In many types of cases, such as personal injury, workers’ compensation, family law mediation, and bankruptcy, third party lien claims inside of settlements are a common occurrence. A lienholder is an individual or organization to which the client legally owes part of the settlement. A law firm may receive bills that are to be paid on behalf of a client when a settlement is received. Part of the settlement will be designated specifically for expenses.
Challenges of Lien Claims
Managing third party lien claims as an attorney is not always a simple task. Challenges include:
Accurately tracking expenses and producing a settlement statement
Negotiating the appropriate value in the settlement
Keeping vendors informed of payment schedules
Appropriating funds when expense amounts are less than bill totals
Keeping the client informed of their expenses & after-settlement obligations
Adequate Accounts Payable Software
Managing third party lien claims effectively requires having an adequate legal-specific accounts payable software in place. Your accounts payable system should assist in easily tracking your client expenses and create the reports that your firm needs to correctly communicate balances and obligations to all parties involved in the legal settlement.
Third Party Bills in CosmoLex
Now you can track ALL third party liens within a matter and make payments from a matter’s trust funds all in one seamless system. CosmoLex makes managing third party bills simple. At all times, you will know your client’s total debt and be able to produce a comprehensive cost statement itemizing every charge (your charges, 3rd party claims, even charges which are paid by other parties such as insurance companies).
Your firm’s ability to properly track client’s obligation will ensure you have the full picture as you negotiate the settlement and minimize your liabilities to third parties. CosmoLex lets you easily enter bills as they come in, record all related notes on the bill itself, and even track original and negotiated amounts for each bill. Post-settlement, easily wrap up your work by making payments on obligations from matters’ trust funds directly within CosmoLex.