This episode of the Personal Injury Marketing Minute highlights a critical issue faced by personal injury clients: managing immediate financial burdens while awaiting settlement payouts. Traditional funding options, such as personal loans and settlement advancement loans, often prove inaccessible or predatory, adding stress to an already difficult situation. In response to this challenge, the Milestone Foundation has emerged as a nonprofit alternative, providing pre-settlement funding that aims to protect clients from exploitative practices.

Rachel McCarthy from the Milestone Foundation joins us to share the organization’s innovative model and its mission to address the financial inequities within the legal system. She explains the foundation’s non-recourse settlement advancement model, which sets it apart from traditional funding methods, and its low, simple interest structure designed to offer clients a fair and transparent solution during their time of need.

Visit The Milestone Foundation online here: https://themilestonefoundation.org/.

See all episodes or subscribe to the Personal Injury Marketing Minute here: https://optimizemyfirm.com/podcasts/.

https://youtu.be/kpS4dNg3XfY

Transcript:

Welcome to the personal injury marketing minute, where we quickly cover the hot topics in the legal marketing world.

One of the biggest challenges that clients face after a personal injury accident is how do I pay the bills that I have right now with a good personal injury lawyer?

They know the settlement is coming and it will cover things on the backend, but what about today? There are options for personal loans, but it can be tough to qualify.

Then there are settlement advancement loans, but those can be insanely predatory and will eat away a client settlement. Fortunately, a nonprofit settlement funding foundation is now providing an alternative for settlement advancement.

Rachel McCarthy: from the milestone foundation joins us today to discuss the foundation’s groundbreaking mission, the inspiration behind its creation.

and the critical need for a non-profit alternative to traditional funding methods. Thank you so much for joining us today, Rachel.

 

Rachel McCarthy:

Thanks, Lindsey. I’m happy to be here.

 

Lindsey:

Well, could you give us a brief overview of the Milestone Foundation and its mission?

 

Rachel McCarthy:

Absolutely. So the Milestone Foundation is a 501c3 non-profit organization, and we exist to help plaintiffs who are having trouble covering their basic living expenses while they are pursuing justice.

So most of the families and individuals, we provide financial assistance to help them cover basic living expenses like housing or vehicle or utilities, groceries, while they are going through the duration of their personal injury lawsuit.

 

Lindsey:

Well, what inspired the creation of the Milestone Foundation as a non-profit pre-settlement funding option?

 

Rachel McCarthy:

So our founder, John Baer, was a settlement planner, and he… He would work with families who were going to be receiving a settlement, figuring out the financial plan for these folks once they have their settlement funds.

And he kept noticing that plaintiffs would owe a huge, a significant portion of their settlement to these for-profit lending companies.

And he thought there has to be an alternative for these folks, and there wasn’t. There was no alternative. So his wife, Amy, and him decided to start a non-profit model that would do pre-settlement funding, so advancing a small amount of funding on the settlement, and do it as a non-profit.

So not looking to make money, but just looking to help people bridge the gap and then grow the work that we do as much as we can.

 

Lindsey:

And that is huge. mean, A, to acknowledge that need, and then to do something about it, that speaks volumes about- about where they are in terms of wanting to actually help their clients.

As opposed to just profit from working the cases. And that is incredibly admirable. And I mean, there are other options out there, but they can be predatory or they can be difficult to qualify for.

And it leaves a bulk of the clients who are just trying to get by in a really bad financial situation on top of being in a difficult physical situation as a result of their injury.

 

Rachel McCarthy:

Yeah, we always say it’s like insult to injury, really, truly, because, you know, most people these days are living paycheck to paycheck or you might not have a substantial savings.

And if something happens to you, like some kind of catastrophic accident or a car accident or, you know, a medical device accident, injury, you don’t have a pool of savings or you don’t have a support system that can get you through.

You know, litigation can take years or even even if it’s just for. Six months, you still have to pay your bills.

You still have to pay your rent or your mortgage. And where is that going to come from? It’s like you might know that you’re going to be getting $1 million, $2 million, $500,000 down the line, but that doesn’t help you today.

And so that’s where these people get really stuck.

 

Lindsey:

And so this model is just so different from everything else that’s out there. So walk me through how this advancement model works and how it is different from the other funding models that are out there.

 

Rachel McCarthy:

Sure. So the Milestone Foundation provides settlements, advances on settlements at 10% simple interest. So what that means is simple interest is calculated only on the principal amount that you’re advanced.

If you take out a $10,000 advance from us and it takes you a year to pay it back, the interest that would accrue is just 10% simple interest.

So it’s $1,000. A lot of the for-profit companies in the industry… They charge much higher interest than that, and also they do so in a way that compounds.

So the difference with compounding interest is that it’s calculated on the principal plus any interest already earned. So it could compound monthly, it could compound quarterly, biannually.

Everyone has a different model. And when you take that into consideration and the interest rates that they’re doing that at, we’ve seen people owing an interest of 49% at the end of the year on what they’ve been advanced.

It’s really egregious. And the reason why it can be that way is because the industry is really not regulated.

