3 Myths About Legal Funding

lady justice holding scales of justice
If you were to stop a random pedestrian and ask them about legal funding, you likely wouldn’t find out much relevant information.

This is because legal funding is such a new industry, and many people are unsure of what it actually is, or have a somewhat distorted idea.

Listed below are the three most common myths about legal funding, and rebuttals to each of the myths.

Next time you’re stopped on the street and asked about legal funding (I’m sure it happens to you all the time!), you’ll be able to give an accurate and informed answer!

Myth #1: Legal funding exploits plaintiffs

This is perhaps the biggest myth about legal funding, and it’s absolutely the most inaccurate statement.

Legal funding does not exploit plaintiffs. It empowers them.

Many plaintiffs who enter litigation have taken a very calculated risk. They know that litigation is expensive, and they know that lawsuits can take a long time to reach completion. Nonetheless, plaintiffs are willing to put time on the line to fight for their rights.

During this time period, plaintiffs may accumulate fees and debts related to their litigation. For example, a personal injury plaintiff may see a mounting pile of hospital bills; a medical malpractice plaintiff may receive endless phone calls from insurance companies. On top of these associated costs, plaintiffs are still acutely aware of their daily expenses and future legal fees.

Legal funding allows these plaintiffs immediate relief in the form of a cash advance.

With this money, a portion of the future expected settlement (the industry terminology for this specific type of legal finance is pre-settlement funding), plaintiffs can live a less stressful life. Moreover, they will not be burdened by the pressure of loan repayment.

This last point brings us to our next myth…

Myth #2: Legal funding is a loan

Legal funding may possess some loan-like features, but that does not make it a loan.

For example, through legal funding, plaintiffs and attorneys can access large sums of capital that can be used immediately to better their daily lives. A loan can provide a similar benefit.
However, much unlike a loan, the money that legal funding companies grant to plaintiffs and attorneys comes directly from future fee or settlement proceeds.

To put things more simply:

An attorney who receives legal funding will receive a cash advance on a portion of their future fee.

A plaintiff who receives legal funding will receive a cash advance on a portion of their future award.

Plaintiffs and attorneys who receive legal funding are receiving cash advances on their own future earnings.

In other words, a portion of the settlement, or attorney’s fee, is purchased by the legal funding company and paid in advance to the recipient of legal funding.

Because legal funding companies accept a greater risk than traditional lenders do, their fees are generally higher compared to traditional lenders. Many legal funding companies offer non-recourse advances; meaning that if a settlement does not pay out for some unforeseen reason, the funding company will accept full responsibility and repayment is unnecessary.

So, as you can see, though there are some similarities between loans and legal funding, there are also a great many differences.

This leaves us with one last myth…

Myth #3: Legal funding is actually…kind of illegal

Many critics to legal funding believe that the industry promotes champerty and maintenance. These (literally) medieval legal concepts make it illegal for non-lawyer parties to be in the courtroom or otherwise influence litigation. By this principle, the argument goes, legal funding should be considered illegal.

Of course, if courtrooms were to fully obey the rules of champerty and maintenance, many other parties would be forbidden from influencing litigation.

For example, insurance companies often cover the costs of certain defense cases; this would no longer be permitted. Friends and family often chip in to help pay for counsel; this would also be forbidden. Only the wealthiest potential litigants would be able to use the legal system, which would completely go against this country’s principles.

 

To avoid illegal and unethical actions in the land of legal funding, many states have passed independent measures to regulate the industry. Moreover, many legal funding firms have united to create ALFA, the American Legal Funding Association. The goal of this organization is to set an industry standard, and guarantee fair and ethical practices across the board.

Now you know the truth about legal funding!

But there’s always more to learn.

Check out our white paper on legal funding to get the full scoop on the industry – different types of funding, when to use them, and how they might be right for you.

If you thought this post was helpful or have any other myths you want to talk about, leave a message in the comments below!

Photo Credit: Themis by Rae Allen


Shayna Keyles has been keeping the world informed on the latest in legal finance with RD Legal Funding, LLC since 2012. She offers writing and content marketing tips at her website, www.contentliaison.com, and tweets at twitter.com/skliaison.

