As I traverse the country, I often observe varying business strategies employed by different law firms. While many lawyers perceive their approaches as advantageous for their practices, my perspective tends to differ, prompting the need to deliver some sobering insights.

Numerous attorneys inadvertently hinder the growth of their own firms by tying up their funds in cases where they do not receive the full contingency fee. A prevalent fee arrangement involves a 60/40 split, favoring the firm that receives the case from another. This arrangement requires the firm to cover all associated case expenses.

While this business model may appear beneficial for many law firms on the surface, is it truly so? Despite seeing a significant percentage of their cases coming from other firms—30%, 40%, or even 50%—what these firms may not realize is that the capital they front at no cost to the client is impeding their own firm’s growth.

How? Every dollar invested in another law firm’s case locks up resources for an extended duration, potentially leading to cash flow challenges. This, in turn, may hinder allocating more funds to their own firm’s marketing efforts or prevent the expansion of staff to handle additional cases.

This cycle gives rise to another business challenge: the need to hire more staff to manage volume of new clients from other firms. However, the caveat is that despite increasing operational demands, the firm is only entitled to 60% of the contingency fee. The question then arises: How does this align with sound business decision-making?

If you’re interested in exploring an innovative solution to address these challenges, we invite you to learn more about Capital Financing’s Case Expense program. Feel free to reach out to us at or visit our website at for further information.