6 Tips to Prevent Small Business Fraud

Occupational fraud is an expensive problem for businesses. In its 2016 Report to the Nations, the Association of Certified Fraud Examiners reports that the median loss from a single case of occupational fraud is $150,000. A typical organization will lose 5% each year to fraud. With this in mind, MidSouth Bank has compiled six tips that will help any business guard against fraud.

First, used a dedicated computer for banking. Computers used for a variety of online activities, including social media, are more vulnerable to hacking.

Second, have a password policy. Everyone in your firm should change their passwords regularly, at least every 90 days. Also, passwords need to be strong. This means using at least eight characters, including at least one uppercase letter and one special character. And don’t use the same password for everything.

Third, educate your employees. Your staff may be your biggest vulnerability to fraud, but they are also your first line of defense. Hold regular security training sessions for everyone, new hires and seasoned staff alike. You should have guidelines for your employees covering the handling of confidential data.

Fourth, consider pre-employment background checks. This is a good general practice. It is especially important in the case of employees who will be handling money, financial data, or other sensitive material.

Fifth, focus on security. Stay ahead of security requirements and secure your IT infrastructure. The seemingly endless data breaches that keep making news should put everyone on notice to protect their company’s reputation and financial situation. The cost of fixing these problems makes it imperative that a business should have a solid firewall to protect data and other security software to detect and remove spyware and malware. Regular backups are a necessity.

Sixth, insure your business against fraud. Fraud and cybercrimes happen, but a business can purchase insurance to protect itself from financial loss. Find out how your bank will help you in the event of a problem.

You can visit MidSouth Bank’s website or follow them on Facebook, Twitter, or LinkedIn for fraud tips and alerts.

The Law Finance Channel is a featured network of the Sequence Media Group.

Law Finance and Firm Lending, Build Your Credit Profile with a Bank!

The importance of establishing credit BEFORE you need to
borrow to finance your practice

Some lawyers wait to start building their credit portfolio until they are involved in a big case that will strain their financial resources. This is a mistake that nay lawyer can easily avoid. Linda Terry, Vice-President at MidSouth Bank, explains how this kind of credit bind can be avoided and how MidSouth Bank can help. MidSouth is one of the only community banks to offer litigation financing for law firms.

Linda Terry

Linda Terry

Last minute financing efforts come with a lot of risks. Terry explains that, when a bank is working under duress and struggling to obtain financing when they are already tapped out financially, “they can further damage their credit score and opportunity to get favorable terms and rates.” MidSouth looks at a firm’s financial situation in a number of different ways. The bank looks at a firm’s financial information for the last three years and bases its line of credit determination on that information, particularly looking at some financial ratios. If a firm has done all its financing out of its own pockets, the ratios will be adversely affected.

Some people think that online and hedge fund lending are viable options for law firms. Terry disagrees. These operations “prey on desperate attorneys,” attorneys who have not established their credit with a commercial bank. The loans will have higher interest rates and shorter terms. The result is a higher cost of doing business to lawyers who use these services.

Litigation financing is a MidSouth specialty. Terry points out that MidSouth can meet all a firm’s banking needs, whether personal or commercial. Because MidSouth always has current information about a firm and its financial guarantors, the bank can move quickly to respond to the firm’s needs. MidSouth can provide a firm with a litigation line of credit in the amount they actually need along with an operating line of credit for short term needs, merchant bank cards, financing for new office equipment—the list goes on. MidSouth is ready to help law firms in a multitude of ways.

The Law Finance Channel is a featured network of the Sequence Media Group.

Litigation Finance Is a Valuable Litigation Tool, and MidSouth Bank Specializes In It

Emily Collins notes that financing commercial litigation can be a challenge, especially for young lawyers who are just getting started in practice. That’s why many law firms are turning to litigation financing as a tool to use in handling expensive litigation.

Litigation financing is a convenient and cost-effective option for trial lawyers. It allows lawyers to reduce out-of-pocket expenses and improve cash flow. Third party funding has become a more popular option in a time of shrinking corporate budgets and opponents with deep pockets.

Third party funding for litigation permits lawyers to seek full recovery for their clients instead of accepting an inadequate settlement because of fiscal constraints. Having a financial resource available permits a lawyer to pursue new client opportunities and to develop fuller relationships with existing clients who have limited budgets. Litigation financing also permits a lawyer to diffuse risk for the results in any lawsuit.