How Legal Funding Can Save You Time and Make You Money

lady justice
A contingency fee attorney does not lead an easy life. This is a fact.

Unlike their billable hour counterparts, contingency fee attorneys don’t start off with plenty of cash, and there’s no guarantee they’ll end up with it either. That’s the whole basis of the term “contingency” – this noble, self-sacrificing purveyor of justice forgoes any form of payment unless the case in question ends favorably for the client.

Of course, a favorable trial outcome does not ensure payment. As with all institutions, the court system is rife with built-in bureaucratic processes, many of which result in procedural delays and stoppages. These stoppages can have profound effects on settlement and verdict payouts, causing delays of a few months to a few years.

Let’s not forget the enumerable hours of discovery and preparation that occur before verdict or settlement can even be considered; the witnesses and experts that all must be consulted; travel and lodging and all other assorted tasks associated with setting up a successful case. All of these things must be budgeted and paid for by none other than the attorney or her small firm.

And let’s keep in mind that an attorney without proper funds has to waste time trying to acquire a stable cash flow, when that time could be spent preparing for the next big case.

You might say it’s a lifestyle of “all work, no pay.”

You might, but the truth is, plenty of contingency fee attorneys are doing just fine. They have lucrative practices in which they represent – and win for – countless clients each year, and they do so without taking a break and without breaking the bank.

What keeps these successful attorneys afloat?

The Secret of The Super-Attorney

All successful attorneys recognize one simple fact: in order to make money, you need to have money. This one sounds like a no-brainer, right?

Consider the example we looked at earlier:

  • Contingency fee attorneys need to invest in discovery tools, travel expenses, and day-to-day finances in order to try a single case.
  • Those expenses can add up to the thousands or ten thousands.
  • This case may not see a full return on investment.

Now imagine how many cases a contingency fee firm might try within a month, or a year, or a decade. The dollars add up.

So we know that running a successful legal practice requires money. But where does this money come from? Well, that depends on where you look.

The easiest solution is relatively rare for your average attorney: this would be a large, personal cash reserve. If a single case doesn’t pan out, not all hope is lost, because the bank is still relatively full, and hopefully the next case will bring in the bucks. Sounds good!

Of course, not all attorneys necessarily hit it big on Wall Street or in Vegas (or otherwise experience some remarkable bank-filling event) prior to opening a law practice.

What about the super-attorneys with average bank accounts? How do they maintain a steady cash flow?

One option here would be pursuing some sort of traditional funding, such as a loan or a line of credit. Both of these options, the former of which is granted in a single lump sum and the latter of which can be paid out in installments over a prescribed amount of time, are available through banks and lending institutions. Interest can vary depending on the loan amount and the agreed upon repayment schedule, as to be expected in any lending agreement. There’s nothing not to like about this arrangement.

Except for the fact that it is incredibly difficult for an attorney to be approved for a traditional loan or a line of credit.

Credit lines and personal loans typically require some form of collateral in order to be considered secure, which can pose a problem for many attorneys. Collateral, as accepted by most banks and lending institutions, is a physical piece of property – a car, a house, a 4,000-year-old diamond from Peru.

Contingency fee attorneys, many of whom are already strapped for cash, often do not own forms of collateral that would be accepted by a bank. For example, while an office could be used as collateral, many contingency fee attorneys share or rent office space, which would disqualify that office as collateral.

Without collateral, it’s nearly impossible to secure a loan.

Fortunately, there’s more to life than loans.

A Case Full Of Cash

Attorneys may not have the physical collateral needed for loans or lines of credit, but they do have a unique form of collateral that can grant them access to a super-unique, super-effective form of financing – legal funding – that was specifically designed for attorneys.

Unlike most other business owners, attorneys have the ability to use their legal receivables, all of which have potential future value, as non-physical collateral. This means that a single specific case, an entire caseload, or the value of an entire law firm can be considered collateral.

For example: a bicycle accident case might have an expected payout of $1.3 million in damages; a medical malpractice class action might have an expected payout of $400 million; a slip and fall might have an expected payout of $580,000. The expected value of each case, or an entire grouping of cases, is viewed as collateral.

