Why Should I Recommend Pre-Settlement Funding to My Clients?
Lawyers are oftentimes advised to recommend pre-settlement funding to their clients. It’s a simple move, and one that could potentially help clients – but why is it so beneficial for lawyers? And what’s the best way to approach this recommendation?
What Is Pre-Settlement Funding?
First, let’s cover the basics of pre-settlement funding. As the name suggests, this type of funding is available to plaintiffs before they receive a settlement. While waiting for a case to settle, plaintiffs are often in a financial predicament; they have significant medical bills piling up, they're out of work, and they're facing everyday expenses as well. Pre-settlement funding gives them immediate cash, which they can use however they want.
Later, when the settlement arrives, the plaintiff is responsible for paying back whatever they borrowed, plus something extra – usually a small, fixed fee or ongoing fees based on an interest rate. These loans are typically non-recourse, meaning your clients are only going to have to pay back the loan if they actually receive a settlement; if they don't receive a settlement, they'll owe nothing.
The Benefits of Recommending Pre-Settlement Funding to Clients
So what are the benefits of recommending this type of financial product to your clients?
- Immediate financial assistance. The first benefit is perhaps the most obvious. Your clients are going through at least some financial hardship, whether they're completely out of work or are simply dealing with medical bills. Getting several thousand dollars to mitigate those expenses and live a normal life can be a massive relief for your clients. Otherwise, they may be forced to struggle unnecessarily, worrying about whether their settlement is going to be enough to cover everything they need.
- Sympathy, care, and client bonding. Recommending this type of funding is also a way to demonstrate that you truly care about your clients. You're demonstrating sympathy by showing that you understand their financial hardship, and you're demonstrating passion for your clients by going out of your way to help them. It's the perfect way to strengthen the bonds you have with your clients and create much better long-term relationships with them.
- Better reviews and testimonials. As a result, clients who receive pre-settlement funding as recommended by their lawyers are much more likely to leave better reviews and testimonials. It's true that you didn't have a direct role in providing them with the funding, but they're still going to associate it with you and your law firm. Over time, these better reviews and testimonials are going to make your law firm more visible and help it earn a better reputation, ultimately helping you earn more clients in the future.
- Client focus and cooperation. Some clients are difficult to work with because they are so stressed, distracted, or anxious about the case that they can't focus on the details of it. Providing these clients with pre-settlement funding could instantly solve one of their biggest problems: how to make ends meet while waiting for the settlement. With this problem out of the way, clients will be much more likely to focus and cooperate with you in your ongoing discussions.
- Client confidence. Additionally, clients are going to feel more confident about you and your services once they have some settlement funding in hand. Pre-settlement funding providers only provide cash advances to cases they feel have a strong chance of winning a significant settlement. If the case didn't have a chance, the advance wouldn't be approved. Think of it as a third-party acknowledgement that validates your client’s choices.
- Networking and relationship building. Networking and relationship building are critically important for lawyers, and working with a pre-settlement funding provider is a great way to expand that network. Not only are you going to build better relationships with your funding providers and your clients, but you'll also get more opportunities for referrals.
What to Look For in Your Pre-Settlement Funding Partners
Of course, not all pre-settlement funding providers are the same. If you want to see the best results, you'll want to work with the best possible legal funding partner.
Pay attention to the following, at minimum, during your search.
- Fees and rates. What types of fees or interest rate is this company charging? Ideally, you'll work with a company that's charging a fixed fee, rather than interest that compounds over time.
- History and experience. You'll also want to know more about the history and experience of the people working at this company. How many customers have they served in the past? Have they worked with any of your clients? Are there reviews and testimonials supporting them?
- The application process. What is the application process like? Will your clients have an easy time filling out the initial application and getting approved for the loan? Assuming they're approved, how quickly will they be able to get the money?
- Communication and reliability. Only work with a partner that you genuinely trust. Make sure this company is able to communicate reliably and effectively with both you and your clients. That means you’ll need to spend some time talking with the business, and getting to know your contacts within it, before recommending it to other people.
Discussing Pre-Settlement Funding with Clients
All that's left at this point is to figure out how to introduce the subject to your clients. Not all of your clients are going to want pre-settlement funding, nor are all of them going to be good candidates. It's your responsibility to talk to your clients regularly, get to know them on a personal level, and recommend this type of funding whenever it seems appropriate.
Are you looking for a pre-settlement funding partner to recommend to your clients? Capital Now Funding has everything you’re looking for. Contact us today to learn more about how we do business, or help your clients apply for a pre-settlement loan today!