Interest Rates, Schminterest Rates

While speaking with the head of a trial lawyers organization recently, the topic of interest rates, of course, came up. He said that, although happy to hear that I'm busier than ever, he was shocked to hear it because interest rates are so low. He couldn't believe that attorneys would be calling me to help any of their clients, except the most traumatically injured. He thought it might be helpful to show other attorneys that they may really be missing the boat in not having their clients meet with me to hear about structures. To injured folks and their families, brace yourself, it's not about the interest rates!

Injured folks and their families are not lottery winners. Most of them are not independently wealthy. You and I, as business owners who make a nice living, are considered to be in the "accumulation" phase of our investing life. The majority of your clients, because they've gone through some traumatic event that brought them to you, have been thrust into the "payout" phase. Most of your clients are now either not able to work, or are not able to work to the level they did before. Either that, or they have just found themselves to be widows or widowers, supporting themselves and their families on just one income. In the "payout" phase, it's not about growth, it's about conservation.

This is where those of you who are waiting for interest rates to rise before bringing me in to educate your clients are inadvertently dropping the ball. You say you don't want them to lock-in low interest rates so that they have the chance to "do better" than they will if they structure. The statistics for people blowing their settlement funds in a short time is staggering. You all have numerous stories of people who didn't structure and are now broke, and are often doing worse than before the lawsuit. So, for the "chance" to do better, the majority end up doing much worse. It's a double tragedy. When the markets tanked in the winter of 2008 and 2009, most of those who worked on Wall Street lost not only their own money, but much of their clients' money. They are trained professionals and they lost millions. Keep in mind, however, that they lost money for people that are able to wait for the markets to recover. Your clients don't have that luxury. If the Wall Street professionals can't keep their clients' portfolios from vaporizing, what chance does your client really have?

When my structured settlement clients call in for various things over the years, I ask them if they are happy they structured. Do they love it, are they happy they did it, and do they know that most attorneys aren't giving their clients the chance to hear about them? You know what they say? A resounding "yes" they love it, and "yes" they are happy they did it, and "whaaaat?!" They are astounded that some attorneys aren't giving their clients a chance to even hear about a structure. Across the board they say, "I'm glad my attorney gave me the chance to learn about it!" Regardless of their education, level of "sophistication," or socioeconomic standing, they love their structures.

Did you know that injured folks and their families look at the bottom line when determining whether or not to structure? They look at the numerous illustrations I build for them, and they see, for example, that they put in $750,000 and they get $1,100,000 guaranteed over their lifetime, and possibly even $1,350,000 if they live their normal life expectancy. They see the word "guaranteed" and they see that it will continue as long as they are living and they are thrilled! People see that and they like it. It brings them peace. They consistently smile and say "I feel so much better. I was so worried that I would run out of money." In the majority of my meetings with families, they don't even ask what the rate of return is, let alone anything about interest rates. They see that they can spend X and they get Y. And , they still have a chunk left in cash to pay off debt, have cash in the bank, and buy other things they wanted. Up-front cash plus a structure equals peace-of-mind for your client. It's just that simple.

Who knows how long this low-interest environment will last? None of us can say. I know you all care deeply about your clients and want what's best for them. I wanted to take up the challenge of my trial lawyer president friend who said, "Show us, Kelly. We want what's best for our clients." Your client shouldn't structure their entire settlement, but I can tell you that most of your clients would structure a good chunk of it. Give them the chance to let me teach them about it. If they say "no," which most of them won't, at least it's an educated "no." Your clients are not in the "accumulation" phase, they are in the "payout" phase. They need security. They need a structure.

Kelly Ramsdale is President of Kelly Ramsdale & Associates in Denver, Colorado. She advises plaintiff attorneys and their clients in medical malpractice, wrongful death, products liability, aviation, auto bodily injury, trucking cases, sexual molestation/assault, sexual harassment and "me too" settlements, civil rights and wrongful termination/age discrimination cases. She travels extensively to not only attend mediations, but to personally meet with the injured parties and their families all over the United States. She has been involved in the US Gymnast sexual assault cases, the Purdue Pharma class action cases, the Columbine High School cases, the 9-11 Victims' Compensation Fund and Pan Am Flight 103 (Lockerbie) cases. She works with many highly renowned firms across the country.