Because an attorney’s collateral, in the form of legal receivables, can exist in a variety of forms, legal funding has also been developed to exist in a variety of forms.

For example, a lawsuit can have five or more identities.

  • Early, research-and-discovery form;
  • During prosecution;
  • After a settlement agreement has been reached;
  • During an appeals process;
  • After a judgment has been reached.

Each of these different iterations of a case can be financed with a different type of legal funding, none of which require physical collateral.

The fact that legal funding firms accept legal receivables as collateral sets them apart from traditional lenders. That’s a pretty big deal for attorneys, who often struggle to meet the harsh standards of banks and lending institutions.

Many Legal Funding Transactions are Advances, Not Loans

To put it in the most basic terms, legal funding is simply the factoring of legal receivables. Legal finance firms take the collateral into account – the legal receivables – and purchase an amount of the projected case outcome, which for the attorney typically means the projected case fee. The legal funding firm can then advance this purchased amount to the attorney in question.

Repayment rates vary based on whether the funding is pre-settlement, post-settlement, appeals, or judgment / verdict.

To clarify the concept, legal funding firms make an investment in legal cases. They do this by purchasing a portion of projected earnings of the firm or case, and advance this portion – now owned by the legal funding firm – back to the attorney or law firm. Successful cases result in a monetary gain for both the attorney and the legal funding firm. Often, legal funding firms do not demand repayment in the event of an unsuccessful case.

So let’s say you’ve just settled a case for $6 million but don’t expect to see your fees for another year due to processing delays. You figure you might as well try out this legal funding thing and see what happens.

  • Using a type of post-settlement funding called fee acceleration, you receive a portion of your fee up-front.
  • You have the capital to invest in a new case that just came across your desk (without the advance, you’d have had to pass it up).
  • You have no worries about everyday life. Your advance allows you to continue paying your bills, your mortgage, and your office fees.
  • As expected, your fee is paid about a year later. Because you only sold a portion of your fee to the legal funding firm, the rest of the fee is all yours, except for the amount you use to pay off the discount rate of the advance.

As a refresher, traditional lenders dish out a lump sum or series of payments over a period of time and then ask for repayment with interest at a later date. These lenders require physical collateral, which makes a successful loan application difficult for many contingency fee attorneys.

That’s Why Funding Is Fundamental!

Now you know the real secret to the super-attorney’s success. A constant cash flow means that there’s plenty of time to get everything done, and legal funding is a great way to ensure a constant cash flow.

Have a super legal funding success story to share? We love to hear those! Leave a note in the comments!

Photo Credit: Figures of Justice by Scott Robinson


Shayna Keyles has been keeping the world informed on the latest in law and litigation finance with RD Legal Funding, LLC since 2012. She offers writing and content marketing tips at her website, http://www.contentliaison.com, and tweets at http://twitter.com/skliaison.

WECLAIM: Mass Litigation at Hand

weclaim

In 2014, the French mass litigation landscape changed radically with the “Hamon Law,” which was passed by the French Parliament on March 17th, 2014. Prior to that, the European Commission published a non-binding recommendation (http://europa.eu/rapid/press-release_MEMO-13-531_en.htm) on June 11th, 2013, indicating that all EU Member States should, within two years, adopt mechanisms for “collective redress” which allow multiple claimants to seek damages or injunctive relief on a collective basis or through a representative claimant.

The bill granted 16 government-approved consumer associations with the monopoly to introduce legal action on behalf of an unlimited number of consumers.

Unfortunately, this bill hasn’t established an efficient system for the following reasons:

  • A narrow scope (issues related to health and the environment are excluded)
  • Unlike class actions in the US which provide for an “opt-out” procedure, class actions in France are based only on an “opt-in” system
  • The government-approved consumer associations have limited human, financial, and technology resources
  • A complex four step procedure

The Lift of the Client Solicitation Ban for Attorneys: An Opportunity

Ironically, article 13 of the Hammon Law also transposed a specific provision from another EU Directive (the Services Directive or Directive Bolkenstein), published on December 12th, 2006, which provides that lawyers should be allowed to advertise. The lift of the solicitation ban was an opportunity that we decided to seize, in order to transform the inefficient opt-in regime to an efficient one.

