Perhaps you’ve finally secured that proverbial case of a lifetime—a case with potentially massive damages and a deep-pocketed defendant (or defendants) who’ll be able to pay when the time comes. The case may involve uncertain liability, however, that’ll be difficult to prove without extensive expert support, or it may be fraught with complicated legal and scientific issues. Regardless of the specific hurdles, you’ve determined it’s going to require a substantial investment of both time and money.
This is a classic case of risk vs. reward for both you and your client. You know the case won’t be easy, quick or cheap.
What can you do—moreover, what should you do—when you find you may not have adequate resources to fund a case?
The defendants will almost certainly try to grind you down, wear you out and make the litigation financially untenable.
You’ll have to weather discovery battles, depositions, expert analysis, reports and testimony, motion practice, possible interlocutory appeals and, at the end of it all, awaits the potential for a costly trial.
You may even require additional or dedicated staffing for just this one case.
Contingent fee attorneys traditionally have had few options through which to finance a potentially expensive and long-term litigation:
- Option No. 1: Invest fees earned from your other cases into the case.
- Option No. 2: Cobble together personal savings and assets (including fees earned from your other cases as stated in Option No. 1) in an effort to see the case through to the end. Even then, it may not be enough. A further pledge of assets—for example, a home equity line or second mortgage—may come into play with no guarantee of recovery.
- Option No. 3: Partner with another firm on the case—an option that comes with a high price tag. Typically co-counsel who agree to take on some or all of the case costs will expect to receive a significant share of the ultimate fee. It may be 50%, 60% or more. Suddenly, that case of a lifetime isn’t looking quite as life-changing anymore.
Fortunately, there’s now another option available—specialty financing.
Specialty financing for lawyers and law firms has become a popular method of funding those anticipated (and not so anticipated) litigation expenses. You now can obtain the capital you need to take on that big case and see it through to resolution. A line of credit or loan from a litigation finance company may also afford you other benefits, such as liquidity to cover your firm’s day-to-day operations during the pendency of the case. This gives you the flexibility to determine how best to deploy your financing resources—whether to cover litigation costs, such as additional staff, experts or trial expenses or to cover office rent, utilities or other operational costs while the litigation is pending.
In short, you’re firm is no longer limited by traditional forms of financing. There exists a variety of specialty financing solutions that’ll allow you to pursue that case of a lifetime, without having to put your personal assets or the rest of your practice in jeopardy to do so.