This is the second installment of our series of things to consider when your client seeks lawsuit funding. Yesterday, we explored the issue of financial need. Today, I would like to suggest best strategic use of legal finance programs. Thus, the question today is:
2. Is there potential for the legal funding to increase the value of the funded case?
Lawsuit financing should be used as a strategic tool. Financially distressed clients are not a positive influence on settlement negotiations. In most jurisdictions, legal ethics require that the attorney (the “employee”) take all settlement offers to his/her client (the “employer”). The attorney can make strong recommendations, even withdraw representation, but he cannot “order” his/her client to reject an offer. Thus, an offer made in a time of great financial stress (like a pending foreclosure situation) is likely to be accepted, or, at least, seriously considered, by a financially distressed client. If you found a way to relieve your client’s immediate financial burden, even for a few months, the client’s resolve the settle the case immediately and inexpensively are removed and you have purchased precious time necessary to complete negotiations and obtain improved, case-appropriate results. This writer has been involved in actual cases where six-figure and even seven-figure increases have resulted from strategic well-placed legal funding.
Our next post will explore whether lawsuit funding is a comfortable fit for the case being considered for funding. Stay tuned…