ORIGINATOR PROFILE

Counsel Financial

Founded by attorneys in 2000, Counsel Financial is a specialty commercial lender that provides senior secured revolving lines of credit to law firms that maintain primarily contingent fee practices. Counsel Financial is a market leader in the law firm lending industry with more than $1.5 billion in working capital credit lines originated over its 16-year history. A revolving line of credit provides law firms with working capital to better manage their cash flow, so that they can fund case-related costs, cover operational expenses and grow their businesses while focusing on achieving the best results for their clients. Counsel Financial’s owners, directors and staff have more than 200 years of combined litigation experience.

Originator Highlights

  • A market leader in the law firm lending industry with more than $1.5 billion in working capital credit lines originated over its 16-year history.
  • Counsel Financial’s owners, directors and staff have more than 200 years of combined litigation experience.
  • Loans are full recourse and secured by a first priority lien on all assets of a law firm and a personal guarantee of at least one principal member.
  • Since 2009, the default rate of aggregate credit lines originated is 0.3% and of which two-thirds was recovered resulting in net losses of 0.1%.

Performance

Counsel Financial is a market leader in the law firm lending industry with more than $1.5 billion in working capital credit lines originated over its 16-year history. In 2009, Counsel Financial strengthened its underwriting and auditing guidelines to enhance its risk management process. Since that time, Counsel Financial has provided $650 million in working capital credit lines to law firms and has obtained annual cash repayments greater than 50% of the Company’s outstanding portfolio. The percentage of annual cash repayments demonstrates their borrowers’ robust ability to generate cash flow and paydown their line of credit. Counsel Financial’s current portfolio is approximately $200 million and the aggregate amount of the cash repayments is approaching $500 million. To date, total defaults amount to $3 million or 0.5% of the aggregate amount advanced by Counsel Financial over the eight-year period. Credit line default recoveries total over $2 million, which results in a net exposure of $1 million, or 0.2%, of the total working capital lines provided.

Diligence

Counsel Financial’s underwriting process includes an extensive on-site field examination, intensive case collateral appraisal, background check on the law firm’s principal members and a full credit write-up. Currently, less than 20% of all loan applicants are approved for a line of credit. Counsel Financial’s credit lines are full recourse, and are collateralized by a first priority lien on all assets of the law firm and a personal guarantee of at least one of its principal members. After a line of credit is established, Counsel Financial regularly monitors the financial condition of its borrowers and the value of the collateral. Counsel Financial’s in-house financial and legal auditors are trained to detect early signs of fraud and case collateral deterioration. There is also a credit and collateral monitoring system in place that is designed to identify weakness in the borrower’s business and collateral that secures the loan. The system provides Counsel Financial with the ability to actively monitor its loan portfolio and several important metrics including case performance, budget compliance, credit files, case collateral updates and other customized reports. This allows Counsel Financial to promptly respond to loan inquiries thus enhancing its credit monitoring, risk management and decision making processes.

Management

Joseph DiNardo, JD

Director & Founder

Joseph DiNardo practiced mass tort and personal injury law for more than 26 years and was featured in the publication “Best Lawyers in America” on several occasions. During his extensive trial career, he represented thousands of injured plaintiffs and obtained numerous multi-million dollar settlements and awards. Mr. DiNardo has also lectured for the New York State and American Bar Associations and the New York State Trial Lawyers Association.

Paul Cody, CPA and MBA

President

Paul Cody is a certified public accountant licensed in New York State and has over 25 years of experience in the private equity and financial services areas. Prior to joining the Counsel Financial as its top executive officer, Mr. Cody was a general partner and Chief Financial Officer of Seed Capital Partners, a private equity fund with a focus on early stage investments, and at JoRon Management, a closely held private equity fund with investment interests ranging from non-recourse plaintiff funding to commodity-based financial products. In that capacity, he oversaw portfolio investment activities, led dozens of complex equity and debt transactions, and frequently assumed operating roles within portfolio companies. Mr. Cody began his career with KPMG LLP, one of the world’s largest accounting firms. He has been a recipient of Business First’s “40 under 40” Award in recognition for his record of professional success and community involvement.

Megan Payne, MBA

Chief Operating Officer

Megan Payne oversees underwriting and general operations of Counsel Financial. She reviews and analyzes new loan applications as well as manages the relationships with current clients and leads. Ms. Payne also plays an important role in developing strategic marketing plans for the company. Prior to joining Counsel Financial, Ms. Payne was employed at M&T Bank as a credit analyst and also as a commercial lender. While at M&T Bank, she was invited into their intensive Management Development Program—an exclusive training curriculum targeted at forthcoming business operations leaders.

Ryan Kagels

Chief Financial Officer

Ryan Kagels oversees all financial management and reporting for Counsel Financial, including investor relations, financial planning and analysis, budgeting, cash flow management and oversight of the accounting and risk management functions. Mr. Kagels has also been involved in deal structuring, diligence and negotiation with many of the company’s clients. With over 10 years of experience in specialty finance, he has been involved in the growth of the Counsel Financial since shortly after inception, previously working in various capacities, including as Vice President of Finance and Controller. Mr. Kagels also has knowledge and experience in the quick-serve restaurant business, successfully franchising several restaurants in the Western New York region.