How to talk with your lawyer about lawsuit funding
Your attorney is on your side. It may not always seem like it, especially given the stereotype of the selfish attorney only out for himself, but he is. After all, the more your attorney is able to recover for you, the more he receives. So it makes sense that your attorney will do everything in his power to help you through your lawsuit.
The one thing many attorneys struggle with, though, is putting themselves in their client’s shoes. There are a number of reasons for this. Attorneys are busy, because as hard as they are working on your case, they also may have dozens or sometimes even hundreds of other clients. That can blind lawyers to the issues that any one of his clients is experiencing.
Also, attorneys, in general, are pretty well off financially. They don’t rely on every single paycheck to pay an important bill. If they get injured, they work primarily at a desk, so they often don’t miss time from work to recover. In these ways attorneys are different than their clients.
So many times when a client is in dire financial need, an attorney can’t relate. They may have good intentions, but their advice of “just wait until the case settles” isn’t always feasible. When a client suggests taking a lawsuit loan on their case, an attorney might make the knee-jerk reaction of saying ‘no’. Often this is because attorneys are misinformed about legal cash advances. Here are some common reasons they may say to not cooperate, and what you can say to counter them.
“Those loans are too expensive.”
There are companies out there who charge through the teeth, it’s true. However, in most states it’s unethical for the attorney to loan you money, and many clients don’t have relatives who can give them the cash they need. This means that outside companies are the only option. Do your research to find a company that can offer you a low interest rate. Inform your attorney that your company can get you that low rate. It may change his mind.
“They make me run through hoops to get you the money.”
As stated before, attorneys are busy. However, in most cases, cooperating with a funding company quick and easy. Funders ask for a little bit of documentation and maybe a short phone call. This can be done in a matter of minutes, not hours. Then, when a funding agreement is drafted, your attorney will have to sign just a page or two. All told, this commitment is very little to help their client.
“It won’t help your case.”
While your attorney is correct that, in most instances, the money doesn’t go directly to your case, it DOES help your case. If you are in such dire circumstances that you’re about to lose your house or car, you may be tempted to take a very low offer. Not only would that be unfair to you, your attorney would lose out on a larger fee. Taking a cash advance can help you get those creditors off your back long enough to stay through to the end of the case. This will see your case resolve at its true value.
“Those guys are just legal loan sharks.”
This is untrue, and wildly so. If you lose your case and the funding company loses its money, nobody comes after you with a lead pipe. Every funder knows the risk it takes when it funds a case. What’s more, in several states, funding companies have worked with the attorney general to form guidelines and regulations that make sure the client is protected. Some of these protections include having a chart on every contract that tells exactly what would be owed whenever the lien is paid off. These protect you.
“They’ll take your whole settlement when your case settles.”
Again, untrue. Most companies try to advance just enough money to pay your bills without creating too large a lien on the file. After all, they want to get paid their full amount, so they try very hard not to overfund a case. Doing this means that after everybody is paid off – your attorney, your medical providers, and the funder – there is still plenty left over for you.
When all else fails, and in rare chances they do, remember that you hired your attorney, not the other way around. They work for you because they get paid out of your settlement when the case resolves. Remind them politely of the fact that they are on your side.
Attorneys know much more about litigation financing than they did fifteen years ago when the industry was just getting going. Still, some attorneys are misinformed about what to expect. If an attorney ever gives you resistance in obtaining funding, look over the above suggestions so you know exactly what to say.