Settlement Breakdown Drafter
When presenting a settlement offer to the client for their approval.
A settlement breakdown is the document that turns a headline settlement number into the figure that actually matters to your client: their net recovery. It walks from the gross amount through attorney fees, case costs, and lien payoffs, so the client understands exactly where every dollar goes. A clear breakdown prevents disputes, satisfies your ethical duty to account for funds, and demonstrates the value you added through lien negotiation.
This is a task Claude handles cleanly. Feed it the gross settlement, your fee percentage, an itemized cost list, and the claimed-versus-negotiated lien figures, and it produces a tidy gross-to-net table with plain-English explanations of each deduction. The arithmetic and formatting that would otherwise eat an hour become a first draft you can review in minutes, freeing you to focus on counseling the client through the decision.
Use the prompt below as a starting point. Replace the bracketed figures with your actual numbers, then verify every line against your trust accounting and lien files before presenting it. Claude's output is a draft accounting for attorney review, not legal or tax advice, and the figures must reconcile exactly to your records before any client signs.
The Prompt
Create a settlement breakdown for client review: Gross settlement amount: [TOTAL SETTLEMENT] Attorney fee percentage: [e.g., 33.3% or 40%] Case expenses: - Filing fees: [AMOUNT] - Expert witness fees: [AMOUNT] - Medical record costs: [AMOUNT] - Deposition costs: [AMOUNT] - Other: [LIST WITH AMOUNTS] Medical liens: - [PROVIDER]: [AMOUNT CLAIMED] → [NEGOTIATED AMOUNT] - [PROVIDER]: [AMOUNT CLAIMED] → [NEGOTIATED AMOUNT] Other liens: [e.g., health insurance subrogation, Medicare/Medicaid] Create: 1. A clear table showing the math from gross to net 2. Explanation of each deduction in plain English 3. Comparison of what was claimed vs. what was negotiated for liens 4. The client's net recovery amount 5. A brief statement of what the client needs to sign to accept 6. Tax considerations disclaimer
Example Output
A one-page settlement statement with a clear table, line-item deductions, and the client's net recovery prominently displayed.
Illustrative example — names, figures, and facts are fictional.
SETTLEMENT DISBURSEMENT STATEMENT
Client: Maria Alvarez | Matter: Alvarez v. Northgate Logistics
Date: September 18, 2026
Amount
Gross Settlement ............................. $180,000.00
Less: Attorney Fee (33 1/3%) ................ ($60,000.00)
Less: Case Costs (itemized below) ............ ($4,815.00)
Less: Medical Liens (negotiated) ............ ($21,300.00)
----------------------------------------------------------
NET RECOVERY TO CLIENT ...................... $ 93,885.00
CASE COSTS
Court filing fee ................................. $ 435
Expert witness (Dr. Patel, IME) ................. $ 2,750
Medical records & imaging ....................... $ 930
Deposition transcript (defendant driver) ........ $ 700
----------------------------------------------------------
Total costs ..................................... $ 4,815
MEDICAL LIENS (Claimed vs. Negotiated)
Mercy Regional Hospital ....... $18,200 -> $12,400 (saved $5,800)
Summit Orthopedics ............ $ 9,100 -> $ 6,900 (saved $2,200)
Apex Physical Therapy ......... $ 3,500 -> $ 2,000 (saved $1,500)
----------------------------------------------------------
Total lien savings to client ................. $ 9,500
To accept this settlement, please sign the enclosed Settlement
Disbursement Authorization and the release.
TAX NOTE: Compensation for physical injuries is generally excluded
from taxable income, but exceptions exist (e.g., punitive damages,
interest). This is not tax advice; please consult a tax professional.Tips
- •Always show the lien negotiation savings — it demonstrates your value beyond the headline settlement number.
- •Include the tax disclaimer — personal injury settlements are generally tax-free, but there are exceptions.
- •Present the breakdown in person or by phone first, then send the written version for their records.
Frequently Asked Questions
When should I use a settlement breakdown with my client?
Use it whenever you present a settlement offer for the client's approval, and again at disbursement. Many jurisdictions require a signed written disbursement statement before funds leave the trust account. Presenting the math early, ideally in person or by phone first, lets the client make an informed decision and reduces the chance of a later dispute over fees or liens.
Is Claude's settlement breakdown ready to send to the client as-is?
No. Treat it as a draft accounting. Reconcile every figure against your trust ledger, signed lien payoff letters, and cost records before it goes out. A single transposed number can create a fee dispute or a trust-accounting problem. The attorney is responsible for confirming the math and the disclosures, and the client should sign only a verified statement.
How do I get the most accurate and useful breakdown?
Give Claude precise inputs: the exact gross amount, your fee percentage or amount, each cost as a separate line item, and both the claimed and negotiated figure for every lien. Showing claimed-versus-negotiated is what demonstrates your value, so include it. Ask for a clearly labeled net-recovery line and a plain-English explanation of each deduction.
Can I paste client financial details into a consumer AI tool?
Be careful. Settlement figures and provider names are confidential client information under Model Rule 1.6. ABA Formal Opinion 512 directs lawyers to evaluate a tool's data practices before inputting client data and to obtain informed consent where appropriate. Prefer a business-tier deployment with no-training terms, or use generic placeholders, rather than entering identifiable client data into a consumer chatbot.
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