Four Reasons to Finance Case Expenses

By Joe Fournier

If you are a plaintiff’s side personal injury firm, and take most or all of your cases on a contingency fee basis, then we strongly recommend that you consider financing your case expenses. There are reputable companies that will work with you to help you finance your case expenses and other working capital needs. The underwriting process is less rigorous than attempting to work with a bank, and your collateral, at least initially, may be your current case inventory. Here are four to reasons consider financing your personal injury case expenses:

1. Increase cash flow. You want to increase your own cash flow and maintain flexibility within your firm. You have large cash outlays for expenses such as medical records, investigations, and experts. Cash flow is a concern, especially as your firm grows because the inventory of your cases likely grows at a faster pace than your settlements and verdicts. Financing some of these case expenses allows you to keep cash on hand for other short-term business needs, such as payroll and marketing, or for yourself.

2. Provide better legal services. Having more cash on hand allows you to focus on handling the case and the legal work, rather than trying to recoup your expenses. You will have the flexibility to hire that one extra expert, or engage a professional to do an accident reconstruction, without concern for cash flow. These actions will increase the value of your cases. Contrary to some attorneys’ concerns, your clients will like this and will appreciate that you took the extra step to ensure maximum potential value, rather than short-settling their case.

3. Counter-attack the insurance industry. You may not feel like you “need” the money, but there is no reason to be giving interest-free loans to clients, especially since you cannot always affect the cycle time of a case. In the current climate, insurance companies are taking more cases to trial, providing lower settlement offers, and sometimes flat out refusing to make any offers at all. The insurance companies and their lawyers are increasing the cycle time of your cases, through no fault of yours, and the time away from your money increases. Fight back by gaining access to extra funds.

4. Better balance sheet. A better balance sheet increases the value of your law firm. Cash is simply a more attractive asset than long-term Accounts Receivable. Whether your goal is to sell, merge, or retire, building a more valuable entity will give you more options in the future. Replacing reimbursable case expenses with cash is a smart decision; an astute buyer or evaluator will know this and place a higher premium on your firm.

If you are looking to Make More Money, FasterTM and improve the value of your law firm, then contact Fournier Legal Services via email at or by calling our office at 860.670.3535.