It’s not federally regulated. Certain states are more specific with rules or restrictions or guidelines around this. But for the most part, the type of lending is called non-recourse.

So that means that if you don’t recover, if you don’t, in these cases, if you don’t receive a settlement, if your case doesn’t, you know, you don’t win.

Or maybe you received a settlement, but it’s much smaller than what you were advanced, then you don’t have to pay it back.

So if we fund a plaintiff who is struggling to make ends meet and their attorney feel like it’s a great case and in the end something happens and it doesn’t work out, we’re out that money.

And so the fact that it’s that high risk, it justifies the for-profit lenders to charge such high interest because they need to cover that.

And so that’s one of the things that’s great about us, but also tricky is because we don’t charge those high interest rates because we’re not trying to turn a profit.

But then if we end up giving out a lot of money and we don’t get it back since we’re a non-profit, it just limits how much more we can give out.

 

Lindsey:

Right. And I’m sure that as a non-profit, you’re looking for other ways to offset that risk. Looking for grants and other ways that support, financially support your foundation.

And since it is risky, are there any limits on how much an applicant can borrow or what expenses the loan can be used for?

 

Rachel McCarthy:

Yes. So the Milestone Foundation is a little more strict in what we will fund, given what I said, that we don’t have, we don’t charge a lot of interest.

We don’t have a big cushion. So we are more reserved in what we will fund. We do not typically fund more than $25,000.

And I would say our sweet spot is around $6,000 is the average advance that we give. It’s really just intended to be a bridge, a bridge gap to help them get to their settlement.

And we encourage people to not take much more than they need, you know, and that’s another thing that makes us different than the other companies.

They may say, yeah, take whatever, take, you know, take $100,000 to them. It doesn’t, it does no skin off their back.

Because they’re just growing interest on that. And so the more you take, the more they’ll make. So we really work with families and plaintiffs to try to figure out what they think they need.

And we will only provide for basic living expenses. So housing, transportation, child care, support, groceries, utility bills, those things.

 

Lindsey:

And that makes a lot of sense. Because no, you don’t want to be bridging the gap and then having somebody go out and get like a new handbag that’s, you know, $3,000.

Right. Exactly. So that’s really not what it’s used for.

 

Rachel McCarthy:

Yeah.

 

Lindsey:

And so with this, you know, what other preventative measures do you put in place to make sure that your borrowers are actually going to win their case?

How do you protect yourselves with that?

 

Rachel McCarthy:

I mean, there’s not much we can do. know, part of consumer litigation funding is you’re not taking an interest in the case or you don’t have any say or influence over how the case pans out.

So really, we rely heavily on our network of trial lawyers to send us plaintiffs in cases that they feel are pretty strong.

And so we sort of think of that as our first level of vetting, I guess, is we really want trial lawyers who recommend the Milestone Foundation to their plaintiffs to understand how we operate and how we’re different.

And then to send us cases that they feel like there’s a good likelihood that this person will recover and that you will get your advance back.

And then we just have a committee that assesses all these claims, speaks really thoroughly with both the plaintiff and the attorney before we review their case, just to make sure we have a full understanding of the whole picture.

A lot of the other for-profit companies, you can just go on their website and fill out a quick form and they’ll guarantee funding in 24 hours or something like that.

And we’re a little more diligent than that. So it might take a few days before you hear back from us.

Because we do have a committee that reviews the cases once they have all the information they need.

 

Lindsey:

And so clearly this needs to go through the attorney first before it reaches you. So what are the steps for a client to apply for funding through the Milestone Foundation?

 

Rachel McCarthy:

Yeah, we typically, whether we receive outreach from the attorney or from the plaintiff, we direct them to our website where there’s an application form.

And that will get them in the queue. And then we have a case manager who will reach out, talk to the plaintiff, talk to the attorney.

You know, we have to get the attorney’s buy-in or agreement, rather, that they are aware that their plaintiff is taking funding.

And a lot of attorneys, a lot of trial lawyers don’t like consumer litigation funding. And I get it because they’ve seen how their clients don’t really understand what they’re signing or they don’t know what they’re asking or they don’t understand the implications of the arrangement.

And so trial lawyers tend to be really, you know… Stay away from consumer funding. I do understand, but that’s why we really want to educate the whole community and let them know what we’re doing is different.

Our mission is different. We’re not the same as the other guys. Essentially, just go to the website and fill out a form, and that puts the request in the pipeline.

That’s great.

 

Lindsey:

It’s a great place to start, and what a great mission you guys have.

 

Rachel McCarthy:

Can you share any success stories or case studies where the Milestone Foundation has proven transformative for plaintiffs? Yeah, and every plaintiff’s story is interesting and compelling.

That’s why I wish we could fund everyone. I hate having to say no to some requests, but as a nonprofit, we have limits on our funds and on our financial situation.

So we recently had an advance that was paid off just within the past month, and this individual, he was…

Father of six kids, you know, working to support his family. And he was injured by a defective medical device.

