounts to what the victim truly deserves.
Managing finances can be challenging — even for lawyers. While popular culture portrays attorneys as big moneymakers, the reality is that many routinely grapple with financial stress. This is especially true for lawyers running their own practice and recent law school grads who are navigating the hefty cost of student loan payments. Lawyers can be highly intelligent experts in the law. But that does not make them masters of finance. In fact, there is mounting evidence that money troubles are taking a toll on the health and careers of lawyers. Here are four things lawyers can do to position themselves for financial success.
When taking on a case, lawyers should carefully analyze expected timeline and the associated costs for reaching a resolution. This can create significant “durational risk” and debilitating financial pitfalls. The challenge is that it can be impossible to determine exactly how much time or money might be spent until the case is settled; forces outside the lawyers’ control can significantly affect how long the case runs. That’s why it’s vital to analyze the risks of an extended duration in the case, and be sure to tap into commercial legal funding services to cover litigation costs and to empower you and you client to go the extra mile if necessary to get the optimal result. The questions below can help guide your approach.
The COVID-19 crisis has made working from home a necessity for many attorneys. While solo practitioners may not have an issue going into their own office, and while large firms have the financial resources to do whatever it takes to keep their attorneys billing hour after hour, small and mid-size law firms are in many respects facing some of the greatest challenges as a result of the pandemic.
While there are no hard and fast rules, Cartiga offers six signs that can indicate whether a lawyer is ready to start their own practice.