Weclaim was born on the idea that despite the lack of a proper opt-out regime, we could still build a market alternative to run class actions effectively. We created a web platform that combines technology, straightforward and intuitive business services, cloud solutions, litigation financing, automated claim procedures, and the latest in IT services that enables victims to join a lawsuit launched by attorneys.

Litigation Funding is Key to Success

Why is litigation finance key to the success of Weclaim? Since French attorneys (and most Europeans) are prohibited from running a case on a contingency basis, legal fees would have been a strong deterrent to claimants.

How Does it Work?

Any lawyers across Europe or the world can now submit a class action proposal by visiting https://www.weclaim.com. We run due diligence of the proposed class action and fund it if the case is viable (strong legal merits and defendant creditworthiness). Once a claim is launched and funded, claimants have the opportunity to join online.

Weclaim’s Remuneration

Weclaim is working on a no win, no fee basis. If the claimant does not get paid, we don’t get paid either. Assuming a favorable outcome, we take a percentage of the damages awarded. We have the ambition to make justice as swift and efficient as possible across the globe.


The above is a guest post courtesy of Frédéric Pelouze, founder of Weclaim. Mr. Pelouze also co-founded Alter Litigation, the first French legal funding company.

Two Truths and a Lie, Legal Funding Edition

the law sign
For today’s blog post, I want to try something a little bit different. We’re going to play a game.

You might be familiar with this one – it’s called “Two Truths and a Lie”, commonly played as an ice-breaker event. You can think of this as your ice-breaker introduction to legal funding, if you’re still pretty unfamiliar with the concept.

Legal funding is such a new industry that it can be difficult to separate fact from fiction. Not only is the industry shy of celebrating it’s 20th birthday in the United States, but it’s already developed multiple sub-industries. Figuring out the the precise nature of legal funding as a whole – not to mention the details of each sub-category of legal finance – can be quite a tedious task.

It shouldn’t be too hard, so go on, give it a try! Which ones are true, and which one is false?

Legal Funding Isn’t For Everyone

“Legal Funding,” “Litigation Financing,” and “Lawsuit Loans” Are The Same

Traditional Loans Are More Intensive Than Legal Funding

Here’s a little humorous intermission to give you time to think it over, before I let you see the answers.

Alright. That should have been plenty of time. Are you ready to test your answers against mine?

Here goes.

Legal Funding Isn’t For Everyone. TRUE!

As much as I wish this one were false, it isn’t.

Legal funding is NOT for everyone.

If you’re a plaintiff who is seeking an attorney to try a case, legal funding likely isn’t for you. A legal finance firm will not fund a case before it has been accepted by an attorney or by the courts.

If you’re a defense attorney coming from a well-funded defense firm, legal funding is not for you. You already have the funds to litigate your case successfully, and have no need for extra assistance. You’d be wasting both your time and the time of the funding company if you applied for financing.

If you’re a plaintiff’s attorney seeking fee acceleration on a settlement that will pay out within a few days time, you likely won’t receive legal funding. You would be setting yourself for unnecessary repayments and paperwork if you applied for legal funding in this situation.

While there are a few other instances where you won’t qualify for legal funding, there are plenty of other cases where you will. From pre-settlement and post-settlement funding, to appeals and judgment funding, there are legal funding options for almost every situation.

“Legal Funding,” “Litigation Financing”, and “Lawsuit Loans” Are All The Same. FALSE!

Legal Funding and Litigation Financing can be used interchangeably, but Lawsuit Loans are a completely different thing.

The key word here is “loans”.

Legal funding, also known as litigation finance, is a process by which a legal funding firm purchases legal receivables from a plaintiff or an attorney. Such receivables include an attorney fee attached to a settlement (post-settlement funding) or anticipated proceeds from ongoing litigation (pre-settlement funding) — and then advances that purchase amount to the client. Then, at a later date, the client will repay this advance, along with a pre-determined amount of discount, from proceeds of the settlement or judgement.

In some cases, legal funding is non-recourse. This can occur when a settlement or fee does not get paid for unforeseen, non-preventable reasons. When this happens, the client does not return the advance to the funding company.

This is NOT how a loan works.

