New Litigation Settlements Tax, Legal Fees No Longer Deductible

Beginning with January 1st, 2018, some changes to the tax code have changed how settlements are taxed and many plaintiffs will now be taxed on their gross recoveries, while attorney fees will no longer be deductible. For example, a plaintiff who settles for $100,000 will be taxed on that amount, regardless if they pay their lawyers $40,000 or more. In cases with bigger recoveries, the situation can look a lot…

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Obligations to Your Clients and Their Insurers: A Balancing Act

It’s not that uncommon for business litigation to involve insurance companies. There are situations where an insurance policy may provide coverage or a defense for litigation, meaning that the insurance company may pay the legal fees incurred by the policyholder’s defense counsel. Clients may sometimes be allowed to choose their own counsel, but other times the insurance company will choose an attorney for them and they will contribute to the…

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