Here Are Some of the Top Reasons Attorneys Need Post Settlement Funding
Reasons Attorneys Might Need Post-Settlement Funding – Attorneys work tirelessly to negotiate settlements on behalf of their clients, but their fees are often delayed for a litany of reasons.
Resolving liens, obtaining judge approvals, or receiving settlement checks can delay receipt of attorney’s fees for months.
Post-settlement funding for attorneys allows lawyers to receive part of their contingency fees in advance.
Here are some common reasons attorneys request post-settlement funding from Balanced Bridge Funding.
1. Waiting for Lien Resolutions
One of the more frequent delays faced by attorneys is the resolution of liens, which can hold up settlement distributions for months.
- Medical Liens
Medical liens are a common issue in personal injury cases. When a plaintiff undergoes medical treatment during litigation, healthcare providers often operate on a lien basis, expecting payment from any settlement proceeds.
For attorneys, negotiating these liens can be a tedious process. The aim is to ensure that the payment terms are fair and reasonable, reflecting the actual cost of medical treatments.
This often involves back-and-forth discussions with medical providers or third-party collectors, particularly in cases involving significant injuries or extensive procedures.
When multiple providers are involved, the process becomes even more drawn out, causing months-long delays that prevent settlement funds from being distributed to the client and attorney.
- Medicare Conditional Payments
For plaintiffs on Medicare, repayment of conditional payments adds another layer of complexity.
Medicare law mandates that any medical costs associated with the injury be reimbursed before the settlement funds are distributed. The process involves attorneys submitting detailed documentation, negotiating with administrators, and ensuring compliance with strict deadlines and guidelines.
Medicare’s systems and procedural requirements are often cumbersome, marked by prolonged waiting times for approvals and calculations. This can result in months of delay for attorneys who are merely trying to finalize case settlements.
Such delays highlight the obstacles attorneys face as they work to satisfy these requirements.
- Workers’ Compensation Liens
Workers’ compensation liens arise when a plaintiff has received benefits for a work-related injury. These liens grant the workers’ compensation insurer a right to be reimbursed from the settlement proceeds.
Resolving these liens requires meticulous negotiation to protect the plaintiff’s award while also ensuring compliance with legal obligations. Although some attorneys can access their fees before the lien is settled, the distribution often remains on hold until all legal and procedural hurdles are cleared.
Cases with multiple insurers or disputes over the payout can extend the resolution timeline, making it challenging for attorneys to maintain the financial health of their practice.
2. Waiting for Final Judge Approval in Class Actions and MDLs
Class actions and MDLs often pose unique challenges due to their intricate legal frameworks. After a settlement is reached, a preliminary approval is granted to notify class members about the terms.
Members then have the opportunity to object to the settlement or opt out entirely, ensuring fairness but adding delays. Courts oversee this notification process and subsequently schedule a final approval hearing to assess any objections and finalize the settlement terms.
This interim period can stretch over 6 months or longer, as courts often deal with large volumes of case materials and input from multiple stakeholders.
Sometimes the delay is a result of scheduling. It can take the courts time to schedule a final approval hearing simply because of the number of cases they are dealing with.
This was very evident during the height of the pandemic, where a backlog of cases developed and caused long scheduling delays. It’s gotten better since then, but this is still sometimes an issue depending on the court.
For attorneys, these delays are particularly challenging because their fees hinge on case resolution.
When final approval is delayed, so is their payment, pushing firms to manage budgets carefully to stay afloat during this time.
3. Plaintiffs Who Are Minors
Legal cases involving minors often undergo heightened scrutiny to ensure that settlements serve the child’s best interests.
The requirement of judicial approval begins with the filing of a petition and proceeds to a hearing, during which the court evaluates the fairness of the proposed settlement.
Many states also require that a portion of the settlement be placed in trusts or restricted accounts to safeguard the minor’s financial future, making the process even more time-consuming.
These steps, though essential for protecting young plaintiffs, create hurdles for attorneys who must wait for the court’s decision before they can claim fees.
Attorneys who represent injured minors often face months of delayed compensation, adding financial strain to smaller or mid-sized law firms.
4. Plaintiffs Who Are Deceased
When a plaintiff passes away during litigation or after a settlement is reached, the case usually requires involvement from probate courts.
The probate court ensures that the distribution of settlement funds aligns with the deceased’s wishes or state laws.
