CHARLOTTE, N.C., June 19, 2019 /PRNewswire/ -- Alliance Legal Solutions launches Fundafi.com, a technology enabled lending platform that improves access to financing for small law firms across the United States. This move addresses a segment of the market that historically has been underserved by the lending market, by providing loans that are sized and timed to work specifically for small law firms. See client success stories.
Like any business, law firms can only thrive if their business is financially sustainable. However, as with the practice of law more generally, there is increasing pressure on small law firms to focus on marketing, client generation, and technology/productivity efficiencies to increase profitability. Yet small law firms often have unique barriers to addressing these key growth areas. "This is where Fundafi sees an opportunity to help small law firms position for growth," remarks Cheryl Kaufman, CEO of Alliance Legal Solutions (d/b/a Fundafi.com).
The United States has more than 250,000 law firms with less than ten employees, and according to a study conducted by the Legal Executive Institute, Thomson Reuters, 71% of these firms reported that their biggest challenges are acquiring new clients and spending an increasing amount of time and money on administrative tasks. To address these issues, small firms need to wisely deploy additional capital, a resource that is often difficult for small firms to access.
Fundafi's products allow small firms to access capital by leveraging the value of their cases and parlaying those future fees into collateral for financing. This approach to financing gives law firms greater access to working capital while avoiding the traditional inflexible repayment requirements that fail to match the timeline of a small firm's fluctuating fee recoveries.
"Law firms, especially contingent-based firms, typically experience uneven cash flows. We are purpose-built to finance that reality," according to Megan Baer, General Counsel of Alliance Legal Solutions.
The challenges small law firms face are more extreme in contingency-based practices, in which substantial resources are needed to prepay case expenses. Without access to financing options, small firm attorneys often try to bridge cash flow gaps with their own personal resources, an approach that can lead to great personal stress and a vicious cycle of financial fragility. It also foregoes potential legal and tax advantages related to business financing.
Fundafi's business model can nurture a law firm's growth much like a private equity firm would do for a business. Fundafi has deep knowledge of small law firm practices gained during 8 years of experience working with thousands of firms. The data collected and analyzed has shaped the underwriting, financing and servicing of loans and led to the development of a suite of products that can optimize client outcomes and drive the continued growth of law practices.
How are capital investments used to build law firm business success?
- To build their client base by allowing for new marketing and client development opportunities.
- To invest in technology that increases operational efficiencies.
- To allow for better and more sophisticated case development.
- To bridge cash flow gaps while waiting for fees to come in.
Cheryl Kaufman, founder of Alliance Legal Solutions and Fundafi, is an entrepreneur and attorney who works to solve systemic challenges in the legal industry: "Small law firms are the cornerstone of access to justice in our country and it is time for business solutions to evolve to make the practice of law sustainable and viable. It is all about using our data and resources to improve outcomes for these firms and their clients." Kaufman says, "Fundafi prides itself on providing transparent options and actionable intelligence to small law practices. We built this platform so attorneys could leverage their future receivables to empower success in a way that is customized to each firm's unique needs."
About: Fundafi, operated by Alliance Legal Solutions, provides innovative financing products to small law firms across the United States by providing capital for growth. Founded in 2011, by Cheryl Kaufman, a graduate of Wake Forest School of Law. 877-584-9044.