Why do so few lawyers know about structured attorney fees?

In this wrap up interview and discussion on the month long topic of structured legal fees, Mark Wahlstrom and Randy Dyer sit down to look at the issues facing the structured settlement industry in it's attempts to increase the number of structured attorney fees written. Randy Dyer

As this series has discussed in various ways, structured legal fees are with out a doubt one of the single most unique and valuable tax and financial planning benefits available to trial lawyers. These financial plans in which a lawyer is able to legally, safely and securely design a guaranteed cash flow program that defers taxes into future years are still widely unknown and misunderstood by trial lawyers and tax professionals.

In today's discussion, Mark and Randy look at the reasons why the structured settlement profession has done such a poor job of educating lawyers and their tax professionals on how these work, as well as the impact of the economy and tax rates on lawyers decisions to structure their fees. Some of the items covered are:

  • The impact of current tax rates and the fear of higher rates in the future.
  • The collapse of the legal finance and lending market and the largely unreported story of how this has dried up sources of capital and fee planning for trial lawyers.
  • The horrible job the industry and brokers do promoting the concept to tax professionals.

As I will be doing a series for the rest of the summer on new sales ideas for settlement professionals, you can rest assured a big part of it will reside on the ideas and methods to increase structured legal fees. We as professionals have to stop looking to NSSTA, SSP and our general agents for advice and instead share our experience on what is working so that solid and sound concepts can be promoted nationally. A rising tide lifts all boats and if more brokers are offering and selling legal fees as part of their practice, then it naturally follows that more Lawyers will hear about it and start to follow suit. There is no grand plan, just hard work, effective communication and consistent explanations on how they work and why they need to be considered. 

 ( Mark Wahlstrom is the host of The Settlement Channel and is generally considered to be the nations leading expert in Structured Settlements, Settlement Planning and Structured Legal Fees.)

Structured settlements, still your best option.

In this weeks edition of Speaking of Settlements, Mark Wahlstrom discusses the various options available to trial lawyers and their clients when deciding where to put their settlement proceeds. Over the last 30 years one choice has stood the test of time, a structured settlement, and with today's exceptionally unstable economy and week financial markets the structured settlement annuity looks better and better.

The fact is we are looking at a mortgage crisis that has caused massive instability in financial institutions in the US, with bank failures escalating sharply, real estate plunging in value, commercial lenders and brokerage houses scrambling for cash in the face of liquidity needs and plunging asset values, and now the looming monetary inflation that will pound long term bond holders.

In this video Mark goes over the benefits of a structured settlement annuity in these troubled times and compares it to most of the other financial options available to the average citizen attempting to use their settlement wisely.

Check out this video and watch for each weeks edition of Speaking of Settlements.

Structured legal fees, will the Vioxx cases be a boom or bust?

In what is shaping up to be a significant transfer of assets from Merck to the legal community, both defense and plaintiff attorneys I might add, the recent Vioxx settlement is touching off a mad scramble among banks, investment firms, legal lenders and others interested in invested those funds.

I've already seen press releases from legal finance firms offering bridge loans and financing at preferred rates to trial lawyers with large Vioxx case inventories, a flood of articles and solicitations by structured settlement firms for attorneys to structure their fees as well as traditional banks and brokers angling for the tax planning and investment windfall.

However, as Lee Corso of ESPN College football often says, " Not so fast my friend!".

If you take a look at the actual numbers and what the dynamics have been of this case it is pretty obvious the big money in the investment community is going to be made by legal finance companies who will advance fund the attorneys who stand to make big pay days on their inventory of cases, but might have to wait anywhere from 6 months to a year or longer for those funds to actually get paid. I don't think most people realize just how far into this case a lot of firms are financially and many are hanging on by their finger nails.

While it would make incredible sense for most trial lawyers in Vioxx to structure their legal fees and spread the tax hit out over several years, the reality is that most need the money now, tax consequences be damned. Other then a relatively small group of attorneys at the top levels of this litigation who stand to make considerable money the majority of firms around the country will be happy to collect their funds, in advance from a legal finance firm, and be rid of this litigation disaster that threatened the viability of many of their firms.

However, if you are one of the attorneys who is interested in structuring your legal fee, you absolutely must get with a qualified structured settlement brokers soon to begin mapping out a plan of action for your fee structure. There are sure to be a lot of dynamics at work here, among them attempts by banks and brokers to retain control of the assets as well as efforts by various structured settlement firms to control who writes the annuities. There is a long way to go in this case and as such you need to start gathering information now and making plans.

If you are a financial professional awaiting an investment windfall you better be working with some of the select guys at the top or I'm afraid you will be staring at a rather small net amount once this all gets paid out and disbursed.