Fee Acceleration leads to $20 million in new profit opportunities
This client originally came to us because its bank credit line of $100,000 was insufficient to support its case development costs and expansion plans. The firm's bank dealt with trial lawyers only through its executive/professional department, and therefore would provide loans based solely on our client's personal financial strength.
The client wanted additional funding to diversify the practice from motor vehicle accident claims into larger, more complex litigation, with a focus on cases involving the diet drug fenfluramine, one half of the Fen-Phen arena. We provided a credit line of $650,000, $500,000 of which was used for advertising. Within a few months, this dramatically increased the firm's caseload from approximately 1,800 to 2,600, including 500 new diet drug cases.
Reinvesting in advertising
While, ultimately, financial results from the diet drug litigation were disappointing, the Fen-Phen national settlement agreement allowed our client to obtain financing through our Fee Acceleration program. This was reinvested in advertising for claims related to damage from the drug Zyprexa, used to treat types of schizophrenia and bipolar disorder.
The Zyprexa cases turned out to be extremely successful, generating fees in excess of $6 million. However, the firm would not be able to receive these funds for approximately one year. This put the firm in a cash shortfall position. Rather than wait, the client once again accessed the Fee Acceleration program. We advanced the $6 million, which the firm immediately reinvested into advertising to generate more Zyprexa cases.
The bottom line:
Though the law firm was effectively out of investible cash, it was still able to bring in new cases through Fee Acceleration financing. The result was an additional $12 million in fees. Continuing with this strategy, the firm has built a large inventory of cases related to other prescription drug product liability claims. In total, our client has recognized at least $20 million in fees that would have been unavailable without the financial power of our Fee Acceleration product.