Phillips explains that MidSouth’s approach allows trial lawyers to maintain their funds in their own law firm accounts rather than getting those funds tied up in the financing of a lawsuit. Since lawsuits can drag on several years before reaching a verdict or a settlement, this could be a serious burden on a lawyer.
MidSouth’s system is to set up a master line of credit for a lawyer and then to establish individual client loans under that credit line. The client actually signs for the loan, but the lawyer has control over the disbursement of the funds to the client or even to the file. Phillips says that the approach of most other lenders is to offer only a general line of operating credit. MidSouth’s loans don’t collect interest for two years, recognizing the long time spans often involved in litigation. Also, the bank offers low interest rates on these loans, something that is attractive to everyone involved in a lawsuit.
Phillips says that these loans are not just for large firms. As an example, Phillips tells of a personal injury lawyer who recently left the firm he had been with to start his own practice. MidSouth was able to help him get started with a smaller line of credit, and the bank is looking forward to increasing that line of credit for him as his practice takes off.
Lawyers who want to establish this kind of relationship with MidSouth can get started by providing some financial information, probably including some big cases, and tax returns for the last three years. The idea is to develop a three-year average so as to understand the lawyer’s potential as a client. And lawsuit financing is not the only product MidSouth provides for lawyers and law firms. The bank finances all kinds of real estate arrangements to help provide office space for lawyers and also assists with the acquisition of office equipment a law firm needs in order to operate. Lawyers can also finance insurance premiums through MidSouth. The bank is also an approved depository for client trust accounts for IOLTA purposes. MidSouth even offers structured settlement financing.
Adam Phillips is a Vice President at MidSouth Bank's Dallas location. One of his specialities is commercial lending, and he is often involved with legal financing. He has been in the banking business since 2005. He works in business development, including analysis and underwriting for commercial loans. The Legal Broadcast Network is a featured network of the Sequence Media Group.