Attorney Fee Deferrals

Benefits in High-Value Cases

Attorney fee deferrals provide a sophisticated planning mechanism that allows counsel to receive earned fees over time rather than in a single lump sum at settlement. When properly structured and coordinated with tax professionals, fee deferrals can offer meaningful financial advantages, including income smoothing, tax deferral potential, and enhanced long-term wealth planning for law firms and individual practitioners.

In high-value cases, fee deferrals can be particularly powerful, helping attorneys manage cash flow, align compensation with broader investment strategies, and mitigate the impact of receiving a large one-time payment in a single tax year. They can also be structured in a way that mirrors the client’s settlement, creating consistency and cohesion in the overall case resolution.

Successful fee deferrals require careful design, strict compliance with IRS guidelines, and seamless coordination among counsel, tax advisors, and structured settlement professionals. This guide examines how attorney fee deferrals function in practice, when they make sense strategically, and the key considerations every attorney should evaluate before implementing one.