Settlement Tools for Small and Midsize Law Firms
The team at Milestone knows what it’s like to be a boutique company with the practicing power of one that’s much larger. Owners of small to midsize law firms know what we’re talking about. Providing your clients with personal attention along with expert knowledge and service. Knowing your employees well and working in a collaborative environment. But if you own a boutique law firm and are looking to take your firm’s settlement planning to the next level, you might wonder if the same tools that large firms use are available to you. The answer is yes.
The qualified settlement fund, or QSF, is a tool that you may be familiar with. It is essentially a fund that receives a defendant’s settlement payment in order to release them from a case. A QSF trustee then holds the settlement proceeds until the plaintiff and his or her attorney have adequately planned for the monies and are ready to receive them.
Many large law firms establish firm-wide QSFs to manage their settlements in an efficient, sophisticated manner. Established by a single court order, a firm-wide QSF stays open for the entire firm to use for an unlimited number of cases. Firm-wide QSFS allow for greater flexibility than an individually-ordered QSF for single claimant or multiple claimant cases. But firm-wide QSFs are not just available to big law firms. In fact, there is no reason why small and midsize law firms cannot have their own fund to unlock this level of settlement planning.
While a QSF gives plaintiffs time to consider their settlement planning options, the extra time also allows trial lawyers the opportunity to explore attorney fee deferral options for their own wealth planning. Fee deferral is an investment strategy that allows an attorney to decide how and when they receive their fee from a case. They can invest and receive their money over time, which offers tax advantages and income control. Any contingency attorney fee for physical or non-physical injury tort settlement is eligible to be deferred through the feeMaster program. Once funds are settled into the firm-wide qualified settlement fund, attorneys have 100% income recognition, can choose how much of their fees they wish to accept as an upfront cash disbursement, and can determine how much and for how long they wish to defer.
As with QSFs, fee deferrals are not only for “white shoe” law firms. By utilizing in a firm-wide qualified settlement fund, solo practitioners and family law firms can access the most powerful financial tools available to trial lawyers. Any sized fee can be placed within a qualified settlement fund (there are no minimums or maximums), and multiple fees can be pooled together for a single deferral strategy. At Milestone, we regularly set up these arrangements for smaller law firms and sole practitioners.
What it all boils down to is this: qualified settlement funds and fee deferrals are the premier tools for law firms in the 21st century – no matter their size. The additional planning time they afford can be a great benefit to both trial attorneys and their clients. If you’re interested in learning more about this option, give Milestone a call.