How to Process a Settlement Using the Settlement Wizard

The Settlement Wizard is a guided 6-step workflow on the Settlement tab of any contingent fee matter. It automates fee calculations, confirms expenses, reviews liens, and generates a client-facing Settlement Statement PDF — all without leaving LeanLaw.

Note: The wizard does not create QuickBooks transactions on its own. Billing the client, paying the attorney fee, and disbursing the client’s net proceeds are done afterward.

Prerequisites

Before using the Settlement Wizard, ensure:

• The matter’s billing type is set to Contingent
• A Contingency Fee % is entered on the matter (required at matter creation)
• The firm is set to Matter Accounting (not Client Accounting) in Settings → QuickBooks → Client or Matter Accounting — contingency trust tracking is per-matter and requires this setting
• Trust Accounting is enabled at the firm level, and the matter’s trust sub-account exists in QuickBooks (recording a deposit to trust for the settlement amount will create it if it doesn’t exist yet)
• Any hard costs the firm pays as vendor bills or checks are entered as expenses/bills in QuickBooks and synced to LeanLaw — a check written directly from the trust account in QBO will not show up on the settlement statement
• You have billing access + matter edit permissions

The 6 Steps

Note: Step 5 is always visible in the wizard stepper but will appear disabled with a tooltip (“Only applies when client pays expenses as they go”) if your expense arrangement doesn’t require it. The wizard will skip from Step 4 to Step 6 automatically. 

Step-by-Step Walkthrough

Step 1: Enter Recovery Amount

Enter the deposits to trust that make up the settlement amount. There may be multiple deposits — for example, if three insurance companies each contribute a portion of the recovery. The wizard totals these deposits to determine the gross settlement amount, which triggers all downstream calculations. The total recovery amount must be greater than $0.

Step 2: Confirm Expenses

Review all unbilled expenses on the matter. The wizard displays each expense with its description, date, and amount. Confirm that the list is complete and accurate before proceeding.

If expenses exceed the recovery amount and you use the net-of-expenses fee method, the wizard will block you from continuing (the fee base would be negative).

Reminder: Any hard cost the firm paid as a vendor bill or check in QuickBooks needs to be created and synced to LeanLaw before this step, or it won’t appear here.

Expense Interest (if enabled on this matter)

If the firm charges interest on advanced expenses:

1. The interest rate is set once in Settings → Billing → Interest on expenses.
2. On the matter, the Expense Interest toggle stays enabled in Matter → Settlement → Settings.
3. In Step 2 of the wizard, set the interest as-of date — interest is charged through this date; expenses dated after it are excluded.
4. Review the list of expenses, amount, days of interest, and interest amount. If it looks right, click Confirm expense interest. This creates a soft cost representing the total interest charged across all expenses on the matter.
5. Continue through the wizard — the settlement statement reflects this as part of case costs.

Note: There is no dedicated expense-interest report yet. If you need a breakdown outside the settlement statement, calculate it separately for now.

Step 3: Record Attorney Fee

The wizard calculates the attorney fee based on your configured fee method (net or gross) and expense arrangement. You’ll see:

• A calculation breakdown showing how the fee was derived
• The calculated attorney fee amount in a callout box
• Any existing fixed fees on the matter

If no matching fee exists, click Create Fixed Fee to create one. If a matching fee already exists, the step auto-completes. You must have exactly one fixed fee matching the calculated amount to proceed.

Step 4: Review Third-Party Liens

The wizard pulls liens from the Liens tab on the matter. Review the list and verify amounts are correct.

Need to add or modify a lien? Navigate to the Liens tab on the matter to add, edit, or update lien records before proceeding. See How to Track and Manage Liens on a Matter for details.

Step 5: Map Prior Payments (if applicable)

If your expense arrangement is “Client pays as they go,” this step lets you identify payments on the matter from the client for expenses so they aren’t double-counted in the settlement statement.

Step 6: Generate Settlement Statement

Click Generate Settlement Statement to produce a frozen PDF. The statement shows:

• Settlement deposits (from trust)
• Attorney fees
• Expenses advanced on behalf of client (including expense interest, if applicable)
• Third-party liens/payments
• Net proceeds to client
• Signature lines for client and attorney

The PDF is stored on the server and can be re-downloaded anytime.

After the Wizard

Generating the statement does not create a QuickBooks invoice. To bill the client and complete the settlement:

1. Go to the Billing tab.
2. Check “Show only contingency matters” to filter to this matter.
3. Draft the invoice — it picks up the confirmed attorney fee and unbilled expenses (including expense interest, if applicable).
4. Finalize the invoice.
5. Pay the invoice from trust.

Sales tax: If your firm charges sales tax on legal services (required in a small number of states, including Hawai’i, New Mexico, and South Dakota), the correct tax amount will only appear after you finalize the invoice — you’ll need to regenerate the settlement statement afterward to reflect it.

Then, in QuickBooks Online:

• Pay any third-party liens from trust — see How to Track and Manage Liens on a Matter for how to push these directly from the Liens tab
• Disburse the client’s net proceeds from trust (this step is manual in v1 — there is no in-app disbursement action yet)