Settlement Distribution Statement

Settlement Distribution Statement

Produces the final financial accounting of PI settlement proceeds — gross recovery through all deductions to net client payout — for client delivery, trust accounting compliance, and regulatory review.

Prerequisites

Gather before drafting:

• Executed settlement agreement (gross amount, allocation terms)
• Fee agreement (contingency %, sliding scales, caps, cost-advancement terms)
• Litigation cost ledger (date, vendor, description, amount per item)
• Lien resolution summary (original claim, negotiated amount, payment instructions per lienholder)
• Trust account confirmation (funds cleared and available)
• Client payment instructions (delivery method, split directions)

Distribution Table Template

SETTLEMENT DISTRIBUTION STATEMENT
Matter: [Client Name] v. [Defendant(s)]
Matter No.: [#]
Date of Settlement: [Date]
Date of Statement: [Date]

ITEM                                          AMOUNT
─────────────────────────────────────────────────────
Gross Settlement Proceeds                 $__________

DEDUCTIONS:
  Attorney's Fees ([__]% per Fee Agreement
    dated [Date], ¶[__])                 ($__________)
  Litigation Costs (see Exhibit A)       ($__________)

  Lien Satisfactions:
    [Provider 1] — [type]               ($__________)
    [Provider 2] — [type]               ($__________)
  Subtotal Liens                         ($__________)

  Other Deductions:
    [Co-counsel referral / case funding] ($__________)

TOTAL DEDUCTIONS                         ($__________)
                                          ───────────
NET TO CLIENT                             $__________
═════════════════════════════════════════════════════

Exhibit A — Litigation Costs

Output Format

Formal letter on firm letterhead addressed to client (full legal name, current address).

Workflow

- [ ] Extract gross amount, fee terms, all costs, and all liens from source documents
- [ ] Calculate attorney fees per fee agreement (verify %, base, caps, sliding scales)
- [ ] Sum all deductions; compute net to client
- [ ] Reconcile: Gross = Total Deductions + Net to Client (must balance to the penny)
- [ ] Draft statement using template
- [ ] Attach cost breakdown, lien satisfaction letters, fee agreement excerpts
- [ ] Include payment delivery details (check #, wire confirmation, dates)
- [ ] Verify no bracketed placeholders remain in final output

Critical Checks

• Reconciliation is mandatory — flag any discrepancy before finalizing; every dollar must be accounted for
• Lien completeness — cross-check every lien from resolution summary appears in statement; a missing lien exposes client to future liability
• Fee agreement fidelity — apply the exact contracted percentage/rate; honor all caps, sliding scales, and special provisions
• Plain language — avoid jargon the client won't understand; add brief context for each line item
• Ethical compliance — satisfy Rules of Professional Conduct re: client property (Model Rule 1.15), trust accounting, and fee transparency
• Tax awareness — flag structured or allocated amounts the client should discuss with a tax professional; do not provide tax advice
• Confidentiality — if delivered electronically, note document should be encrypted with password communicated separately
• Retention — flag for archival per firm policy for applicable statute of limitations plus professional responsibility retention period