How Does Pre-Settlement Funding Affect My Attorney's Fees?

Pre-settlement funding repayment is separate from attorney fees. Both are paid from settlement proceeds, but they are independent obligations. Your attorney's contingency fee is not reduced by the funding repayment.

Attorney fees and pre-settlement funding repayment are both paid from your settlement proceeds, but they are entirely separate obligations calculated independently. Your attorney's contingency fee is a percentage of the gross settlement (typically 33–40%, depending on the case stage and jurisdiction) — this percentage does not change because you received a pre-settlement advance.

The disbursement order at settlement is typically: (1) medical liens, (2) attorney fees, (3) case expenses, (4) pre-settlement funding repayment, and (5) the remaining balance to you. The exact order can vary by state and by the specific terms of each agreement, but the key point is that all of these amounts come from the same gross settlement fund before you receive your net distribution.

What this means practically: taking a pre-settlement advance reduces your net take-home amount at settlement, not your attorney's fee. If your settlement is $100,000 with $33,333 in attorney fees and $10,000 in pre-settlement funding repayment, you receive approximately $56,667 (after other expenses). Your attorney receives their $33,333 regardless of the funding.

Some plaintiffs wonder whether their attorney's fee should be reduced to account for funding costs. This would need to be negotiated with your attorney directly and is not standard practice. The pre-settlement funding agreement does not affect the contingency fee agreement between you and your attorney.

Source: ABA Formal Opinion 484 (2019). Settlement disbursement order varies by state. Consult your attorney for the specific disbursement structure in your case.

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