Settlement Calculator — Fee Methods and Expense Arrangements Explained

Fee Methods

LeanLaw supports two fee calculation methods, configured at the matter level:

Method	How It Works	Example (33.33% fee, $100K recovery, $10K expenses)
Gross	Fee is calculated on the full recovery amount	Fee = $100K × 33.33% = $33,330
Net-of-Expenses	Expenses are subtracted from recovery first, then fee is applied	Fee = ($100K - $10K) × 33.33% = $29,997

Expense Arrangements

LeanLaw supports three expense arrangements:

Arrangement	Description	How It Affects the Statement
Firm Advances All Expenses	Firm pays costs upfront; all expenses deducted from client’s share at settlement	All unbilled expenses appear under “Expenses Advanced”
Client Pays As They Go	Client reimburses costs during the case; only unreimbursed balance deducted at settlement	Step 5 (Map Payments) is required to account for reimbursed expenses
Firm Absorbs Expenses (from Fee)	Expenses deducted from the attorney’s gross fee; client pays no expenses	Expenses reduce the attorney’s fee, not the client’s share. Available with the Gross fee method only — see below.

Supported Calculation Paths

Firm Absorbs is not supported with the Net-of-Expenses fee method. Since Firm Absorbs already deducts expenses from the attorney’s fee, combining it with Net-of-Expenses (which also deducts expenses before calculating the fee) is not an available matter configuration.

The wizard supports these 5 combinations:

Gross + Firm Advances
Gross + Client Pays As They Go
Gross + Firm Absorbs
Net-of-Expenses + Firm Advances
Net-of-Expenses + Client Pays As They Go

Expense Interest and the Net-of-Expenses Calculation

If the firm charges interest on advanced expenses (see How to Process a Settlement Using the Settlement Wizard — Step 2), that interest is added to case costs before the net-of-expenses fee is calculated — it is treated as an expense, not as additional recovery.

Worked example (33.33% fee, $100K recovery, $10K expenses, $500 expense interest, net-of-expenses method):

Total case costs = $10,000 expenses + $500 expense interest = $10,500
Fee base = $100,000 recovery − $10,500 costs = $89,500
Attorney fee = $89,500 × 33.33% = $29,830.35

Compare this to the no-interest example above ($29,997 fee) — the added interest reduces the net-of-expenses fee base, and therefore the fee, by the interest amount.

This does not apply to the Gross fee method, since the gross fee is calculated on the full recovery amount regardless of expenses or interest.

Rounding

All amounts are rounded to the nearest penny by default
Optional: The attorney fee amount can be rounded to the nearest dollar (amounts ≤ $X.50 round down, > $X.50 round up)
Expenses, liens, and net proceeds are always penny-precise