Brandon Burke A settlement disbursement statement is the document that shows a client how a gross settlement became the check they actually receive. It lists the recovery, the attorney fee, case costs, liens, and the net amount to the client.
For personal injury firms, it’s also the moment a client’s trust gets tested. A client who agreed to a settlement figure months ago now sees a much smaller number. If nothing on the page surprises them, the statement is routine. If something does, the phone starts ringing. Here’s what the rules require, what belongs on the statement, and how to walk a client through it.
What the rules require
Most state ethics rules are based on the ABA Model Rules of Professional Conduct. States adopt their own versions, and some add their own closing statement requirements. Check your state’s rules for the specifics. The Model Rules set the general baseline.
ABA Model Rule 1.5(c) covers contingent fees. The agreement must be in writing and signed by the client. It must state how the fee is calculated, including whether expenses come out before or after the fee. When the matter concludes, the lawyer must give the client a written statement. That statement shows the outcome and, if there’s a recovery, the amount remitted to the client and how it was determined.
ABA Model Rule 1.15 covers safekeeping client funds. Under paragraph (d), a lawyer who receives funds a client has an interest in must promptly notify the client. The lawyer must promptly deliver the funds the client is entitled to. On request, the lawyer must promptly give a full accounting.
Paragraph (e) covers disputes. If two or more parties claim part of the funds, the disputed portion stays separate until the dispute is resolved. The claimants can include the client, the lawyer, or a third party such as a lienholder. The undisputed portion gets distributed promptly.
That last point answers a question clients ask often: can a lawyer hold my settlement check? A firm should hold back a disputed amount, such as a lien claim that hasn’t been resolved. It shouldn’t hold back money nobody disputes. The funds themselves sit in the firm’s client trust account until they’re disbursed.
This is general information, not legal advice. Your state bar’s rules control.
What goes on a settlement disbursement statement
Formats vary by firm, but most statements follow the same structure. Each line answers a question the client is likely to ask.
| Line item | What it shows | What the client usually wants to know |
|---|---|---|
| Gross recovery | The total settlement or verdict amount | Is this the number I agreed to? |
| Attorney fee | The fee percentage applied, and the resulting amount | Does this match what I signed? |
| Case costs | Filing fees, records requests, expert fees, and other expenses the firm advanced | What were these costs, and why were they needed? |
| Medical liens and health plan reimbursement | Amounts owed to providers, insurers, or government programs | Who are these people, and did anyone try to lower the amount? |
| Other deductions | Any remaining items the agreement or law requires | Why is this here? |
| Net to client | The amount the client actually receives | When do I get it? |
Every line should be specific. “Costs: $6,000” invites a call. An itemized list of costs does not. For a fuller picture of how a recovery gets divided, see how much lawyers take from a settlement.
Fee before costs or after: why the order matters
The signed fee agreement says whether the fee is calculated before or after case costs are deducted. The statement has to follow that agreement exactly. The order changes the client’s net amount, so it’s worth showing clearly.
Here’s a simple example. The numbers are round and purely illustrative, not a benchmark. Say a case settles for $90,000, the firm advanced $6,000 in costs, and the agreement sets a 33⅓% fee.
- Fee calculated before costs: The fee is 33⅓% of $90,000, or $30,000. Subtract the $6,000 in costs from the remaining $60,000. The client nets $54,000 before any liens.
- Fee calculated after costs: Subtract the $6,000 in costs first, leaving $84,000. The fee is 33⅓% of $84,000, or $28,000. The client nets $56,000 before any liens.
Same settlement, same costs, same percentage. The client’s check differs by $2,000. That’s why Model Rule 1.5(c) requires the agreement to spell out the method. It’s also why the statement should show the math, not just the result. A client who can follow the arithmetic line by line has little reason to doubt it.
How to walk a client through the statement
The statement itself is only part of the job. How the firm presents it determines whether the client signs with confidence or calls three times first.
- Preview the categories early in the case. At signing, tell the client what a statement will eventually include: the fee, costs, and any liens. Nothing on the final page should be a first mention.
- Send the statement before the meeting or call. Give the client time to read it alone. Questions come out better once they’ve seen the numbers.
- Explain each lien by name. Say who the lienholder is, what they paid for, and why they get reimbursed from the settlement.
- Show any negotiated reductions. If the firm got a lien or bill reduced, show the original amount next to the final one. That work often goes unseen unless the statement shows it.
- Get the client’s signature. Many firms, and some states, require the client to sign off on the distribution. A signed statement confirms the client reviewed it.
- Say when funds go out, and why any amount is held back. If part of the money is waiting on an unresolved lien, explain what’s pending and what happens next.
A client should never learn about a lien for the first time on the disbursement statement.
Common mistakes that cause client calls
Most post-settlement calls trace back to a few avoidable gaps.
Surprise liens. A client who never heard about a health plan’s reimbursement claim will see it as money taken from them. Mention likely liens as soon as the firm knows about them, and bring them up again as the case nears resolution.
Unexplained holdbacks. Holding back a disputed amount is proper. Holding it back without explanation looks like the firm is keeping the client’s money. Name the amount, the reason, and what has to happen before it’s released.
Silence between signing the release and disbursement. The client signs the release and expects a check soon. Then nothing happens for a while. Lien resolution, settlement funds clearing, and trust account processing all take time, but the client can’t see any of it. This stretch is a common source of “where’s my money” calls. How a personal injury settlement works walks through the payout steps. How long a personal injury lawsuit takes covers why post-settlement delays happen.
Vague cost entries. A single lump-sum cost line forces the client to ask. Itemizing answers the question before it’s asked.
Where CasePulse fits
The disbursement statement is one document, but the trust behind it is built over the whole case. It depends on whether the client heard about liens, costs, and timing along the way. CasePulse layers a client portal on top of the case management system a firm already uses. That includes Neos, Needles, LawBase, Salesforce, and Litify.
Clients can check case status anytime and receive automated updates as the case moves. Those updates can cover the quiet stretch between the release and the check. Firms and clients can exchange documents securely through the portal, and firms can collect client information with forms. CasePulse doesn’t prepare the statement, calculate fees, or handle trust accounting. Those stay with the firm’s own systems and staff. What it does is keep the client informed, so the statement confirms what they already expected.
See everything a CasePulse portal shows clients on the features page. Or get started with CasePulse to see how it fits your firm’s setup.