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John Bair
John Bair
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Knowing Your Client: 3 Ways to Avoid Financial Pitfalls in Litigation

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In our work with plaintiffs and attorneys, we often hear about financial issues that lead to unnecessary complications. While I certainly don't presume to know more about the struggles of being a good attorney than any of you, I want to share some actions for mitigating common financial issues throughout the course of litigation. I hope you find them beneficial to your practice.

#1 Know Your Client's Finances

Great attorneys know their clients, but don't necessarily know all of each client's financial details. Take into account the affect that the following might have on your client's ability to stay solvent throughout litigation, and as a result, what financial expectations might be shaped on their end:

You may want to consider hiring a financial expert to conduct the exhaustive due diligence associated with the many settlement-related financial decisions.

#2 Know Your Client's Stakeholders

When a family pursues a settlement, people inevitably come out of the woodwork. By knowing up front who the stakeholders are–and likewise, who the fair-weather friends are–you can understand who is shaping your client's view of the settlement. A good suggestion might be touching base with your client on a monthly basis to stay up-to-date on any changes in the interested parties.

#3 Know Your Client's Psyche

Plaintiffs have often suffered through personal injury or the death of a loved one and most of them have never seen wealth. Litigation is a daunting process for those who have never been through it, and the concept of then taking a settlement recovery and creating a lifelong plan can seem impractical to someone who has been through a personal or physical trauma. Employing a holistic approach that addresses best possible outcomes vs. worst possible risks can help mitigate some of the uneasiness inherent to the settlement.

If you "follow the dollar" and proactively develop an understanding of your client's financial situation, it can be easier to create an environment in which they have faith that post-litigation life will meet their expectations; for you, that can translate into a more satisfied client.

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Related Post:

Dissipation of Funds: How the 'Popcorn Lung' Case Demonstrates a Significant Post-Settlement Risk

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  1. Jay Fisher says:
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    Thanks, John, for reminding lawyers to be mindful of our client’s financial situation and knowledge base. We have seen too many clients undoing their structured settlements because of their poor decisions post-settlement, or because they required a more customized settlement plan to ensure the unexpected didn’t fully derail their financial future. Keep up the good work.

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