As most of you know, I report on new and cool services relating to the legal industry. I had the opportunity to talk to the folks at LawLeaf on Friday. LawLeaf is an online legal funding service that matches people looking for pre-settlement cash advances, structured settlement annuity advances, commercial litigation funding and law firm loans. Based upon my conversation, LawLeaf does not provide the cash advances rather they match you with their “network” of lenders.
What does this mean to you? According to them, most people that apply for legal funding will search several companies before applying to only one. There are some people that do apply to multiple companies but usually this happens after the first company denies their request. With LawLeaf, you apply once and they will send your application to several different lenders increasing the chances of an approval. LawLeaf also said that many times the rates and payouts for each company are different so it makes sense to shop around rates and payouts for a cash advance. Their value proposition is that their lenders are ready to compete for your business.
I’m not too familiar with legal funding but apparently its a huge business. While legal funding is not for everyone, it oftentimes may help if you’re in financial distress and can’t wait for your personal injury case to settle. I guess the way the economy has been of late, legal funding is certainly an option to consider for some people.
For me, I hope that I’ll never need to use legal funding as an option. The rates for most legal funding loans are typically a little higher than the standard loan. The reason is that most companies provide what they call “non-recourse funding” meaning you don’t have to pay them back if you don’t get a settlement. Very much like a personal injury attorney, you don’t pay unless you get compensation.
In closing I really like the idea that you can submit once and your information is sent out to several companies that are willing to compete for your business. It also behooves you to seek funding from several lenders so you can shop for the best rates. With LawLeaf they will evaluate your case and send your case to selected lawsuit funding companies. Those lenders will take it from there and get the necessary information from your attorney to determine the amount of money they will loan (if approved) and the rate you will have to pay back if you get a cash settlement from the lawsuit.