Does your Department’s financial strength lie in assets that aren’t recognised by traditional lenders? Are you failing to attract the funding support you need to grow? You’re not alone! Matthew Gwynne, SpectraLegal Finance, reports.
A common problem in the litigation market today is that the assets of a personal injury and clinical negligence firm or department are intangible and not recognised by traditional lenders. For instance: if you made widgets instead of settlements then you would always have something tangible for the banks to take back and sell if things got tough.
All the value in a PI firm lies in the Work in Progress (WIP). Your case management system will provide you and the Bank with information on WIP but unfortunately, experience tells us that firms are sometimes not great at recording the value of their work.
We’re sure you’ve heard this before but, firm-to-firm, you’ll find variances on valuation techniques and outcome which is why the banks are nervous about lending on something they can’t see or touch. In our conversations with professionals and due to our knowledge about where traditional lenders are looking to secure their own growth, we know that bank funding is getting harder to obtain and that a firms WIP valuation may be deemed as unreliable.
The result is clear: if you struggle to get funding, you can’t grow.
A different approach results in growth
At SpectraLegal Finance we do things differently. We use innovative methods to value and lend against a law firm’s WIP and disbursements, thereby releasing funds tied up in assets that are assigned little to no value by traditional lenders.
Our facility supplements conventional bank financing to provide flexible, long-term working capital for you to help you grow, not just survive.
How do we measure value?
We measure and analyse the WIP using a consultant’s tool that we use to derive the value that we lend against.
We extract data from your system (minus any client information to avoid confidentiality issues) and:
- Analyse the historical performance
- Apply the historical performance to the live caseload (resulting in a more realistic overview of what’s happening with the WIP and its true value)
- Monitor on a monthly basis.
By monitoring monthly, we are able to provide management teams with access to additional streams of management information which can include how your caseload is fairing, how the success rate looks and how the fee earners are doing and if they have too many / too little files to manage.
We can also see where files have been left for in excess of 90 days, which files are turning stale and which files have impending time limitations.
Not only does this data provide you with a more realistic account of WIP value and allow you to grow, it also helps you to be more efficient and support and nurture talent in line with the business.
The data we produce gives you a realistic view of what your WIP and disbursements are worth and how you can then monetise that WIP by taking on tailored finance solutions to help you buy more cases, invest in marketing or invest in internal processes.
We understand that some firms are not capturing or recording data correctly but we can help here too.
For more information on our WIP and Disbursement funding products please click here. To speak to us or book a no-obligation meeting today, please drop Matthew Gwynne line via: firstname.lastname@example.org