Cash Flow Issues at Your Bankruptcy Firm? 3 Tips to Bring In Cash Now.
If your law firm is currently cash-strapped and handling fewer bankruptcy cases, consider following the lead of other successful firms across the country with these tips for generating more cash-up-front cases.
1. Offer “$0 Down” to new prospects. (Yes, it sounds counter-intuitive.)
Use a third-party entity to offer bifurcated fees to Chapter 7 prospects who traditionally have had a pressing need to file, but not the immediate resources to pay your fee prior to filing. Services such as Fresh Start Funding are being used by hundreds of law firms across the country.
In a bifurcated fee program, the debtor signs two agreements for representation: pre-filing and post-filing. For a true “$0 Down”, you waive your fees for the pre-petition work and only collect fees for the post-petition work. Many firms are still able to charge more overall so long as their fees are reasonable under Section 329.
A service such as Fresh Start Funding provides a line of credit to the attorney – i.e. a “loan” for the fees so the attorney is paid immediately – at which point the funding service manages the debtor’s payments and applys them to the line of credit. They also provide credit reporting to help debtors begin to rehabilitate their credit. This allows the attorney to offer a true “$0 Down to File” option to qualified debtors, and still get paid quickly for their legal services.
To find out more about how Fresh Start Funding works, see their website:
2. Immediately jump start the number of qualified new cases coming into your firm.
Use an established Pay-Per-Qualified-Inquiry lead generation firm such as LeadQ to generate new prospects into your firm quickly. In as little as a week, LeadQ can have a growing stream of new bankruptcy prospects calling your firm to inquire about filing.
LeadQ charges on a Per-Qualified-Inquiry basis so bankruptcy firms only pay for first-time inquiries from prospects who qualify to file in their service area. Qualified prospect inquiries are post-billed monthly and charged to payment cards, so the law firm pays out-of-pocket up to two months after the debtor contacts the firm.
This allows time to retain the prospect, set up a bifurcated fee arrangement, file the case AND GET PAID for the legal services all prior to paying for the generation of the prospect in most cases.
3. Retain prospects from your lead generation who don’t qualify for $0 Down by collecting a low down payment.
For some new prospects, either the $0 Down bifurcated fee program is not appropriate or they may choose to pay an overall lower attorney fee by paying the law firm directly.
In these cases, collect a reasonable low down payment at the time you retain them. Most prospects are able to come up with $50-$100 at minimum to retain you and start reducing their exposure to debt collectors.
This helps you build your overall receivables, prevents the prospects from being retained by your competitors instead of you, and contributes immediately to your incoming cash flow.
LeadQ and Fresh Start Funding together have helped bankruptcy attorneys all across the U.S. grow their caseloads and do so with improved cash flow at their firms. Contact both to learn more about how their programs can benefit your firm, and receive a list of bankruptcy firms you may contact as references.