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