First things first, what is legal funding? In simple terms, legal funding is a mechanism that enables attorneys and plaintiffs to have a cash flow based on the value of future proceeds. It has been growing substantially in recent years, even though it is considered to be a somewhat new field.
Here at Baker Street Funding, we intend to give plaintiffs solace and breathing space when victims are short on capital, especially after they’ve been through considerable trauma and emotional turmoil.
Our business model is focused on helping people. In simple terms, everyone gets to be better off as a result of legal funding arrangements: attorneys and plaintiffs get to have enough capital to proceed with their case, and the funding firm gets to take its share of the winnings as agreed beforehand.
Is legal funding similar to a loan?
The simple answer to this question would be ‘No.’ Legal funding is simply not a loan. More often than not, when law firms are looking to ensure enough credit to proceed with their caseload, they tend to opt to approach financial institutions.
What these banks will do is that they will provide law firms with a loan or else a line of credit.
There are two main problems with such products: Firstly, they do not take into account the specificities of legal practice, and generally, they do not offer as much capital as would be needed. Secondly, every loan needs a guarantor, and therefore you would personally need to guarantee your loan unless the firm in question has a long-standing relationship with the bank. What this means is that traditionally, loans are a risky instrument when used for this particular purpose.
At Baker Street Funding, we make sure that no such risks are involved. If anything, our funding process is solely based on your current and former case portfolio.
Your history with previously settled cases will also be taken into account.
Most importantly, however, all of our funding agreements are non-recourse, and therefore you will never ever have to act as a personal guarantor to the case’s success.
What can law firm funding be used for?
Legal financing is a magnificent asset to attorneys because it helps them access cash flow, cover expenses, and grow their practice while litigating a case or waiting on a settlement.
You can use law firm financing for profitability purposes. It gives you access to capital that you otherwise could not get from a traditional financial institution. These are some of the ways you can use law firm funding:
- Office space.
- Marketing capital.
- Cost of a large corporate dispute.
- Expert witness fees.
- Discovery costs.
- Laboratory fees.
- Deposition expenses.
- Administrative expenses
- Medical record expenses.
How do you fund a law firm?
The process for obtaining legal funding for your law firm is quite simple, straightforward and it takes 72 hours. The first step in the process is to request legal financing from Baker Street Funding, following which we will review your application, including your basic information and list of cases.
Secondly, we will then proceed to conduct our due diligence process, further setting up a conference call in order to discuss any queries that we might have about your case portfolio and your litigation experience.
The third and final step then is the approval of the funding. Should your application be successful, then the final terms are generated, and a legal financing contract is drafted and sent to you for your approval.
Once the contract is approved and executed, you will be wired the funds via wire without undue delay.
The bottom line
Legal funding can be used for a variety of things. When the plaintiffs are on the receiving end, funding can cover lost wages, medical bills, or even daily expenses. In other words, getting access to money can give plaintiffs some breathing space when it comes to continuing with their daily lives.
When on the other hand, it’s lawyers that are getting funded; rest assured that, unlike banks, we at Baker Street do not require collateral and credit scores.
On the contrary, we understand how such cases and your funding application will solely be processed based on the likelihood and potential value of settlement and judgments. Likewise, this applies also when plaintiffs get funding, and therefore credit checks are not part of the equation, come what may.
In simpler terms, the criteria used for funding to be granted is as follows:
- How strong your case is, and the likelihood that a favorable outcome will be achieved;
- The potential for returns through settlements or verdicts, based on the outcomes of past cases;
- The potential and forecasted timeframe for the conclusion of the litigation process; And
- The balance between the potential profit for our investors, as well as the profit for the client after the completion of the litigation or settlement process.
Lastly, it must also be stated that Baker Street’s legal funding solutions for law firms and attorneys are offered with a 2% flat rate. We understand the financials of law firms, and as always, we remain determined to continue funding attorneys and their clients, which in turn enables them to meet long-term strategic goals.