Biz Idea #24 – Financing for Criminal Lawyers’ Clients

by Byron on February 3, 2012

The problem:

Criminal lawyers want to get paid up-front, but often their clients lack the means to do so.  Collecting the bill, however, is a delicate matter.  First of all, collections is not the lawyer’s core competency.  Second, suing a client is generally regarded by lawyers as a no-no.  Malpractice carriers hate it when lawyers sue their clients, as it makes it far more likely the lawyer will be counter-sued for malpractice.  In fact, “have you sued a client” is a question on every malpractice insurance application.

It is often difficult for a criminal lawyer to get out of a case, once they have gotten in.  This makes getting paid up-front crucial.  The judge doesn’t care you have not gotten paid.  “You will represent that client.”

The Business

A financing company for criminal lawyers.

There is no question the need is there.  Criminal lawyers would take 80 cents on the dollar to get paid up-front all day long.  It is begrudgingly, if at all, that a criminal lawyer puts a client on a payment plan.

The financing company can threaten to sue the client or actually sue the client, where the lawyer will or will not.

The reason this doesn’t exist is because it may not actually be permitted under state bar rules.  If this is the case, this will go away.  It is simply a question of when.  Interesting fact – lawyers couldn’t advertise until 1977.

Yes, seriously.  They couldn’t advertise until 1977.  Lawyers, especially old school lawyers, view the law as a calling.  Maybe as a profession.  But, for whatever reason, they have a difficult time viewing law as a business.  This is going away.  For example, check out LegalZoom.  Though not actually a law firm, the legal profession would have found away to do away with a company like this not too many years ago.

Doableness

Put together the business model and find the pools of capital necessary.  This is a relatively simple business, but you need to find a team comfortable with running a financing company.  Marketing is not particularly tough.  As for technology, you would need an interface to get clients approved quickly.  Contracts are complicated.

This business would need a lot of money because there are some substantial fixed costs.  Three million plus access to capital probably gets you going is my gut feel.

My Thoughts

If the bail bond business can finance clients, so can criminal lawyers.

I might even have the first client:  this Maryland Criminal Appeals Lawyer.  Having a client before you have a business is never a bad thing.

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