So he was having a blood clot removed from his leg and the device broke off in his body. And the broken device had him hospitalized for over 30 days.

He needed to have all these further procedures. And he was out of work this whole time and then had to continue to be out of work while he recovered.

And I think, you know, we gave him in advance. We helped him keep the roof over his family’s head while his case was being litigated.

And he was super appreciative. We just spoke with him when he paid it back a couple weeks ago. And one thing I thought was also interesting was he really spoke about the way it affected his mental health.

Because unless you’re a plaintiff yourself or if you’re a trial lawyer, you can’t easily empathize with what someone is going through when they’re going through a catastrophic accident or a tragedy or this trauma.

And they’re already struggling with a change in their circumstances. And then all of the, you know, like the ripple effects.

So he was like, it really just helps me with my mental health as well, because I started spiraling, not knowing what I was going to do.

So I think that that’s a really good thing to consider, too, is it’s more than just this person is down on their luck or something like that.

It’s like, you know, they’ve had a life-altering incident. And then on top of that, now they’re scrambling to figure out how they can keep their family afloat.

So it’s just a really hard time for, you just have to be, you know, mindful of all those things.

 

Lindsey:

Well, and I know that there is a study out there that shows the different levels of stress that happen from different life events.

And I think right up there with the loss of a spouse or a divorce, financial stress is one of the most taxing stresses on your body.

Your cortisol levels are through the roof and it just takes its toll on you in a way that. Very few other things can.

So when you have that compounded with a physical injury, and you and I, you know, as mothers, we both know that having kids is already a stress enough of its own, but to have six kids on top of that, to know that at least that financial burden is taken off of your plate, know that the roof is going to stay over your head, your kids are going to have food to eat, there’s going to be some semblance of normalcy for the people that you care about most.

You can’t, mean, there, there’s absolutely nothing like that. I’m sure that that was so transformative and huge piece of his overall healing, and he will be appreciative for years to come.

And so these are the great kinds of things that you guys are doing right now. How do you envision the Milestone Foundation evolving over the next five to 10 years?

 

Rachel McCarthy:

Well, I would love for us to become better known in the industry, because I’m still surprised that we’ve been around for almost 10 years, but we’re sort of like a best kept secret.

So we definitely would love to. to expand and grow our reach. I’d love to see us do more advocacy work.

Personally, I’m really interested in politics, but to see us take more of a leadership role with trying to get the industry more regulated so these for-profit lending companies have more guidelines that they have to adhere to so that more companies, I mean, we, and there are certainly other players out there that are better than others.

You know, there are ones that are much more ethical than others, but it would be great to just see like what the basic, you know, fundamental rules that they have to follow, have it be standardized and have everyone have, you know, just more restrictions around what they’re allowed to do.

So I think that advocacy work is a really interesting angle that we haven’t totally explored yet. So I’d love to see us expand in that.

And then obviously, yeah, I’d love for us to grow our reach. And in order to do that, we have

To get more reliable revenue streams, so donations and grants and any kind of, you know, if you’re a trial lawyer that has a family foundation or your law firm has a charitable giving department, you know, those are the types of things that we would love to be in consideration to receive.

Because the more funding that we receive through any avenue is more funding that we can give out to families.

And it really is like a self-fulfilling model. You know, we give out in advance and then when they get their settlement, whether that is a year or two from now, they pay it back and it goes back into the pool of funds that we can give.

So, you know, we’ve been around for 10 years and we’ve given out $6 million to families and in just this revolving pool of funds.

So the more people that know about us, that send us good cases. You know, the more that donate to our mission or understand what we’re trying to do in the industry and get on board with it, the bigger we can grow, the more plaintiffs we can help.

 

Lindsey:

And you have a great listener base here that is, you know, following along with everything that you’re saying. And so how can our listeners support you or get involved with the Milestone Foundation?

 

Rachel McCarthy:

How can they reach out? So for trial lawyers, we really just, we’re happy to talk to anyone. I would love to get involved with state trial lawyer organizations or associations.

Just, you know, anyone in the personal injury space, they can email me, rachel at themilestonefoundation.org. They can reach out on our website.

But really, like us on social media. Help us just get the word out. If you’re on a trial lawyer listserv and someone’s looking for consumer litigation funding, mention the Milestone Foundation, you know.

So if they’ve never used us before, they can check us out and see what we do and just hear a little bit about our mission.

So really just… Spreading the word, sending us plaintiffs that need some help and could use our services and have a good case.

And then, yeah, just partnering up, opening any doors for us, really. I mean, what we’re doing here today, Lindsey, being able to reach a new audience, you never know who’s going to hear the work that you’re doing and think, oh, this is awesome.

I was a plaintiff myself. I know what that’s like. Or I’m a trial lawyer who hates this industry.

 

Lindsey:

How can I help? You know, so just getting the word out there is really helpful. Well, thank you so much for coming on and talking about the Milestone Foundation today and sharing your mission and your process.

And thank you so much for the great work that you’re doing for the plaintiff community. Thanks so much, Lindsey.

It’s been really nice to talk with you.