My Lawyer Took My Settlement: Is This Common? (2025)

Typical Claim Settlement Process

While settling a claim is an important milestone, it is not the end of your case. Several steps remain before you receive your money. These steps are normal, and you should not assume that “my lawyer stole my settlement.”

The lawyers on each side cooperate in drafting a settlement agreement. Depending on the case, this process could take days or weeks. For example, agreements for slip and fall settlements are fairly standard. In contrast, a complicated wrongful termination settlement might require several drafts before both sides accept it.

The settlement agreement will usually include a timeline for sending the settlement check. If the other party had insurance, the insurer will have a process in place to ensure it sends the check on time.

The other party will mail the check to your lawyer’s office. The check may be made out to your lawyer or to both you and your lawyer. In the first case, the lawyer can endorse the check without your signature. In the second case, you and your lawyer must endorse the check together.

In either case, the lawyer will deposit the check in the firm’s trust account. A trust account holds clients’ property. Even though it is not in your account yet, the check remains your property, and the lawyer must follow your state’s ethical rules for keeping it safe. These rules include the following:

• Preserving the full amount by paying any bank fees out of the lawyer’s pocket
• Maintaining a complete accounting, including records of all disbursements
• Holding disputed amounts and promptly dispersing undisputed amounts to you

You receive your payout after the lawyer pays any claims to your settlement.

Fees and Costs Your Lawyer Pays From Your Check

Clients sometimes get frustrated and think, “I wonder why my lawyer is holding my settlement.” In most cases, there is a good reason.

You probably have several claimants to your settlement. For example, healthcare providers in many states can file medical liens against a car accident settlement for unpaid doctor or hospital bills.

Additionally, your lawyer must pay litigation costs for your case out of your settlement. Examples of litigation costs include court filing fees, deposition expenses, and expert witness charges. These costs may be significant if your case goes to trial.

Finally, your lawyer will deduct their legal fees. If you agreed on a contingency fee, the lawyer will calculate the percentage you owe.

Since these payments and calculations take time, you can now understand the answer to “Why is my car accident settlement taking so long?”

If you finally receive your settlement and suspect you have been overcharged, review your fee agreement and contact your lawyer. One area that can cause disputes is whether the lawyer calculates their legal fee before or after deducting expenses.

For example, suppose that you received a settlement of $100,000. You also had $25,000 in costs and a 30% contingency fee. If the lawyer deducts their fee first, the following distribution occurs:

• $30,000 in legal fees
• $25,000 in medical expenses and litigation costs
• $45,000 to you

Conversely, the distribution changes as follows when the lawyer deducts their fee after paying expenses:

• $25,000 in medical expenses and litigation costs
• $22,500 in legal fees
• $52,500 to you

The difference is significant, so read your fee agreement carefully to understand the calculation process.

What if My Lawyer Took My Settlement and Disappeared?

In the unlikely case that your lawyer stole your settlement, you should act quickly. The following signs suggest your lawyer may intend to keep your insurance payout:

• You received no statement showing what happened to the settlement.
• The lawyer dodges your calls and does not return phone messages.
• The firm’s staff cannot find the lawyer.

If you act quickly, you might recover some of your money. Contact the organization responsible for regulating lawyers in your state, such as the bar association. Tell the organization that “my lawyer took my settlement.” While attorneys might ignore client calls, they’ll answer a call from the people who can disbar them.

If state regulators cannot reach the lawyer, contact the police. Stealing or spending your settlement without your authorization might constitute a crime.

Finally, you may need a legal malpractice attorney to sue the law firm. Your lawyer’s malpractice insurer may pay your claim even if they disappeared with your money.

Learn More About Lawsuit Settlements From ConsumerShield

Your settlement check is probably safe with your lawyer. However, if you have problems getting your payout, you may need a legal malpractice attorney. ConsumerShield educates consumers about their rights and helps them find attorneys. Contact us for a free case evaluation and a lawyer referral.