When Should Your Law Firm Consider Case Expense Financing?

For plaintiff law firms, having money tied up in cases is part of doing business. You invest in expert witnesses, medical records, depositions, discovery, accident reconstruction and trial preparation long before a case is resolved.

But just because it’s part of the business model doesn’t mean all your firm’s capital needs to stay tied up in litigation.

At different stages of your firm’s growth, and different stages of your life, there may be good reasons to consider case expense financing. The right strategy can help you preserve cash, pursue opportunities and put your capital to work where it can have the greatest impact.

When Your Case Expenses Are Starting to Add Up

When a significant amount of your firm’s cash is tied up in pending cases, it may be a good time for your firm to consider case expense financing.

You may have a strong caseload, but if those cases are taking months or years to resolve, your cash can become increasingly difficult to access. Meanwhile, new cases still need to be funded.

Case expense financing can allow you to preserve more of your firm’s cash rather than continually putting additional money into cases.

When You’re Ready to Grow Your Firm

Growth requires capital.

Maybe you want to hire another attorney. Maybe you need additional support staff. Perhaps you’re ready to increase your marketing efforts, invest in technology or expand into a new practice area.

The challenge is that you may already have significant capital invested in your existing cases.

Financing your case expenses can help free up some of that capital, giving you more flexibility to invest in the growth of your firm without having to wait for cases to resolve.

When You Want to Take on More Cases

If your firm has the experience and capacity to handle additional cases, but you’re hesitant because of the expenses involved, case expense financing can be one strategy to consider.

Freeing up capital from your existing cases can give you greater flexibility to pursue new opportunities without putting all the financial pressure on your current operating cash.

For a growing plaintiff firm, that cash flow flexibility can be valuable.

When You Want to Strengthen Your Cash Flow

Even the most successful firms can experience cash-flow challenges.

The timing of revenue and expenses doesn’t always line up. You may have substantial assets in pending cases but still need to manage payroll, overhead, marketing, technology and other day-to-day expenses.

Case expense financing can help create more separation between your litigation expenses and your operating cash.

That can make it easier to manage business today while continuing to invest in cases that may not generate revenue for months or even years.

When You’re Thinking About Your Personal Financial Goals

For many attorneys, business decisions and personal financial goals are closely connected.

At different stages of your career, you may have very different priorities.

Early on, you may want to reinvest everything into your practice and build a strong foundation.

Later, you may be thinking about putting more money toward your children’s college funds, increasing retirement savings or helping care for aging parents.

And sometimes, you simply want to enjoy the success you’ve worked so hard to achieve by taking your family on vacations to make memories.

When your own capital is tied up in cases, those goals can feel further away.

By using financing for qualified case expenses, you may be able to free up capital that would otherwise remain invested in litigation and use your available resources more strategically.

When You’re Approaching Another Stage of Your Career

Case expense financing isn’t only for young or rapidly growing firms.

Established attorneys may have millions of dollars invested in successful cases and a substantial amount of their firm’s capital tied up in litigation. At that point, the strategy may be less about growth and more about creating flexibility.

You may want to increase retirement contributions, diversify your investments, prepare your succession plan or simply reduce the amount of your personal wealth tied up in pending cases.

Case cost financing can be another tool to consider as you think about what you want the next stage of your career to look like.

Your Capital Should Give You Options

Freeing up capital that is tied up in your cases can give you more choices no matter what stage of life you or your firm is in.

Case expense financing can be a strategic tool for managing your firm’s capital at virtually any stage from building a practice and pursuing growth to preparing for retirement and everything in between.

At Advocate Capital, we believe your capital should give you options, not limit them.

Your cases may take time to resolve. That doesn’t mean your financial goals have to wait.

Contact us to learn more and get started. Our Directors of Strategic Solutions will learn about your firm, answer any questions you have about our case expense financing service, give you a demo of our AdvoTrac Case Expense Financing Software, and help you apply.

You’ve worked hard to build your practice and your life. Case expense financing can help give you financial flexibility to make the most of both.

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About Donna A. Jones

Donna Jones is the President at Advocate Capital, which became a part of Pinnacle in 2019. Ms. Jones is a member of the Board of Directors of Advocate Capital and serves as a member of the Credit Committee. Her responsibilities include education and training of Advocate Capital staff regarding civil litigation, coaching new clients on the fundamentals of Advocate’s online services, as well as its proprietary software application, AdvoTrac®, and all activities related to existing and prospective clients.