Loans are given out regardless of whether or not a future sum in the form of a settlement, a fee, or otherwise will be paid to the client. At an agreed upon future date, the client is expected to repay the loan along with a predetermined amount of interest. The cost to the client is the entire loan amount, along with the interest amount. The loan is considered a cost, because there is no guarantee that the client will have future earnings equal to or greater than the loan amount.

So the next time you hear someone saying that “legal funding” is the same thing as a “lawsuit loan”, you can put them in their place.

Traditional Loans Are More Intensive Than Legal Funding. TRUE!

While traditional loans may be less expensive than legal funding, they’re also more intensive for attorneys.

It’s true, for example, that a personal loan might have an interest rate between 6-8%. And it’s true that legal funding firms generally have higher rates, which vary depending on the type of funding being offered.

However, higher premiums aside, legal funding firms make life much easier for attorneys who often don’t qualify for traditional funding like bank lines of credit and personal loans. That’s because loan companies often want something that most plaintiff’s attorneys don’t have: physical collateral. The majority of the time, plaintiffs’ attorneys who apply for loans will be rejected because of insufficient collateral.

Contingency fee attorneys more often than not rent their office space and other accommodations that they need to run a successful practice, leaving them without physical collateral. Their most valuable assets are not physical objects, but thoughts and documents: their case portfolio and their law practice. Banks don’t accept these as collateral.

Legal funding firms, on the other hand, do.

Legal funding companies were developed specifically to take legal assets as collateral to help attorneys struggling with cash flow issues get back on their feet and reinvest in their own practices. The industry expanded to helping the clients of these attorneys, as well, and today offers multiple types of customized funding options to contingency fee attorneys and plaintiffs.

Did you win the game? Were you able to guess which facts were indeed facts, and which was a fib? Do you have any other funding fictions that you’d like to see turned upside down? Do you know any other fun legal cartoons I can read?

Let me know by leaving a comment!

Photo Credit: image by smlp.co.uk


Shayna Keyles has been keeping the world informed on the latest in law and litigation financing with RD Legal Funding, LLC since 2012. She offers writing and content marketing tips at her website, www.contentliaison.com, and tweets at @SKLiaison.

RD Legal Funding Makes Donation to Essex County Legal Aid Association

RD Legal Funding LogoThe below press release was distributed via PR Newswire on February 11th, 2015.

Cresskill, NJ – RD Legal Funding, LLC (“RD Legal”) recently made a donation to the Essex County Legal Aid Association, a 501(c)(3) nonprofit organization that provides free emergency legal services about civil matters to those who can’t afford it in the county.

Founded in 1906, the Essex County Legal Aid Association (“ECLAA”) last year helped 1,217 indigent clients from Newark, East Orange, Irvington and other county communities. Senior ECLAA attorney Ingrid Enriquez noted, “The majority of our clients seek and get our one-on-one help with landlord-tenant matters. We also help indigent people with consumer, family, individual rights, employment and income maintenance crises.”

ECLAA’s focus is providing immediate help with civil law emergencies. Ms. Enriquez noted, “If an ECLAA client needs representation after we handle the crisis, we will refer the client to relevant organizations.”

“Part of our mission at RD Legal Funding is supporting plaintiffs and attorneys, and ensuring that all parties can have fair access to justice,” said RD Legal President Joseph Genovesi. “Contributing to ECLAA, an organization that provides legal services to those in need, was a logical step.”

ECLAA business administrator Robert Adler said, “ECLAA is funded solely by donations and grants. This first-time support from RD Legal Funding helps us to assure that our staff attorneys can provide face-to-face legal advice to income-eligible clients. ECLAA is a small and effective nonprofit organization that has earned the Gold-Level Exchange Seal from Guidestar (www.guidestar.org) for being ‘transparent and proactive in providing information and documents to help donors and funders make their giving decisions.'”

ECLAA’s office in the Hall of Records building (Room 118, 465 Dr. Martin Luther King, Jr. Boulevard in Newark) is open from 9:30 a.m. to 3:30 p.m. Monday through Thursday. To learn more about ECLAA, visit their website (www.eclaanj.org).

