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

| Date | Vendor/Payee | Description | Amount |
|------|-------------|-------------|--------|
| | | | |
| | | **Total Costs** | **$____** |

## Output Format

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

| Section | Content |
|---|---|
| **Opening** | Acknowledge resolution, transition to financial accounting (2-3 sentences) |
| **Distribution Table** | Completed template above |
| **Payment Details** | Check number/wire confirmation, delivery method, expected date |
| **Attachments** | Cost breakdown, lien satisfaction letters, fee agreement excerpts |

## 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