How Pre-Settlement Funding Can Help Your Law Firm Grow
If you’ve recently started a law firm and you’re interested in making more money, or if you just want the opportunity to serve more clients, you’ll always be on the lookout for marketing and growth strategies. While investing in marketing and advertising is always a smart idea for lawyers, you’ll also need to provide better service and more support to your clients – which could include recommending pre-settlement funding to your clients.
What Is Pre-Settlement Funding?
First, you need to understand how pre-settlement funding works. Pre-settlement funding goes by many names, including lawsuit funding, settlement loans or a settlement advance, but it all refers to a special type of loan offered to plaintiffs in personal injury cases.
If a plaintiff is in a position to win a settlement, they’ll typically have to wait many weeks before they see the money. Pre-settlement funding provides them with that money (or some of that money) immediately, pending application approval. When the actual settlement money is disbursed, the borrower will be required to pay back that principal plus fees. The great thing about pre-settlement funding is that it is non-recourse funding, meaning if you client doesn’t receive a settlement, they will owe nothing. Additionally, no loan payments are required until the case is settled, so no additional financial pressure is created for your clients.
How Pre-Settlement Funding Can Help Your Firm Grow
So how exactly does pre-settlement funding help your firm grow?
It’s all about client experience. When your clients have a better experience with your law firm and walk away feeling positive about their interactions, you’ll get:
- Better reviews. Happy clients will leave favorable reviews for your firm. A single 5-star review won’t be career-changing, but if you consistently get better reviews from all your clients, it will help your organization become more visible – and in higher demand.
- More personal referrals. Your most satisfied clients will also be likely to give you more personal referrals. They’ll recommend you to friends and family members who can send more business your way in the future.
- A better overall reputation. Though it might take some time, if all your clients walk away happy and talk about your law firm favorably, eventually, you’ll cultivate a better overall reputation. That will lead to more clients, more visibility, and the growth you’ve always wanted.
- Time. As you know very well, sometimes the biggest thing you need in order to get a larger settlement for your client is time. But if your client is in dire need of financial assistance, they may not have the luxury of waiting longer for a case to settle, and insurance companies know this. They want to drag out the process so your clients settle for a lower amount. Use pre-settlement funding as a way to keep your clients satisfied and give you and your firm more time to flip the script on the insurance company.
What is it, exactly, about pre-settlement funding that can give your clients a better experience?
- Immediate financial relief. Why do your clients hire you in the first place? They expect you will be able to get them compensation for the injuries they incurred. Why not offer them a way to get some financial relief upfront? The big value in pre-settlement funding is in its immediate financial relief. Your clients are likely struggling with daily living expenses, mounting medical bills, and limited to no income to pay for those expenses. It’s a stressful and challenging time for anyone – especially if they’re in the middle of an uncertain personal injury lawsuit. Getting an immediate injection of capital can provide them with a sense of security and relieve, reducing their stress and allowing them to focus on more important things.
- A sense of confidence. Pre-settlement funding providers only issue loans to people whose cases have a strong chance of winning; after all, if no settlement is won, a borrower won’t have to pay back what they accepted. Getting an approved application can give your client an early sense of confidence; they may feel more trust that they’re going to win the case and hold more confidence in your abilities as their lawyer. In turn, this can lead to a better working relationship.
- Trust and respect. Recommending a pre-settlement provider, and having a good experience with that provider, can help you establish more mutual trust and respect. You’ll build more rapport with your client, which you can then use to facilitate better, more open communication – and more teamwork when managing the case.
Recommending the Right Provider
Of course, all of the client experience benefits of recommending pre-settlement funding are going to be contingent on your ability to choose the right provider. Unfortunately, many pre-settlement lenders have questionable ethics, preying on easy targets with high interest rates and unreasonable terms and conditions.
Before giving a confident referral, you’ll need to review several aspects of the pre-settlement funding provider, including:
- Fees. What are the fees associated with this lender, and how are they charged? Interest rates are common, but they can be devastating to your clients’ finances; thanks to the power of compounding, it’s possible your clients will end up owing far, far more than they originally borrowed. Fixed fees are much more predictable – but they should be reasonable compared to the amount borrowed.
- Terms and conditions. What are the terms and conditions associated with the loan? If the client doesn’t win a settlement, will they still be required to pay back what they borrowed? With most providers, this won’t be an issue. How soon will your client be required to start paying the loan back? What other fine print is associated with the loan?
- Reliability. How reliable do you consider this funding provider to be? Are they consistent with the types of applications they approve? Do they always do their best to help borrowers get what they need? Pay close attention to reviews and testimonials from previous borrowers to get a sense for this company’s history.
- Application process. It’s also important to review the company’s application process. What steps will your clients need to go through before being approved for pre-settlement funding? Ideally, the application will be non-invasive, and should only take a few minutes to complete. The approval process shouldn’t take more than a few days – and hopefully, the funds will be disbursed within hours of the approval.
- Communication. Is it easy to communicate with this pre-settlement funding provider? This is going to be important both for you and your client. If there are any issues, it’s essential to be able to talk to someone and work them out.
It’s hard to choose a great provider when there are so many pre-settlement funding providers in existence. But at Capital Now Funding, we do everything we can to provide clients and attorneys with great experiences – and help lawyers grow their firms. Contact us for more information about our pre-settlement funding services and to learn how you can get started.