RD Legal is committed to ensuring justice is available to all parties. Founded in 1998 by former litigator Roni Dersovitz, RD Legal offers cash flow solutions to plaintiffs’ attorneys and their clients with its unique post-settlement financing options.

To learn more about RD Legal and its unique post-settlement funding solutions, contact Joseph Genovesi at 201-568-9007, ext. 140 or visit http://www.legalfunding.com.

A Comment to Critics of the Legal Lending Industry

financing spelled with Scrabble letters
The website LawsuitLendingTruth.com is part of the tort reform network that has taken aim at the legal funding industry. The legal finance space is one that threatens the backers of the tort reform movement, which are mostly corporations and big business advocates who stand to lose if plaintiffs can access funds to pursue or continue to pursue lawsuits against them.

The website discusses the range of interest rates some types of legal lending can carry as well as the industry’s lack of traditional oversight. However, they do not cite the extremely limited financial options many plaintiff recipients of legal funding have. Many are on their last leg financially and may face taking these funds or bankruptcy (this is in reference to plaintiff pre-settlement funding).

Also, the same tort reform backers and legal lending critics do not hold the corporations and other big businesses accountable. They often push plaintiffs to the brink by not paying them what they are entitled too or playing tough in court to prevent them from getting an adequate settlement for the injuries they have suffered. Legal funding can be an important resource when plaintiffs have no other financial options and they need money to pay for their living expenses.

Traditional lenders like banks and credit unions do not lend money against the anticipated proceeds of litigation. The defendants in most consumer lawsuits are usually big businesses that use the dire circumstances many plaintiffs find themselves in to their advantage. They will usually offer plaintiffs a low ball settlement, expecting them to take it. Pre-settlement lawsuit funding offers them the opportunity to keep fighting for a settlement they deserve.

In addition, the legal lending industry is huge and there are quite a few different types of funding. Pre-settlement financing, which is referenced above, is the most common type of consumer legal funding. Post-settlement advances are an option when a settlement is reached but there is a delay in payout of the legal fee or award.

The cost of funding generally varies based on the amount of risk the funding company must incur. Most pre-settlement advances are non-recourse transactions, meaning that the plaintiff is not obligated to pay back the funding company if the litigation results in an unfavorable outcome. So compared to post-settlement funding, where there is a settlement agreement in place, pre-settlement funding is much riskier from the funding company’s point of view, and therefore pre-settlement rates are significantly higher.

Photo Credit: Lending Memo


 

Written by Lulaine Compere

Pfizer Agrees to $400 Million Settlement to Prevent Shareholder Class Action

blue brain
Pharmaceutical giant Pfizer recently agreed to pay $400 million to settle claims that it illegally marketed drugs for off-label usages. Investors claim that because Pfizer offered misleading information, stock prices were inflated and a large investor class was led to act against its best interests.

In 2010, shareholders filed suit against Pfizer marketing some of its drugs for their off-label uses. These drugs included Bextra, a painkiller that was later pulled from the market, and Lyrica, which is used to treat epilepsy.

It should be noted that while doctors are permitted to tell patients about off-label drug uses and even prescribe drugs for their off-label uses, it is illegal for pharmaceutical companies to market any off-label benefits.

In addition to the illegal marketing practices, Pfizer was accused of misleading investors about whether or not any illegal activities had been performed. The company allegedly misled investors about its own practices, and about ongoing government investigations into those illegal practices.

Pfizer offered a $2.3 billion settlement for the 2010 lawsuit. This settlement was disclosed to investors at the same time that news was breaking about Pfizer’s purchase of Wyeth; investors allege that the disclosure was overshadowed and was not given proper attention, thus misleading the investors and resulting in poor investors.

Pfizer spokeswoman Christine Regan Lindenbloom maintained that Pfizer admitted no fault in this lawsuit.

“Pfizer continues to believe that the company’s disclosures at issue in this matter were appropriate and prepared in good faith,” and the company offers this settlement in order to “avoid the distraction of continued litigation and focus on the needs of patients and physicians.”

Since the 2010 lawsuit, the FDA has been looking into developing guidelines on how pharmaceutical companies should deal with unsolicited requests from doctors to market drugs off-label.

