Legal funding has become increasingly popular for personal injury plaintiffs over the past two decades. Although many attorneys remain skeptical about the legal funding industry, the industry can be very beneficial for attorneys.
Attorneys typically take personal injury cases on a contingency fee. This means the attorney does not get paid unless a settlement is reached in the case. The contingency fee is often a percentage of the overall settlement. Thus, attorneys can be greatly affected by their client’s need for money. If clients need money, they are more likely to settle for less money than their case is worth in order to get the money faster. A smaller settlement is a smaller contingency fee for attorneys. For instance, if a client settles $100,000, a typical attorney will likely receive just over $30,000. However, if the client waits to settle for $200,000, the same attorney would receive over $60,000.
Attorneys are often afraid legal funding companies will make their job more difficult. However, after a legal funding company provides a cash advance, the funding company stays out of the case. Legal funding companies do not provide legal advice to clients. All that is provided is the funds for the client to do what is necessary in order to reach a fair settlement.
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Personal injury attorneys will probably have an increasing number of clients use legal funding companies in the future. Although many attorneys are originally reluctant to recommend legal funding companies to clients, attorneys are likely to end up seeing how beneficial legal funding companies can be not only for their client, but for them as well.
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