Brandon Burke It’s 4:45 on a Friday and the adjuster calls your case manager with a number. The attorney on the file is in a deposition. The client has been waiting months to hear anything. What happens next decides whether the firm has met its ethics duties and whether the client feels heard.
Here is the short answer. To communicate a settlement offer to a client, get every offer to the client promptly. Explain it well enough for the client to decide, and record what they decide in writing. Under the ABA’s version of the rule, the one exception is when the client has already told you how to handle that offer. The client makes the decision, not the firm.
What the rules require when an offer comes in
The decision to settle belongs to the client. The ABA Model Rules make that a black-letter rule, and the duty to communicate offers follows from it.
A lawyer shall abide by a client’s decision whether to settle a matter.
ABA Model Rule 1.2(a)
The specific duty to pass offers along sits in different places depending on where you practice. The California State Bar’s summary of its own rule notes that “The ABA Model Rules have no black letter rule on a lawyer’s duty to communicate settlement offers.” The ABA puts that duty in a comment to Rule 1.4. Some states, including California and DC, put it in the rule itself.
| Rule | What it says | What it means for your firm |
|---|---|---|
| ABA Model Rule 1.2(a) | “A lawyer shall abide by a client’s decision whether to settle a matter.” | The client decides. Your role is to advise. |
| ABA Model Rule 1.4(a)(3) and (b) | Keep the client reasonably informed about the status of the matter. Explain a matter “to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” | Passing along a number is not enough. The client needs enough context to decide. |
| ABA Model Rule 1.4, comment 2 | A lawyer who receives a settlement offer “must promptly inform the client of its substance” unless the client gave advance instructions. | Every offer goes to the client unless you have documented instructions covering it. |
| California Rule 1.4.1 | Requires prompt communication of “all amounts, terms, and conditions of any written offer of settlement made to the client.” | The duty is in the black-letter rule and covers all terms, not just the amount. |
| DC Rule 1.4(c) | A lawyer who receives an offer of settlement in a civil case “shall inform the client promptly of the substance of the communication.” | Same duty, written into the rule. |
| ABA Model Rule 1.8(g) | Aggregate settlements for two or more clients need each client’s informed consent “in a writing signed by the client.” | Multi-client offers carry extra disclosure and signature steps. |
States vary in wording, exceptions, and comments. Check your own state’s version of Rule 1.4 and any separate settlement-offer rule before you build a firm policy around these examples.
Which offers count, and how fast is “promptly”
The ABA comment covers “an offer of settlement in a civil controversy” from opposing counsel. An adjuster’s offer before suit is still a development the client needs to hear about under Rule 1.4’s duty to keep them informed. No rule sets a minimum offer size. A low offer you expect the client to reject is still an offer, and the client still decides.
California’s rule text covers written offers. Its comment adds that an oral offer in a civil matter “must also be communicated if it is a ‘significant development’ under rule 1.4.” In practice, the safest habit is to treat every oral offer as one the client needs to hear about. A phone call from an adjuster on a Friday afternoon counts.
Watch for offers that skip the firm. If an adjuster contacts your client directly with a number, the client will ask you about it. Treat that as an offer your team needs to log, explain, and respond to like any other.
None of these rules defines “promptly” in hours or days. That gap is where firms get into trouble, because each person on the file fills it in differently. Set an internal standard, such as logging the offer the day it arrives and reaching the client within a window you choose. Make clear that the window is your firm’s own policy, not a number the rules give you.
What to include when you communicate a settlement offer to a client
Rule 1.4(b) asks you to explain the offer well enough for the client to make an informed decision. A message that says “they offered [amount], we think it’s low” doesn’t meet that bar. Each element below answers a question your client is going to ask anyway.
| Element | Why it matters | Client question it answers |
|---|---|---|
| The amount | It is the headline, and the client will anchor on it. | “How much did they offer?” |
| Terms and conditions | A release, confidentiality term, or payment condition can matter as much as the number. | “What do I have to agree to?” |
| Deadline | Some offers expire. The client needs time to think and ask questions. | “How long do I have?” |
| Estimated net to the client | The gross figure is not what the client receives. Fees, costs, and liens come out first. See how attorney fees come out of a settlement. | “What would I actually get?” |
| Your recommendation and reasons | The client hired you for judgment. Give it, with the reasons behind it. | “What do you think I should do?” |
| What happens if they say no | Rejection usually means more negotiation, more time, or trial. Describe the path without predicting an outcome. | “What if I turn it down?” |
| Who decides | Say plainly that the decision is the client’s. | “Is this up to me?” |
Label the net figure as an estimate. Liens and final costs can change before disbursement, and the client should know that before they rely on the number.
A sample offer message
Here is a written summary your team can adapt. It works best as a follow-up to a phone call on a significant offer, or as the first touch on a smaller one with a call offered.
Subject: Settlement offer in your case, decision needed by [deadline]
Hi [Client first name],
We received a settlement offer from [insurer or opposing party] on [date]. The offer is [amount].
The main terms are [summary of release, conditions, and payment timing]. The offer is open until [deadline].
After our fee, case costs, and known liens, we estimate you would receive about [estimated net]. This is an estimate, and the final figure can change once liens are confirmed.