Photo Credit: digitalbob8



Shayna Keyles has been keeping the world informed on the latest in law and litigation financing with RD Legal Funding, LLC since 2012. She offers writing and content marketing tips at her website,
www.contentliaison.com, and tweets at twitter.com/skliaison.

Corporate Review Interviews RD Legal Funding President Joseph Genovesi on Award Winning Series

RD Legal Funding LogoFebruary 4, 2015 Boca Raton, FL — An award-winning TV show focusing on the best and brightest leaders in the business world has turned its eye toward an innovative legal funding firm. A new episode of Corporate Review spotlights Joseph Genovesi, President of RD Legal Funding. The firm is dedicated to helping smaller law firms survive the ups and downs of contingency-based representation.

On February 7, 2015 at 5:30 pm EST, the segment will air on Bloomberg Television (as pd. prog). On February 8, 2015 at 11:30 am EST, the segment will air on the Fox Business Network (as pd. prog). Please check your local listings for airtimes (click here for Fox and click here for Bloomberg).

During his studio interview, Mr. Genovesi discusses the very real cash flow struggles faced by attorneys and legal teams that take their fees on contingency. RD Legal Funding specializes in post-settlement attorney cash flow issues, because many of the financial bottlenecks occur due to delays in settlement payments. Until the plaintiff receives the settlement award, the law firm can do nothing to collect its fee, causing many smaller legal enterprises to be strapped for funds.

Mr. Genovesi explains how delays in settlement payment can occur for a variety of reasons, such as the involvement of a minor in the case, Medicaid or Medicare liens, class action suits, and other complicating factors. This means that settlements may pay off in a completely unpredictable manner, creating nightmarish cash flow problems for contingency attorneys.

RD Legal Funding was founded in 1998 to help solve this serious problem. Once the settlement award has been confirmed, the company steps in to accelerate disbursement of fees to the attorney in the event of a delay. This allows the attorney’s cash flow to continue without major interruptions.

“We’re excited about profiling RD Legal Funding,” says Corporate Review’s Vice President of Programming, J.L. Haber. “Their service makes a huge difference for legal firms struggling with delays in contingency fees.”

About Corporate Review

Corporate Review is an award winning business and health program that is independently produced by MMP (USA), Inc. The show provides its viewers an in depth opportunity to find solutions to the industry problems from some of the top business leaders from across the world. With more than 5,000 companies participating on over 500 shows, Corporate Review continues to be the premier and targeted outlet for the latest business and health stories. Corporate Review airs on cable networks to over 100 million potential television households.

For specific market-by-market air dates and times, please contact Monique Healing at 256-840-3020 or Moniqueh@mmpusa.com. For more information, please visit www.corporatereview.tv.

What If These Women Had Tried Legal Funding?

medical instruments
Many women who opted for breast enhancement surgery in the 1970s and 1980s found themselves as victims of fraud, deceit, and physical agony. Dow Corning, global supplier of silicone products, had been distributing silicone breast implants to plastic surgeons without warning patients of potential physical danger.

What’s more, when Dow Chemical, partial owner of Dow Corning, was taken to trial in a multi-district litigation (MDL), the New Orleans jury discovered that the company had also failed to properly test the silicone to see how it would react in the human body. So not only was the product not properly tested, but the distributer was lying about the potential damages that silicone implants could cause.

Hundreds of thousands of women received silicone implants before Dow Corning stopped offering the product in the early 1990s. Over 20,000 of those women filed suit against the company because of complications including infection, loss of sensation around the implant area, buildup of scar tissue, muscle weakness, and other signs of connective tissue disease.

Dow Corning couldn’t handle the pressure from the mess it had created. In 1995, the company filed Chapter 11 Bankruptcy, and essentially stopped all litigation. All payouts were halted for 9 years; settlement guidelines were re-established in 2004. Only now are claims being processed, and some claims are still being filed.

This means that some women have been waiting for their settlement payouts since the early 1990s.

This means that some attorneys have been waiting for their fees for that long, as well.

This is the type of case where legal funding could make life better.

