Thursday, June 12, 2014

Litigation Funding for Attorneys

Many people assume that litigation funding is used by people involved in lawsuits, but actually, many firms also fund law firms as well.  Attorneys normally charge a flat or hourly fee for their services, and often may pass on a meritous claim due to a potential client’s inability to pay. By receiving payment in advance or as they work from a litigation funding company, these attorneys can cover their expenses and repay the litigation funding company once the client's case is resolved.   Often, the litigation funding company is only repaid of the lawsuit is successful.

This model of litigation funding isn't uncommon at all.  Many high-profile class action suits have featured investments from an outside source to enable the attorney to represent the client in question. A prominent example where a law firm has borrowed money in order to litigate on a client's behalf is in the case of the lawyers representing most of the ground zero workers suing New York City over health issues, Worby Groner Edelman and Napoli Bern Ripka.

Other firms, like Amerevision Legal Finance, a niche commercial funder based in New York that focuses on funding real estate related matters, provide law firms with direct payment for work performed when their client has a strong case but lacks the ability to cover the costs of litigating.  Other types of private funders may simply cover the attorney retainers, relieving the burden of up-front payment but still leaving court costs in the hands of the client.  Still more advance money to a litigating client to be used as they wish in anticipation of a settlement.

In summation, litigation funding is not necessarily a one size fits all industry. Each case is unique, as is each client. Whether the client is a Fortune 500 corporation, a self-starting entrepreneur, or a tenacious lawyer, there are different litigation financing options available.  

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