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Traditional Structured Attorney Fees with Life Contingency Payments

Bet On Your Health!

A pre-tax and tax-deferred attorney fee structure offers great benefits to attorneys who earn contingent legal fees.  In essence, it is an unlimited retirement investment vehicle exclusively for attorneys.  Using annuity based fee structures, an attorney can get a guaranteed competitive fixed rate of return.  The returns are typically similar to other fixed instruments such as bonds.  However, there are ways to boost return by using a life contingent plan.

The traditional attorney fee structured settlement has a fixed payment stream.  The payment is guaranteed for the term of the contract.  However, when you have a life contingent component you add in a variable element.  It is not variable like the returns on a stock.  The variable is your ability to outlive the insurance company’s life expectancy.  The longer you live, the greater the ultimate return.

The pricing methodology for an annuity is based upon the guaranteed payment stream coupled with the mortality tables.  To illustrate this point, an attorney can defer $375,000 into a traditional structured settlement.  Let’s assume the payment stream selected is for life with a 20 year guarantee.  Let’s also assume for easy math the payment is 2,000 per month.  In order to figure out the rate of return, we typically look at the following:

  • Rate of Return Worst Case Scenario (Only 240 Payment are Made) –        2.6%
  • Rate of Return at 30 years (the last 10 years were not guaranteed) –        5.0%
  • Rate of Return at 40 years (the last 20 years were not guaranteed) –        5.7%

For an extremely healthy client with a family history of longevity, betting on your own life expectancy can create a much higher rate of the return.  By analyzing the impact of the guarantee periods in a traditional structured settlement, you can look at the option of taking on more life expectancy risk to create the potential for higher returns.  This is accomplished by potentially using a shorter guarantee period and betting on a longer life expectancy.  In the above scenario, the attorney’s rate of return will be between 2.6% and 5.7% depending on how long they live.

No matter what, it is still a conservative approach to investing by using a fixed annuity.  With proper planning, you can do the assessment with your settlement planner on what guarantee periods make sense for you and your family.  There is risk in all investments.  Using a fee structure annuity with a lifetime component is something every attorney should consider in their retirement planning.  The proper investment and product allocations will ultimately determine the success of your retirement plan.  You should consider all the options for deferring attorney fees as part of your retirement plan.

Synergy offers unique solutions for trial lawyers to invest their fees on a pre-tax and tax-deferred basis.  Visit for more information.


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“Synergy is our guiding light for deferring our contingent legal fees and planning for retirement. The lawyers at Panter Panter & Sampedro, myself included, have been working with them for over ten years using different methods to defer comp and plan for retirement.”

Brett Panter
Panter, Panter & Sampedro

"I don't think I've directly said "thank you" for helping us with Bridgett’s case. We sent the reduced payment to Medicaid and called Bridgett's mom to tell her approximately how much money was going to be left for Bridgett and she broke down over the telephone. Given only $25k of insurance and a $850k medical bill from the hospital she didn't think Bridgett would ever see a penny."

Tom L. Copeland
Jeffrey Meldon & Associates, P.A.

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