I recently took a course in funding commercial litigation. The funding of litigation cases is as much of a finance issue as it is an ethical consideration. This is because funding normally happens prior to the disposition of a case. However, at the time of funding the status of the case at disposition is an unknown. Therefore, it becomes an ethical issue regarding how much to have funded, how much of that funding to spend prior to disposition in order to run the firm, and whether to use the single case method, portfolio method, or corporate method to determine funding amounts. The good news is that analytics allows a predictive platform for generating a more accurate estimate of how much the case will settle for, the cost to settle, and how much could be immediately paid back to the funding company upon disposition. Analytics can even predict an average time it will take from the initial intake of a case to the final disposition.
This last predictive inference is an easy metric but could be complicated to achieve. What it entails is the ability to enlist good tracking software into working mode at the law firm. It also requires that employees be well trained in how to use case tracking software. Further, the software needs to be coded accurately with the right kind of time sequence to properly chart full case timelines. This means being able to predict the time from intake to disposition for a case that settles prior to litigation as well as for a case that settles after reaching litigation. Further, to track litigation cases that dispose before a court hearing verses after trial, and how many go from trial to appeals, including that timeline. Also, the tracking of how long it takes from the time a case settles to the time that the law firm can recover expenses and cut the settlement check to the client. Each step in the process needs an individual timeline, plus there needs to be an overall timeline that tracks the entire processing of the case; i.e. how long for this step verses how that for the entire case, what portion of the entire case active time does this step take in the process. This will help predict the beginning to end statistic based on the case type, which will be discussed below. The tracking software used should be able to decipher case types by area of law, typical opponent company or type, features of the individual case, such as injury type, impact level, length of marriage, proper history, e.t.c, and amount of assets or insurances involved. There are many sub factors that can be tracked as a coding inference or as an extra effort during data extraction, but this blog is only spaced to suggest main points. The individual features, focal opponents, and case type should be cross referenced with time to disposition, as well as case status at disposition to accurately predict the timeline for each case. Accurate cross comparison will help to more accurately predict hours the case will settle and can be cross compared to the case status of pre-lit, lit, meditation, trial or appeals, etc. These features can also be cross compared to assets/ insurance amounts accrued prior to starting a case to more accurately predict settlement amounts. Remember this will be a full assessment of previous case type, features, timelines, and assets against previous settlement amounts. Usually being able to produce a chart of historical case statistics after generating a confidentiality agreement will help the funding company determine the true merit of case predictions. Once predictions are complete and accurate, there are two other steps that could increase the ability to fund - benchmarking and continuous improvement if processes. Benchmarking entails a look at the regular time span per case type for the entire market that the law firm works in. This could be a comparison of the immediate region or it could span to state courts, federal courts, or a cross comparison of multiple regions. The most basic benchmarking study entails time from filling to disposition with settled pretrial, during trial, or within a higher court. However, there are ways to drive data about individual case features, opposing party of specifics, settlement amounts, and client demographics. I have heard of comparing legal practice tactics with opposing party practices to decipher what characteristics make an opposing party more likely to settle out of court. Also, predictions can be skewed based upon the opposing counsel statistics. Once benchmarking displays a vulnerability, law forms can use analytics to find new practices within their organization to strengthen the weakness. Displaying evidence of these two tasks will increase the freechances of getting approved for funding, and at greater amounts.
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During my youth and teenage years I was able to move into the home of my older sister, who lived with guardians due to her special needs, my parents busy schedule, and enabling her to overcome her disabilities for a promising future. My Aunt, who was my sister's guardian, attended a lot of advocacy groups related to Connie's special needs. I always had the option of sitting home working on art hobbies, practicing dance, creating wonderful mass production poetry, watching TV, doing homework, OR not sitting at home and attending the meetings with her. I chose the meetings. It was fun learning about the issues with these special needs individuals and working my spatial magic to dream up solutions for them, and getting involved with the legislation/advocacy aspect.
