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June 30, 2008

Structured Attorney Fees... Is What Website Is Saying Constructive Receipt?

by John Darer CLU ChFC CSSC RSP

A treatise on Attorney Fee Structures by attorney Richard B. Risk, JD, CSSC is posted on the Structured Settlement Services website by his son Robert Risk, CSSC a settlement planner out of Tulsa Oklahoma.

Richard B. Risk, Jr. JD, CSSC, and Robert Risk by publishing the information, suggest that there are advantages of "converting an attorney fee receivable" into a deferred compensation plan.

BUT, can an attorney actually convert a receivable into a deferred compensation plan by structuring such fees? I submit to you that he/she cannot under such circumstances and THAT makes the entire Structured Settlement Services, LLC posting er... Risky Business!

The operative question is "when is a receivable created?".  In the typical personal injury contingency case there is no "receivable" until you win or settle the case, because the attorney can lose the case and get nothing. The attorney can win and lose on appeal and get nothing.  If  the attorney's client has signed a release and the law firm is simply waiting to get paid I submit that there is a receivable created and that the lawyer cannot structure the attorney fees.

Consider the following:

The Business Dictionary definition of "Accounts Receivable"

Sales made but not paid-for by customers (trade-debtors). Accounts receivable are shown as current (short-term) assets in a balance sheet and are, in fact, unsecured promises by customers to pay in the future. These sums are a key factor in determining a firm's liquidity and may be discounted—used in raising a short-term bank loan, or sold to a factor. A provision is usually made in the accounts of a firm to offset uncollectible accounts receivable as losses.

The Accountingcoach .com definition of "Accounts Receivable" is a current asset resulting from selling goods or services on credit

Business Dictionary definition of "Receivable"

Accounting term for amount due from a customer, employee, supplier (as a rebate or refund), or any other party. Receivables are classified as accounts receivable....and represent an asset of the firm!

 

If you are a plaintiff attorney or trial lawyer and wish to structure your fees be careful!

More on structured attorney fees

Where professional malpractice can turn on a single word, settlement consultants should avoid using financial terms unless they are sure of the definition.
 

 

 

 

Posted at 01:39 PM in Constructive Receipt, Constructive Receipt Structured Settlements, Financial Literacy, Misinformation About Settlement Planning, Misinformation About Structured Settlements, Oklahoma Structured Settlements, Richard B. Risk, Jr. | Commentary About Dick Risk and his Positions, Settlement Planning Issues, Structured Attorney Fees, Structured Settlement Definitions, Structured Settlement Tips For Lawyers, Structured Settlements, Tulsa Structured Settlements |

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