And the litigation funding source can become a valuable resource beyond merely helping out with a lawsuit. The funding bank can provide helpful feedback and can help assess a lawyer’s funding needs.

The Legal Broadcast Network is a featured channel of Sequence Media Group.

Looking for a Lender? Consider a Community Banker, Like MidSouth Bank

Emily Collins points out that choosing a bank to handle all of your money is an important decision. But looking around for a big bank may not be a good decision. You may find just the bank you need right in your own neighborhood.

There are many reasons to choose a local banker to handle your money. One big reason is the personalized service a local bank can give you. Another is the flexibility a local bank has in making loans. And local banks can offer you lower fees, according to Bankrate.

Big national banks often have a lot of financial tools to offer a borrower. However, there’s no guarantee that you will get a good loan rate. Big banks have many reporting levels to cope with, and they tend to have high staff turnover.

It is important to develop a good relationship with your banker. You need to deal with someone you can trust to make sure your money is safe. A face-to-face meeting with a banker at a community bank leads to quicker decision making between a customer and a banker. Another important consideration: local banks are often able to approve a loan that a big bank would turn down, according to the Institute for Local Self-Reliance.

Stacy Mitchell, co-director of the Institute, says that studies also indicate better interest rates on savings and better terms on credit cards and other loans offered by community banks. And keeping your financial business in your community also stimulates the local economy, with small businesses relying on community banks for lending.

So when you are working your way through the decision-making process to choose a lender, you may not need to go too far. Start in your local community, get to know your local bankers, and see what they can do for you.

 The Law Finance Channel is a featured network of the Sequence Media Group.

MidSouth Bank Is a Great Partner for Structured Settlement Planners. Two Experts Explain

The MidSouth Bank offers a number of services especially suited to lawyers, including several through its partner, The Rock Financial Group. Chris Shumate of Integrated Financial Settlements and Susan Clark of Millennium Settlements are affiliated with two companies that offer services through MidSouth, as they explain in this report.

Chris Shumate

Chris Shumate

One important service is providing structured settlement annuities when attorneys are settling lawsuits, Clark explains. The companies offer tax free annuities under 26 U.S.C. § 104. They also offer deferred attorney fees arrangements for attorneys at the settlement of a lawsuit.

There are several advantages of working with MidSouth. One of them is that it is a community bank. Shumate points out that a community bank will “know the lay of the land.” MidSouth bankers will know the lawyers and probably their clients. For the companies working with MidSouth and its banking clients, it is possible to develop good, solid structured settlements that meet everyone’s needs. It also permits a banker to work with plaintiff in a lawsuit down the road.

Susan Clark

Susan Clark

A bank offers advantages to a hedge fund in the structured settlement process. Shumate says that this relationship allows everyone to work in partnership. “We get to know the attorney, their clients, and the banker.” The agreements may incorporate special needs trusts for certain types of plaintiffs. Shumate says that Medicare set-aside accounts are also involved in many lawsuits today.

Working with MidSouth permits companies working with it to customize solutions for lawyers. Clark notes that they have a lot of resources available to them so as to devise something special a lawyer might need.

W. Christian Shumate, CSSC, is Vice President, Strategic Relationships at Integrated Financial Settlements, Special Markets. He has practiced in the structured financial settlement industry since 1982. He specializes in the Federal Tort Claims Act, the Defense Base Act and Aviation Related Claims.
Susan R. Clark, CSSC, the Director of Sales and Marketing for Millennium Settlements. She started her career in structured settlements in 2000. She has extensive experience from designing and presenting settlement annuity proposals, mediation attendance, preparing, reviewing and finalizing all settlement documents to creating, designing and implementing marketing campaigns for clients. The Law Finance Channel is a featured network of the
Sequence Media Group.

Structured Fee Agreements Permit Lawyers to Defer Taxes. MidSouth Is a Big Help

Law firms that handle plaintiff’s litigation are able to benefit from some special tax provisions that allow them to structure legal fees. Susan Clark and Chris Shumate discuss the advantages of structured fees in this report.

Susan Clark

Susan Clark

Clark explains that lawyers who receive a big lump sum fee payment, as typically happens when a personal injury lawsuit is settled, have the opportunity to defer receipt of the income and thereby defer taxation on the income based on Childs v. Commissioner and several private letter rulings. An attorney may need to use a structured fee because a big case is settling at the end of the fourth quarter of the attorney’s tax year, and the attorney doesn’t want to get moved up into a higher tax bracket.

