For law firms, meeting the needs of personal injury clients — helping them win verdicts or reach healthy settlements, and cover often daunting medical and living costs as they wait for the proceeds — is an expensive business.
Personal injury attorneys know all too well that it takes money to make money. And, for even the most well-capitalized personal injury firm, this creates a financing challenge. Hancock Whitney is one of the few banks in the Gulf South that offer a litigation finance solution in Louisiana and Texas.
Litigation Financing at Hancock Whitney
Capital supports caseload
Building a winning personal injury case — obtaining accident reports, interviewing witnesses and paying experts to provide supporting testimony — is costly. In addition, due to their injuries, clients may not be able to work and can be challenged by major medical expenses and other cash needs while they wait for funds from a settlement or trial verdict. Financing the expenses associated with these cases often falls to the plaintiff’s law firm.
A single personal injury case can result in the need to finance tens of thousands — even hundreds of thousands — of dollars in related costs. If a firm is managing 20, 50 or 100 such cases, the need for capital can become enormous.
Litigation finance provides an attractive alternative to funding personal injury cases using the law firm’s own excess liquidity.
From underwriting to recovery
In the underwriting process, Hancock Whitney evaluates a law firm’s overall financial strength and record of producing successful settlements and verdicts rather than the merits of any particular active case. For eligible applicants, the bank establishes a master line of credit that can be used to fund eligible expenses in accordance with applicable state bar regulations. The firm can draw down funds as needed for any of its cases so long as it doesn’t exceed the master line cap amount. The bank deposits requested funds into the firm’s account on a same-day basis.
Typically, the line is for two years — the period during which most cases conclude. For more complex cases, term options of up to four years may be available.
For the first two years, interest on the line is accrued. Generally, no interest payments are required until the case settles.
The bank provides detailed monthly reporting on the loan funds used, and the interest accrued, for each of the law firm’s cases. When a case settles, this enables the law firm to recover the amount of the debt plus interest from its client and repay the loan.
Maximizing the firm's liquidity
With litigation finance, the law firm doesn’t have to use any of its excess cash to fund its cases. This allows it to use its liquidity to support growth of the business.
A law firm can use the capital it conserves through litigation finance for everything from general overhead and office expansions to marketing campaigns, bonuses and partner distributions. Having the support of litigation finance also enables a firm to accept more cases because it can handle the related expenses.
Why look to us
Competitive borrowing rates are a major reason attorneys should look to Hancock Whitney for litigation finance. Nonbank financing providers typically charge much higher rates due to their higher cost of capital. Many also charge hidden fees we don’t.
As for other banks, we know of only one that offers a similar litigation finance solution in the states where we offer it — Louisiana and Texas.
Other banks might offer a traditional line of credit for litigation needs, but this form of debt requires monthly interest payments and doesn’t provide detailed reporting that enables you to easily pass financing costs along to clients.
We have a dedicated litigation finance team with experienced litigation lenders and a 20-year record of success. As a full-service bank, we also have trust and wealth management advisors who can help plaintiffs invest and manage case proceeds. To learn more about the terms and conditions of our litigation finance solution, ask your banker to introduce you to our team, or visit our litigation finance web page.
Hancock Whitney Bank, Member FDIC. All loans and accounts subject to credit approval.