Professional services
Law Firm Settlement Net Calculator
Works the net from a settlement, where the deductions have an order.
Result
Business arithmetic for running a practice, not legal advice. Fee agreements, contingency limits, trust accounting and fee splitting are governed by the rules of professional conduct in your jurisdiction, and several of them are strict. Check the applicable rules before any of this affects a client agreement. A distribution statement is a formal document with specific requirements in most jurisdictions, and the client must receive and usually sign it. Lien resolution is a specialised area: statutory liens, ERISA plan claims and Medicare or Medicaid interests each follow different rules, and getting them wrong creates personal exposure.
Get a Free Business AuditHow the calculation works
Gross recovery less the fee, less costs advanced, less liens and third-party claims, gives the client's net. The order of those deductions is set by the fee agreement rather than by convention, and it changes the result, which is why the agreement has to state it and the disbursement statement has to show it.
What moves the number
- Fee and the order in which it is taken.
- Costs advanced during the matter.
- Medical, insurer or statutory liens.
- Whether any lien can be reduced.
Where this one goes wrong
Settlement funds are client property on receipt and must be held in a client trust account until disbursed, against a written statement showing the full calculation. That is a conduct requirement, not a formality, and disbursing from commingled funds is a violation even where every figure is right. Liens are where the client's net is actually decided and where the most value can still be added, since reduction negotiations frequently succeed and go straight to the client.
Before you quote
- Hold funds in client trust until disbursement.
- Negotiate liens before disbursing.
- Provide a written statement showing every deduction.
Where the rules come from
Questions
About this calculator
Does the order of deductions matter?
Yes, and it is set by the fee agreement rather than by convention. Taking the fee before or after costs changes the client's net, which is why the agreement has to state it and the disbursement statement has to show the full calculation.
How must settlement funds be held?
In a client trust account separate from firm funds until disbursed, with a written statement showing the calculation. Disbursing from commingled funds is a conduct violation even where every figure is correct, and the handling is not discretionary.
Where can the client's net still be improved?
Liens. Medical and insurer claims in particular are frequently negotiable, and every dollar of reduction goes straight to the client. It is usually the highest-value work left at the end of a matter and it is often skipped.
The formula
client net = settlement - attorney fee - costs - liens after reduction - advances
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How to use this calculator
- Gross settlement ($). Enter your own figure; the page starts at $150,000.
- Attorney fee ($). Enter your own figure; the page starts at $50,000.
- Case costs ($). Enter your own figure; the page starts at $12,500.
- Medical liens ($). Enter your own figure; the page starts at $18,000.
- Lien reduction negotiated (%). Enter your own figure; the page starts at 25%.
- Other liens ($). Health plan, government, child support.
The result updates as you type, so you can try a figure, see what it does to client receives, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Gross settlement | $150,000 |
| Attorney fee | $50,000 |
| Case costs | $12,500 |
| Medical liens | $18,000 |
| Lien reduction negotiated | 25% |
| Other liens | $4,000 |
| Advances to the client | $0 |
What comes out
| Result | Value |
|---|---|
| Client receives main result | $70,000 |
| Medical liens after reduction | $13,500 |
| Saved by negotiating liens | $4,500 |
| Total deductions | $80,000 |
| Client share | 46.67% |
The client receives $70,000, 46.67% of the gross. Negotiating the medical liens down saved them $4,500, which frequently matters more to the outcome than the last few thousand of settlement value.
How sensitive the answer is
Holding everything else steady and changing only gross settlement, this is what happens to client receives. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Gross settlement ($) | Client receives |
|---|---|
| $75,000 | -$5,000 |
| $112,500 | $32,500 |
| $150,000 example above | $70,000 |
| $225,000 | $145,000 |
| $300,000 | $220,000 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Gross settlement ($)
- A money amount, starting at $150,000.
- Attorney fee ($)
- A money amount, starting at $50,000.
- Case costs ($)
- A money amount, starting at $12,500.
- Medical liens ($)
- A money amount, starting at $18,000.
- Lien reduction negotiated (%)
- A percentage, between 0 and 100, starting at 25%.
- Other liens ($)
- Health plan, government, child support.
- Advances to the client ($)
- A money amount, starting at $0.
What the results tell you
| Result | What it is |
|---|---|
| Client receives | The headline result. A money figure. |
| Medical liens after reduction | A money figure. |
| Saved by negotiating liens | A money figure. |
| Total deductions | A money figure. |
| Client share | A percentage. |
Keep going
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