A lawyer in that situation is able to structure the fee, and there are several options available. One obvious use would be retirement planning. Shumate says that some lawyers also structure their fees to cover operating expenses. The structured fee practice really started in the 1990s. Initially, fees were structured with fixed commercial structured settlement annuities. More recently, a new type of attorney fee arrangement has come along, referred to as enhanced attorney fee programs.

Chris Shumate

Chris Shumate

Among the enhancements included in this new type of arrangement is an indexed annuity funded attorney fee. Such an arrangement permits some market participation. Typically, says Shumate, these fees are tied to the S&P 500. One of the major benefits of such an arrangement is downside fee protection. If it appears that the market will go down in a year, the payments for that year would not be reduced.

Also, attorneys in some of these enhanced fee arrangements can request that their funds be allocated to an investment program—with a trust company, a financial advisor, or perhaps a bank like MidSouth. Working with MidSouth, says Shumate, is a big advantage because of the bank’s familiarity with the attorney customer’s needs and practice. It makes for “a very valuable partnership.”

Clark notes that these structured fee annuities are insurance products and are designed to create wealth. The possible arrangements for payments to an attorney are very flexible. The payments can be made throughout the course of an attorney’s life and to a surviving spouse upon the attorney’s death. This provides an excellent way to transfer wealth.

Clark adds that it is important for a structured settlement company to be involved while the attorney is negotiating the fee or, at the least, very soon after the case is settled. The reason is that the structured settlement company will draft all the documents to assure that everything is done correctly so as to qualify for the tax deferral.

W. Christian Shumate, CSSC, is Vice President, Strategic Relationships at Integrated Financial Settlements, Special Markets. He has practiced in the structured financial settlement industry since 1982. He specializes in the Federal Tort Claims Act, the Defense Base Act and Aviation Related Claims.
Susan R. Clark, CSSC, the Director of Sales and Marketing for Millennium Settlements. She started her career in structured settlements in 2000. She has extensive experience from designing and presenting settlement annuity proposals, mediation attendance, preparing, reviewing and finalizing all settlement documents to creating, designing and implementing marketing campaigns for clients. The Law Finance Channel is a featured network of the
Sequence Media Group.

Legal Financing by MidSouth Bank: Vice President Adam Phillips Explains How It Works

MidSouth Bank has developed a specialty in the field of legal financing. In this report, bank vice-president Adam Phillips explains the bank’s unique approach to financing litigation.

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.

Adam Phillips

Adam Phillips

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.

Phillips suggests that lawyers interested in pursuing a relationship with MidSouth Bank should visit the bank’s website or give them a call.

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 Law Finance Channel is a featured network of the Sequence Media Group.

Law Finance | Industry Trends

Structured settlement expert Mark Wahlstrom discusses developments in legal financing.

Legal finance has been an evolving area last ten years. What most people think of when they hear “legal financing” is case financing—borrowing money pre-verdict in order that a lawyers can effectively prosecute cases without expending their own money.

Mark Wahlstrom

Mark Wahlstrom

In the years after 2008, interest rates on investments dropped to one or two percent. Yet lawyers seeking case financing found themselves paying anywhere from 18% to 36% interest rates—credit card rates. Such high rates are attractive to investors but can be disastrous for lawyers if a case runs longer than expected.

One alternative Wahlstrom recommends is MidSouth Bank, with branches in Texas and Louisiana. MidSouth has developed expertise in both law firm finance and case finance. One extremely attractive aspect of working with MidSouth is the low interest rates, likely in single digits. MidSouth has been doing this for twenty years, so the bankers have a lot of experience working with lawyers. Because they only underwrite firms and cases in Texas and Louisiana, where they have branches, they get to know their customers very well. A solid understanding of a lawyer’s business model can mitigate some of the risks of litigation that drive up interest rates. And MidSouth avoids cases like mass torts and medical malpractice that can run for years and cause lawyers to run up too much debt.

Wahlstrom believes that this of regional financing is likely to continue because banks and other institutions are seeing the large margins that have been charged and find the market attractive. Lawyers are likely to be looking for banks, finance companies, and regional lenders as money sources because of the possibility of a personal relationship that may not be possible with a hedge fund.

