Professional services
The broader guide.
Industry guide
Funding for law firms
A contingency firm is a portfolio of investments that pay out at settlement; an hourly firm is a receivables business. Most small firms are some of both. Neither profile fits a daily-debit advance, and both have specialized lenders.
How the money moves
Contingency practices advance case costs (experts, filing fees, records, depositions) for months or years and collect fees only at resolution. Hourly and flat-fee practices bill monthly, often with retainers held in trust, and collect on net-30 or slower. Fixed costs are salaries, rent, malpractice insurance, and research tools. A large settlement can arrive in any month; nothing arrives in others. Trust accounts are not working capital and must never be used as such.
Two worked scenarios
Scenario A: $140,000 of case costs across twelve contingency matters
A hypothetical plaintiff firm funds costs from operating cash while fees are twelve to twenty-four months out. A line of credit from a law-firm lender, secured by the case inventory and partner guarantees, carries the costs at interest; case-cost financing from specialty lenders is a distinct product with its own pricing and, in some states, ethics considerations. An advance sized to monthly deposits would debit against months with no fee income.
Scenario B: hourly practice with $90,000 outstanding at 60+ days
The problem is collections, not capital. Tighten retainer replenishment and billing cadence first; then a receivables line against billed, undisputed invoices (many factors will not take legal invoices; ask) or a general line sized to 45 days of billing.
Hypothetical numbers, labeled as illustrations; not quotes.
What fits what
| Need | Usually fits | Usually doesn’t |
|---|---|---|
| Case costs on contingency matters | Law-firm line of credit; case-cost financing (check ethics rules) | Daily-pay advance |
| Hourly receivables | Receivables-based line; improved retainer practices | Advance |
| Technology, furniture, build-out | Equipment financing; term loan | Advance |
| Buying out a retiring partner | Term loan; SBA 7(a) (education) | Stacked advances |
Questions specific to this business
- What do my state bar’s rules say about third-party case-cost financing and fee-sharing?
- Does the lender understand contingency inventory, and how does it value pending cases?
- Are partner guarantees joint and several, and how do they change if a partner leaves?
- Is the line covenant compatible with our existing bank relationship and trust-account rules?
Watch for. Never treat client trust funds as available cash; and confirm that any financing structure complies with your bar’s rules before signing.
What Fast Mula is and isn't. Fast Mula helps you compare business-funding structures and submit one inquiry. Nothing on this site is an offer, approval, guaranteed rate, or guaranteed timeline. Any funding depends on a provider's own review, and terms vary by state.
Common questions
Can a law firm get a merchant cash advance?
Some firms are offered them based on operating-account deposits. The structure fits poorly with irregular fee income and may raise professional-conduct questions; a law-firm line is the conventional tool.
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Tell us about the timing, the need, and the numbers.