If you are an attorney who is looking to defer your legal fees to future tax years to save on income taxes and plan for retirement, here is an important tip: Add some language to your template fee agreement with your clients that allows for you to receive your legal fee over time, rather than receiving your entire contingent fee at the time of settlement.
Take note that this is not a requirement. However, we believe it is best practice to make sure that your agreement with your client — and therefore, your representation of that client — is as clean as possible from the very beginning.
So, if you are considering an annuity-based fee deferral or a deferred compensation plan, please reach out to us. We can send you some template language that you can include in your template retainer agreement with your client that allows for you to take your fee over time, rather than taking all of it at the time of settlement.
If you have any questions about the language we talked about above, or if you would like that sample language, give us a call or send us an email.