Imagine trying to get something fixed, only to wind up with even more problems. You went in to get your broken arm splinted and left the hospital with two black eyes, and now you have to wait months to take care of both your arm and your eyes. Or you went to change your flat tire and the floor of the mechanic’s shop is covered in nails, so now you have three ruined tires plus the flat you started with.

Or you’re a woman who simply wanted to receive breast augmentation surgery in the 1970s or 1980s, but wound up with infections, scarring, and pain, along with countless medical fees and a settlement that keeps stalling.

Or imagine you’re her attorney, who has been waiting for over a decade to get paid for hours, weeks, months of hard work.

As frustrating as this situation sounds, it isn’t completely hopeless.

The woman and her attorney both have the option of post-settlement legal funding to alleviate the stress of waiting.

Post-settlement legal finance allows plaintiffs or attorneys to take out an advance on the payment that they are due to receive. This is different from a loan – it simply means that some of the money that will be awarded in the future, either in the form of an award (for the plaintiff) or a fee (for the attorney) will be given out in advance. Check out this post to learn a bit more about legal funding.

What could this mean for the Dow Corning plaintiff and her attorney?

For the plaintiff, it could ease any financial troubles that accumulated during the waiting period. Because she first filed a claim due to medical issues, the settlement advance may help her pay any medical debts that accumulated. The advance would of course also help with any other daily expenses.

For the attorney, the advance could help foster a successful business. Plaintiffs’ attorneys can experience cash flow problems now and again, especially when their fees are subject to long delays. A payment advance such as this one could allow an attorney to reinvest into his or her practice, and maybe take on another potentially lucrative case.

In a case like Dow Corning, legal funding can make a huge difference for both plaintiffs and attorneys. Legal funding can be the difference between waiting, and thriving!

Learn more about why legal funding is a solution to settlement payout delays!

Image Credit: Rudolf Vlček


Written by Lulaine Compere, analyst at RD Legal Funding and Shayna Keyles, consultant at The Content Liaison.

How Maine Became a Pioneer for Legal Funding

colorful trees along a Maine river
Many people don’t know more about the great state of Maine than “it borders South-Eastern Canada,” and that’s quite a shame. There are plenty of interesting facts about Maine:

  • In 1820, Maine became the 23rd American State
  • Maine is home to over 6,000 ponds and lakes and 17 million acres of forest.
  • When you count tidal areas, Maine’s coastline is 3,500 miles long — that’s greater than the distance from New Jersey to California!
  • At last census, Maine’s population was 1,330,000. Imagine sending the entire population of New York City into a beautifully wooded area and asking them to chill out a little, and you’ve got Maine.
  • Maine is a pioneer of sorts for the burgeoning legal funding industry.

Ok, that last one may be less about Maine and more about legal funding, but Maine truly is playing an important role in changing the face of legal finance.

State legislatures in the United States have long been wary about legal funding, specifically about whether or not it can be considered ethical and whether its practitioners offer enough transparency to the consumer. The State of Maine is one of the few to have taken direct action to address this complaint.

The Maine State Legislature passed Statute 9-A, Article 12 to address legal funding practices and, more specifically, to set guidelines for all legal funding contracts. For example, the statute declares that all contracts must clearly indicate, on the front page of the contract, how much the consumer will owe the company at any point in time. It also has a list of mandatory disclosures that must be included in plain sight.

Maine’s Contract Statute not only promises transparency, but promises a user-friendly aspect to legal funding. This ensures that both parties know what to expect when a legal funding transaction takes place, and is intended to prevent any issue consumers may have with rate or fee transparency.

Unlike Maine, several other state legislatures have passed legislation looking to curb the industry rather than to regulate it. The amount of lawsuits waged against legal funding companies has resulted in the formation of the American Legal Finance Association (ALFA) to create guidelines, establish ethical standards, and ensure fair business practices within the industry.

ALFA is just a start when it comes to regulating legal funding. More states need to act like Maine has, and take initiative to ensure consumer transparency. Illinois and Tennessee seem to be moving in a similar direction, but so far Maine is the only state to have made the bold move to issue a statute on legal funding fairness.

The next time someone asks you for an interesting fact about Maine, you can tell them about how Maine is a legal funding pioneer!

Photo Credit: Werner Kunz


Written by Lulaine Compere