Overcoming the challenges of starting your own personal injury practice

Financial strategies for new practices and succession plans to support success in a competitive market

Overcoming the challenges of starting your own personal injury practice

This article was produced in partnership with BridgePoint FInancial

The landscape of personal injury law is constantly changing, prompting lawyers to explore alternative paths in pursuit of a successful legal practice. For many personal injury lawyers, breaking away from traditional opportunities in large organizations for a more autonomous and lucrative career in their own firm is very attractive. However, without the proper tools, the barriers to entry to get started in this business can be disproportionately high.

“The personal injury landscape is ever evolving. The market has become more competitive and complex, with new challenges as well as new opportunities for law firms operating in this space,” explains Tim Andrews, Chief Business Development Officer at BridgePoint Financial. In fact, the last ten years have seen a major shift in in both the rules and the cost of running a successful personal injury practice, meaning that firms are turning towards innovative and strategic solutions to stay competitive.

Legislation directly affecting personal injury cases, including the deductible on non-pecuniary damages which has increased over 7% the past year alone, has created new financial constraints for firms operating in this space. This is in addition to the medical and legal assessment report prices and litigation costs which continue to rise year over year.

Further, where referrals were once sufficient in keeping a personal injury firm afloat, expensive marketing campaigns now play an increasingly important role in achieving visibility amongst competitors and drawing in clients. “People are being forced to adapt,” Andrews says.

Unfortunately, there are no formal methods to educate lawyers on the practical aspects of running a law firm. And because of the contingency-based structure, those looking to get started in the personal injury space may face a unique set of challenges that require careful consideration and strategic planning in order to manage cash flow and account for overhead expenses.

In view of these new economic realities, a progressive generation of lawyers is developing that understands how to strategically use financial products, capitalizing on innovative tools to operate efficiently and effectively.  “Law firms now have the ability to leverage specialized legal financing solutions that can provide lawyers that work on contingency with the financial support and resources to start their own firm or take advantage of succession opportunities, and succeed in a highly competitive legal market,” explains Andrews.

BridgePoint Financial assists in tackling the biggest cost for personal injury lawyers: disbursements. With their Law Firm Funding products, BridgePoint offers financial solutions for law firms requiring access to working capital to tackle the cost of disbursements, considering each firm’s unique business model and needs.

Through File Funder, funding is provided on a file or invoice specific basis, with repayment 100% deferred until settlement, aligning perfectly with the law firm’s cash flow. As a result, lawyers can take on larger files without worrying about upfront costs. By not having to tie up their funds in disbursements, lawyers are able to reinvest law firm capital and bank credit into law firm growth and manage day-to-day expenses.

Additionally, personal injury lawyers can source expert reports through BridgePoint’s roster of over 500 experts across the country, using their Expert Access program. Through their proprietary expert search tool, lawyers can reduce the time and resources spent acquiring experts, while also seamlessly funding their reports with two years interest fee and repayment fully deferred until settlement. Without the need to advance funds to cover the cost of expert reports, law firms can access the necessary capital to steadily grow their business. Not to mention, with the convenience of their online portal, entrepreneurs that own their own practice can easily view their expenses in a centralized place, granting them greater visibility on their firm’s financial position.

While traditional ways of accessing capital remain, banks and other lenders often aren’t familiar with the specific challenges of personal injury law. They don’t provide the strategic freedom offered by BridgePoint Financial, who can look at the objectives of a particular practice and see how best to utilize their capital, whether that’s freeing up more money for marketing, investing in practice management software, or just taking home appropriate compensation.

Fundamentally, what new lawyers looking to open their own practice require is access to working capital at their fingertips to effectively build out their cases and support the growth of their firm. In leveraging BridgePoint’s legal finance solutions, new entrepreneurs competing in the personal injury space can have the peace of mind knowing that required financial tools are readily available for them to open and operate their new practice.

For more information on BridgePoint Financial’s Law Firm Funding solutions, or to schedule an information session, please visit here.

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