Our recommendation is to [accept / reject / counter at amount], because [two or three plain reasons].
If you decline, here is what usually comes next: [further negotiation, filing, or trial timeline in general terms].
This is your decision. We will follow your instructions either way. Please reply here or call me at [phone number] so we can talk it through.
[Attorney name]
Keep the placeholders until you have real figures from the file. Never send an estimated net you haven’t checked against the fee agreement and the lien list.
When the client has given you standing authority
The ABA comment has an exception. You don’t have to relay an offer if the client “has previously indicated that the proposal will be acceptable or unacceptable or has authorized the lawyer to accept or to reject the offer.” That is the “reject anything under [amount]” instruction many clients give early in a case.
Use that exception carefully. Get the instruction in writing, in the client’s own words, with the amount and any conditions. Revisit it when the case changes, such as after new medical records or a change in liability. An instruction given early in a case may not reflect what the client wants later.
Not every state carries that exception into its rule. California’s Rule 1.4.1 and DC’s Rule 1.4(c) both state the duty to communicate offers with no advance-instruction exception in the rule text. DC’s comment adds that “Even when a client delegates authority to the lawyer, the client should be kept advised of the status of the matter.”
The practical rule for most firms is simple. Even when you have authority to reject, tell the client the offer came in and what you did with it.
Recommending is your job. Deciding is theirs.
Rule 1.2(a) gives the client the settlement decision. Rule 1.4(b) requires you to explain enough for that decision to be informed. Together they mean you should give a clear recommendation, then step back.
Clients often ask questions that push you to decide for them. Here is how to answer the common ones.
- “Is this a good offer?” Compare it to the case’s strengths, weaknesses, and costs going forward. Avoid promising that a later offer will be higher.
- “What would you do?” Give your recommendation and the reasons. Then say plainly that the choice is theirs.
- “What if I say no and the next offer is lower?” Be honest that it can happen. Describe the risks of continuing without predicting a result.
- “Can I take time to think?” Yes, within the offer’s deadline. Tell them the date and offer a follow-up call.
Document the decision every time. A short written confirmation of what the client chose, and when, protects the client and the firm. It also gives the next person on the file a clear record. Setting these expectations before the first offer arrives makes the conversation easier. Our guide on how to manage client expectations covers that earlier groundwork.
Offers that cover more than one client
When one offer resolves claims for two or more clients you represent, Rule 1.8(g) adds requirements. A lawyer “shall not participate in making an aggregate settlement of the claims of or against the clients … unless each client gives informed consent, in a writing signed by the client.” The rule also requires disclosure of “the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.”
ABA Formal Opinion 06-438 explains what informed consent requires here. Each client must be told:
- “the total amount or result of the settlement”
- “the amount and nature of every client’s participation”
- “the fees and costs to be paid to the lawyer from the proceeds or by an opposing party or parties, and the method by which the costs are to be apportioned to each client”
Standing authority doesn’t carry over here. The opinion says this consent “generally cannot be obtained in advance of the formulation of such an offer or demand.”
That means each client signs their own consent, not a reply to a group email. Rule 1.8(g) can apply when one firm represents several people hurt in the same incident and resolves their claims together. One example is family members injured in the same car. It also shapes how firms handle mass tort client communication, where many clients are waiting on the same negotiations.
A settlement offer process your team can follow
Offers usually come in to whoever answers the phone or opens the email. A written process keeps the firm’s duty from depending on who that person is.
- Log the offer the day it arrives. Record who made it, how it came in, the amount, the terms, and any deadline. Route it to the responsible attorney.
- Get the terms in writing. If the offer came by phone, confirm it by email with the adjuster or opposing counsel so the record is clear.
- Check the file for standing instructions. Look for any written authority to accept or reject, and check whether your state’s rule allows relying on it.
- Calculate the estimated net. Apply the fee agreement, case costs, and known liens. Label the result as an estimate.
- Form the attorney’s recommendation. The attorney on the file sets the recommendation and the reasons for it.
- Reach the client within your firm’s window. Call for significant offers, then send the written summary. For smaller offers, send the summary and offer a call.
- Record the client’s decision in writing. Capture what they chose, when, and any counteroffer amount they authorized.
- Respond to the other side within the client’s instructions. Then tell the client the response went out and what happens next.
If the client accepts, the next steps are the release and the disbursement. Our personal injury settlement guide covers how the overall process fits together, from the demand letter onward. For the habits that make every update land better, see our client communication best practices.
Where CasePulse fits
We built CasePulse as a client portal layer on top of the case management system your firm already uses. We work with Neos, Needles, LawBase, Litify, and Salesforce.
Your team can exchange messages with clients without leaving the CMS. The offer summary and the client’s reply stay in your CMS with the rest of the case. That gives you a written record of what the client was told and what they decided.
Our automated notifications trigger from case management actions, so a client can hear that negotiations have started before the first offer arrives. Clients choose whether updates come by email, text, or both. We don’t negotiate, value the case, or replace the attorney’s conversation about whether to accept. A significant offer still deserves a phone call. Our role is to make the written side of that conversation clear and easy to find.
See the full list on our features page. If you want to see how offer communication would work in your own CMS, book a demo.