Probate can tie up funds for months depending on the complexity of the estate and whether disputes arise among heirs. While in probate, attorneys’ fees are often stalled.
Eventually lawyers will receive their attorney’s fees from the deceased persons estate, but often lawyers want access to the money they’ve earned as soon as possible.
5. Cases Against Local, State, or Federal Government Entities
When litigation involves government defendants, unique challenges emerge because of the bureaucratic nature of approval and payment processes.
Settlement agreements with local or state governments often require sign-off from governing bodies such as legislative councils or boards, which can only meet for review at scheduled intervals, delaying approvals.
On top of this, the payment mechanisms used by these entities—ranging from budget constraints to processing inefficiencies—often remain slow and cumbersome. The result is months (and sometimes years) of waiting, even after all parties have agreed on the settlement terms.
Attorneys handling cases against public entities frequently find themselves caught in these systemic delays, which can disrupt operational cash flow, especially for smaller firms.
6. Binding High-Low Agreements
High-low agreements provide a structured approach to settlements by establishing minimum and maximum payouts, regardless of trial outcomes.
While these agreements mitigate risk for both parties, they introduce delays for attorneys waiting to know where their clients’ settlements fall within the established range.
These agreements rely on the trial’s conclusion to confirm the exact payout amount, which can take months if a case involves extensive proceedings or appeals.
Although attorneys can take some comfort in knowing their fees have a guaranteed minimum, the waiting period remains a challenge.
Post Settlement funding offers attorneys the ability to access part of the money owed to them right away (for a fee) and then they can collect the rest later.
7. Defendants Delaying Settlement Check Distribution
At Balanced Bridge Funding we often say, “settlement does not equal payment.”
Even after settlements are agreed upon, defendants can introduce further delays by prolonging the distribution of settlement checks.
Various obstacles can arise, including internal administrative inefficiencies, slowed processing times within corporations, or changes in payment protocols.
Like most people, attorneys want to receive the money they are owed as soon as they can, which is why attorneys use post settlement funding to get some money right away.
This is not an exhaustive list of reasons why attorney might experience these delays. There are other reasons as well and Balanced Bridge Funding can help with almost any type of delay that arises.
Why Post-Settlement Funding Matters
Plaintiff work can be rewarding for attorneys, but it often takes years to reach a settlement agreement on behalf of their clients.
Once a settlement has been reached however, payment of the settlement funds can be delayed for a multitude of reasons.
It is expensive for attorneys to hire experts, travel, and maintain regular business expenses. Then on top of that, they have paid a team of lawyers for spending hours talking to clients, witnesses, sifting through discovery materials, taking depositions, preparing for and attending trials, and talking to the defendants’ lawyers.
All of this costs money – a lot of money.
Because of this, when a case finally reaches a settlement agreement, but payment is going to be delayed, many law firms choose to use post settlement funding to get access to some of their attorney fees they’ve spent years earning.
Some lawyers use the funds from post settlement funding to restore their cash coffers, but in a lot of cases, the lawyers just want to get some of the money they’ve worked so hard for.
Very few businesses wait years to get paid for the work they’ve done. But plaintiff attorneys do this every day. Post settlement funding allows them to collect some of their hard-earned money right away. After all, they’ve earned it.
To learn more about Post Settlement Funding for Attorneys, please CLICK HERE.
Summary – Reasons Attorneys Need Post Settlement Funding
Settlement delays can arise for numerous reasons, from lien negotiations to court approvals to administrative hold-ups.
These hurdles aren’t just a headache for attorneys—they can obstruct cash flow and hinder a firm’s ability to serve its clients effectively.
Post-settlement funding offers a practical solution, giving attorneys access to the funds they’ve earned while waiting for settlements to be fully processed.
By bridging the financial gap, this type of funding ensures that lawyers can focus on securing justice for their clients without getting bogged down by inevitable delays.
About the Authors
Balanced Bridge Funding offers legal funding solutions for plaintiff attorneys and firms on their fees and plaintiffs on their awards.
At times, a settlement can be reached in a case, but various delays can hold up the distribution of contingency fees for plaintiff attorneys and/or the settlement awards for plaintiffs.
In those situations, Balanced Bridge provides advances to attorneys and advances to plaintiffs on the pending fees or awards.
To talk to one of our legal funding specialists about getting help managing your law firms’ cash flow, please call (267) 457-4540 or email info@balancedbridge.com.
To apply online, simply click here and fill out our quick application form.