One thing these groups always brought up was the parent excuse syndrome. Many think this syndrome is excuse not to take care of the child victim of special needs. This is usually not the case. The syndrome regards everything else in life besides the child, and an extra level of protection encasing the child. The parents use the need to care for the child to let go of everything else in their lives, and they do this while controlling every aspect of the child's life. It's as if attempting to turn the child into a robot where the parent becomes the remote control. Essentially, this is denial of the child's situation. It is also detrimental to the child learning self advocacy; a skill that is common among special needs children that go on to college, graduate, and live a successful post college life. In doing some research into the topic, and speaking to a friend who is an expert in the education arena after working so many years in the field, and consulting with my own sister who took the special education route in college with a master in it, moving on to attempt a Ph.D. in art therapy, which she realizes as a method for teaching self advocacy and self expression, until her cancer got her from years of meds and environmental exposure to natural gas butane, I quickly learned that self advocacy is a key skills, and interaction with expressive capabilities is the way to build that skill. My friend in the field for years helped me develop an activity that adheres to all levels in the attached pdf explaining how special needs children develop. Social Inclusion PDF To teach and reinforce self advocacy with initiating skills. Bring him or her to a club meeting, political party meeting, office party, office grand opening, MSABC meeting, something with a lot of people attending.
Social Inclusion pdf How to Advance a Law Firm from Contingency Pricing to a Flat Fee Structure
Many law firms work under a contingency fee, meaning that clients pay at the end of the case based on either an hourly rate, or a percentage of the settlement price. While there are a few benefits to this -> Lawyers are more likely to want higher settlements so that the attorney fee will be higher for the firm, there are a lot more benefits to the clients if the fee structure is set as a Flat Fee. This is because the fees are more predictable, allowing customers to imagine a budget for them, and it allows the firm to create a pricing sheet that potential new clients can look through to decide what services they are looking for from the firm. There is a large set-back to switching from contingency fees to flat fees. First, the firm will need to be on top of which of services they provide usually are not flexible, the regular costs of handling a case for a client, and to be able to understand the flow of the budget from year to year in order to set prices that will benefit rather than harm the firm. The good news is that there are several ways this can be accomplished. The first thing that will need to be accomplished is to split the different tasks normally included in a package, and split it into separate, billable tasks. For instance, the law firm can split court events into each separate event for pricing per event. Various legal drafts can be split by the regular time it takes to complete the draft from the research aspect to the final version, then generate a price based on the “warehouse price” which is the cost of the draft (billable hours and any resources used, such as a portion of the legal research site fee, or a portion of the software fee, the materials used to print any documents not remaining in electronic portion, etc) plus 1 – the decimal point value of the percentage the firm would like to make above the cost of the draft times the cost. There is also the power of attorney form, and any notary services. Any and all services that can be individualized somehow, should be. Many times, a firm is not sure how much they will want to make above the warehouse price. This is fine. The firm will need to delve into their financial data over the last 3-5 years to find a consistent pattern in case types, as well as services offered per case. Hopefully a firm will have some sort of financial tracking service in place, such as Quickbooks or any other money management software, and they can track settlements and fees derives from the settlements. They can also track expenses running into the trust accounts to find out client costs. Many times, these costs can be categorized to derive further services for individualization. Further, firms can delve into operating expenses and categorized these to find trends and case percentages that will allow the firm to add a percentage to a base price to discover its overall warehouse cost. To be completely accurate, one could also track billable hours per case and per case task to derive a billable hour quotient to each task given a flat fee. Once clear patterns are derived from the financial information, price calculations can be established. Once all fees are established, the firm can create a price sheet, giving them the option to generate a scope for each case. The law firm who is switching their services from contingency to flat fee will generate a price list and then affix it to a storefront on their website. Many firms will allow clients to go through this list to drop services into a cart. An advantage to this is that the firm can begin to create templates, checklists, and packages that clients can use if they prefer to go pro-bono instead of full on legal handling of their case. Law firms can still benefit by aiding those pro-bono clients will a very minimally priced guideline for handling their own case. Further, this is where the firm will add auxiliary services pricing and change pricing when the client beginning the lawyering of their case and decides to add a service, or otherwise make a change to the original scope/package. Finally, the firm can still offer the contingency structure for clients who prefer it. In order to include those services on a more predictable basis for clients, they will need to add an interactive scale, or some may use a calculator. For this, find the most likely settlement amounts to a case, then allow the clients to use a slider to navigate to their expected settlement amount where the fee will display (if there’s a pre-lit / lit pricing difference, they can both be listed and labeled as is). For the calculator version, the website will ask the potential settlement amount then do calculations to display the fee amount(s) once inputted. Make sure that clients are aware of what is not included and provide a list of extra services with their charges when the client signs up for either fee structure. This will make the process more predictable, and may increase the number of clients willing to sign on with the firm. |
AuthorDr. Bonnie enjoys publishing poetry, fiction, social media and non-fiction. She has created numerous technical documents and research dissertations. Bonnie has also assisted in the writing of movie scripts that have gone into production. ArchivesCategories |