Finance 

The ROI of Financing Case Acquisition for Plaintiffs Law Firms

Ari Kornhaber

Ari Kornhaber

EVP & Head of Corporate Development at Esquire Bank

Reza Torkzadeh

Founder and CEO of TorkLaw

In this blog, we discuss the ROI of financing case acquisition for plaintiffs law firms, featuring insights from bestselling author, Reza Torkzadeh, founder and CEO of TorkLaw.

Managing the Unpredictability of of Cash Flow for Contingency Fee Law Firms

The contingency fee business is a high risk, high reward business with a lot of volatility. For example, you can spend $1,500 acquiring a case that nets $5,000 in fees one day and the next acquire a case for $1,500 that nets $5MM in fees. This unpredictability can hamper a firm’s ability to grow its business as it waits for large cash injections to invest in growth.

Law firm owners view the practice of reinvesting case fees back into the firm as driving growth. If the firm is lucky enough to enjoy a consistent injection of case fees, this can drive steady, incremental growth. However, the exponential growth that can take a law firm from being a big fish in a small pond to the biggest fish in the biggest ocean usually takes an outsized injection of capital. This capital often comes in the form of financing.

Many law firm owners are hesitant to take on financing for growth, wary of the cost of interest and the uncertainty of attaining an adequate ROI. This is short-sighted. If your contingency fee law firm consistently manages to litigate cases to their full value and bring in case fees, you can confidently scale your practice and optimize its potential through financing.

Harnessing the Benefits of Financing Case Costs

One of the most cost-effective ways to grow through financing is a Case Cost Line of Credit. When financing case costs, many states allow for the cost of financing to be passed onto the client. Please check your state’s ethics opinion regarding this practice. Additionally, with Esquire Bank, financing case costs is a highly adaptable and customizable option. You can easily choose to finance all case costs of all your cases or just the costs for specific cases. Additionally, the decision to pass on the cost of financing is up to you. Once you’ve financed your case disbursements, you can use the cash you’ve just freed up to invest in growing your firm.

In addition to Case Cost Financing, there’s also a Working Capital Line of Credit. This type of financing can be used to make big purchases such as a high-value domain name, top talent hires, or large marketing campaigns. Working with a financial institution that’s FDIC insured such as Esquire Bank will not only give you the peace of mind that you have a trustworthy banking partner, but it also means that you will get competitive financing rates. Financing for growth is increasingly become common practice in the contingency fee industry, and many of today’s top firms credit this practice for their success today.

Watch the video above featuring insights from Reza Torkzadeh, founder and CEO of TorkLaw, as he explains the importance of financing case acquisition and how he has doubled his firm’s case inventory year-on-year, increased revenues by 80%, and tripled his staff by partnering with Esquire Bank.

Meet with Esquire Bank

Has your law firm’s growth plateaued? Learn how your law firm can finance its case costs and free up capital to invest in marketing, technology, talent, operations, case acquisition, and growth.

Speak with an Esquire Bank Business Development Officer today.  Book a consultation at a time convenient to your schedule.

Special Offer

And, as a Thank You, we’ll provide you with a complimentary copy of Reza Torkzadeh’s bestselling book ‘The Lawyer as CEO’. Reza Torkzadeh is the founder and CEO of TorkLaw, an Irvine, California-based, personal injury law firm.

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* The information provided on (or accessed through) this blog is provided for general informational purposes only and is not intended as, and should not be relied on for, law firm operations, tax, legal or accounting advice. Some of the information may not be applicable or appropriate for all law firms. Please consult your own tax, legal and accounting advisors as appropriate. Results may vary by law firm.

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  • Life Cycle Stage: Educated - Best Practices
  • Content Tier: platinum
  • Content Type: video

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