Selling Some or All of Your Structured Attorney Fees
More and more legal professionals are choosing to structure their attorney fees. In the same way that you might win a structured settlement for your clients, you may choose to structure your fees into an annuity.
Left intact, structured attorney fees provide a steady stream of income that you can route to your personal accounts, your firm, or both. Because the payments get distributed periodically, it can help to provide cash flow in retirement while simultaneously shrinking your tax liability in your highest-earning years.
Some attorneys are best served by leaving their structured fees untouched through the years. But if you have this annuity established, you should know that it’s not your only option. You can also explore selling some or all of your payments if you need an influx of cash.
To help you determine which is best for you and your firm, let’s look more closely at this option.
Selling Structured Attorney Fees as Needed
As with all things in life, law firms can face unexpected changes. In those cases, attorneys may want to explore selling some or all of their structured attorney fees.
When an attorney needs to increase their available cash quickly, they can sell their structured fees the same way their client might explore selling their structured settlement.
It’s important to note here that as with your client, you don’t need to sell off the entire annuity. That’s a common misconception.
Instead, you have the option to sell only as many installments as you need to meet your current cash flow requirement. You can retain the rest of your scheduled payments to provide for yourself and/or your firm in the future.
Talking with an experienced annuity purchaser can help you evaluate your options and decide whether you would benefit from selling a portion or all of your structured attorney fees.
Case Studies: Preserving Cash Flow During the Pandemic and More
While law firms always deal with a level of uncertainty, the pandemic made things worse. With courts shut down and jury trials delayed — by a year or even two, in some states — attorneys still needed a way to pay their staff. We had several people approach us about selling a portion of their structured fees to bridge this gap.
With this option, they were able to free up the money needed to retain their talented teams. That ensured that as things have returned to normal, they have been quickly able to ramp up to full capacity.
We have also purchased structured fees to enable the attorney to:
- Fund class action lawsuits
- Finance larger office space
- Upgrade their business equipment
- Hire more staff
- Expand their business
All told, structuring your attorney fees allows you to provide for the future. Then, if uncertainty strikes, liquidating some of these payments can act as the boon you need. Whether you want a way to safeguard what you’ve built at your law firm or you need capital to take your business to the next level, you can achieve your goal by selling your structured fees.
As we mentioned before, this doesn’t mean you have to sell off the entire annuity. Our team at Strategic Capital can help you evaluate the situation at hand and determine the right course of action to provide the money you need now while protecting your future — and controlling your tax liability. To talk with us about your options, feel free to reach out to our experienced team.