Mark Wahlstrom, President of Wahlstrom & Associates, founded of one of the nation's first plaintiff only structured settlement firms in 1983, and is a renowned specialist in settlement planning, structured settlement annuities, structured legal fees, and the administration of large, complex multi-claimant settlements using qualified settlement funds and trusts. Located in Scottsdale, AZ he manages a national practice with clients in every part of the country. The Law Finance Channel is a featured network of the MidSouth Bank

(WSJ)Community Banks Have ‘Significant’ Untapped Borrowing Power

The nascent market for community-banking bonds has the potential to grow significantly larger, according to a new report by Trepp LLC, an analytics firm.

Six community banks have issued stand-alone debt deals in recent months, with another three weighing their options, the WSJ reported last month. They were able to issue bonds for the first time after receiving an investment-grade rating by Kroll Bond Rating Agency Inc., whose involvement was critical because many investors won’t buy unrated debt.

All told, about 20 community banks will have an investment-grade rating from Kroll by the end of October.

Read more at the Wall Street Journal

Bank Financing for Contingency Fee Law Firms

Financing has always been a hurdle for most contingency fee practices. An active plaintiff firm may have hundreds of thousands or even millions of dollars tied up in case costs at any given time. These costs typically don't have favorable tax consequences.

Many plaintiffs' firms may turn away good cases, because they need all of their existing capital to adequately fund existing cases. Subsequently there may be less capital to fund firm expansion.

Self Funding

Most contingency fee firms fund their case costs directly out of firm revenues. This depends on the uncertain cash flow typical with most plaintiffs' firms. Self-funding ties up a large portion of a firm's capital. It leaves the firm in a tight financial situation if cases don't end as planned.  Furthermore, litigation costs paid directly out of firm earnings result in nondeductible, interest free loans to clients made with the firm's after-tax dollars. 


Borrowing to invest in your firm can add to the profitability and value of your firm, provided you can use the borrowed funds for activities to generate new business or finance litigation costs of a larger caseload, or for investments in technology, training and human resources necessary to be a more efficient, effective and profitable law firm.

Bank Financing

Let's face it...traditional bank case financing all but dried up during the Great Recession. However MidSouth Bank has recently developed a loan product perfectly designed for contingency fee law firms.

Attorney Client Loans

Attorney Client Loans from MidSouth Bank are a way to help personal injury attorneys like you streamline financing your client expenses. We know your clients depend on you to get them the compensation they deserve, and we want you to know you can depend on us to help provide you with the cash flow you need.

We make sure you:

Have the cash you need to grow your practice

Immediately can focus on building your case

Can reduce your out-of-pocket expenses

May be granted extended time to pay the loan back in the event your case exceeds two years

Contact us

Investing In Justice: Max Volsky


Alternative assets have become popular in recent years, mainly because they offer superior returns and are uncorrelated to traditional markets. Legal finance – also called lawsuit funding, lawsuit loans, pre-settlement funding, tort advances, plaintiff advances, litigation finance, litigation financing, litigation funding or dispute finance – refers to investments in lawsuits. Written by a renowned expert, Investing in Justice is essential reading for investors, consumers, lawyers, policymakers, business executives, and anyone who can benefit from having a clear and comprehensive framework for understanding this industry and its capacity to create more balanced and provident legal systems around the world. 

Max Volsky is a founding partner of Schmidt, Volsky & Perle LLP. A recognized expert in Russia and the former Soviet Union, Mr. Volsky’s transactional practice is dedicated to international commercial and business law, with an emphasis on cross-border M&A transactions in the Oil & Gas, Chemicals, Manufacturing, Retail, Banking and Finance industries. Mr. Volsky’s litigation practice focuses on international commercial arbitration in New York, London and Stockholm.


MidSouth Bank President & CEO Rusty Cloutier


One of the fastest growing community banks in the South, MidSouth Bancorp, Inc. has carefully executed a plan to meet the growing needs of its customers. MidSouth has also developed an attractive case finance product designed around the specialized needs of  law firms.

C. R. “RUSTY” CLOUTIER has served as President and Chief Executive Officer of MidSouth Bank, N.A. and MidSouth Bancorp, Inc. in Lafayette, Louisiana since 1984. MidSouth Bancorp, Inc. is a bank holding company headquartered in Lafayette, Louisiana with assets of $1.4 billion. MidSouth Bank has 40 locations in Louisiana and Texas.