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Typical Law Firm Line of Credit Program Summary

Amicus Capital Services LLC is a private banking company that provides innovative financial services to trial lawyers in selected markets across the United States. The company has offices in Los Angeles, CA and New York, NY. The primary focus of the Amicus program is to finance case development costs for plaintiffs’ firms, thereby enhancing their ability to promote litigation on behalf their clients. The program is tailored to meet the unique cash flow requirements of trial lawyers and results in improved daily operations and increased distributable income for participating law firms.

To date, the founders of Amicus Capital helped pioneer the legal finance industry and have participated in well over two hundred million in loans to law firms that focus on plaintiff’s litigation.

About the Program

The Amicus program dramatically reduces the need for trial lawyers to serve as interest-free lenders for their clients. By participating in the program, law firms avail themselves of a secure source of funds that provides not only for future case development costs, but also for the recovery of monies already advanced on behalf of their clients. In the typical Amicus credit facility agreement, participating firms will be able to recover up to 100% of the amount of their case development costs in immediately available cash. The Amicus program produces many benefits for participating firms, including:

  • No principle payment until the underlying case is resolved. The firm is not required to make any principle payments until a case is resolved. Traditional banks require periodic repayment of principle balances. Amicus Capital understands the erratic nature of cash flows for trial lawyers.
  • Payments can be tied to a firm’s cash flow. Amicus only requires interest payments each month, principle payments are only required when the firm receives income.
  • No interest expense to the firm on cases that are won or settled successfully. Most states provide a mechanism by which attorneys are permitted to recover the costs of litigation when a case is brought to its conclusion. In addition to the costs of depositions, expert witnesses, demonstrative evidence, and the like, interest expense paid to third parties can generally be treated as a cost of litigation. Each state has its own ethics rules and opinions, with which participating law firms must comply.
  • Larger lines of credit are available through the Amicus program. Banks are typically reluctant to lend large sums of money to firms engaged in contingent litigation. As a result, bank lines are generally insufficient to cover the majority of a firm’s inventory of case development costs. Amicus Capital understands that the value of the firm is found in its cases. As a result, Amicus will often provide four to five times the amount of money that a traditional bank will offer.
  • Reduced risk is found in the Amicus program. Traditional banks are often indifferent to the cash flow requirements of a trial lawyer when a line of credit expires. Amicus Capital Services has designed its program to insure that attorneys have sufficient time to bring cases to a successful conclusion.
  • Eliminate Phantom Tax. Since advances on case expenditures are generally not deductable the capital that is invested in case development can show up as income to the firm resulting in a tax payment on funds that are not realized or available to either the firm or its partners until the underlying cases are successfully resolved which may be years later.

Mechanics of the Program

Amicus Capital does not evaluate the merits of individual cases. However, we do track case development costs on a case-by-case basis. The firm requests advances from Amicus as monies are spent on each individual case. Amicus Capital Services processes these requests on a timely basis, providing funds within no more than three business days. Amicus does not require the firm to submit invoices at the time funds are requested. However, Amicus will visit each participating law firm biannually to insure that funds are being used in compliance with the terms of the credit facility documents.

Amicus is able to time the principle payments to the firm’s cash flow by only requiring principle payments when the firm receives fee income. Upon receipt of attorney fees the firm will then make a principle payment equal to 30% of the net fee received. As the line revolves the funds are then immediately available for additional cases or working capital needs.

At the time of resolution, Amicus will provide an accounting of the advances made to the firm and the amount of interest paid on that specific case. Traditional banks do not provide this service, so attorneys generally have difficulty in allocating interest expense among their cases. In contrast, Amicus provides a clear and precise accounting for the interest expense for each case financed through the program.

Financial Benefits to the Firm

Many firms believe that it is inefficient to borrow funds for case development costs when they can afford to make such advances out of pocket. However, such is not the case. By participating in the Amicus program, law firms are able to recover up to 100% of the funds that are perpetually invested in case development costs. Even if these funds were invested conservatively in a retirement fund, the principals of the firm would recognize dramatic financial benefits. Amicus provides trial lawyers with the strength of financial leverage.

Costs of the Program

Amicus Capital Services charges an annual commitment fee equal to 3% of the total credit facility amount, subject to a minimum of $5,000. This fee insures that the firm will have access to funds under the program. There are no hidden charges to the program, such as application fees, monthly service charges, or other costs that are typically charged by traditional banks.

Interest accrues on each case at a competitive rate of interest that has varied between 17% and 20% per annum since the inception of the program. The interest rate is fixed for each firm and case at the time of the initial funding, protecting the firm and its clients from interest rate volatility.

Differences in the Amicus Program

It is often important to note things that a company does not do, especially with a revolutionary program such as the one offered by Amicus Capital Services. There are many finance companies in the market that offer extremely expensive loans to individual clients.

  • Amicus does not lend money directly to clients.
  • Amicus does not take an interest in any cases.
  • Amicus does not ask for a percentage of any settlement.
  • Amicus does not ask for a percentage of attorney fees.

Back to Law Firm Loans.

Each attorney and firm is different. To discuss how the Amicus Capital Services can help with your unique circumstances and needs, or to request a proposal, call us today at (877) 9-AMICUS, submit your information using the form to the right, or e-mail us at info@amicuscapitalservices.com.

California loans will be made pursuant to Department of Corporations California Finance Lenders License.
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