I have spent 30 years sitting across the table from personal injury attorneys at the exact moment their biggest case finally settles. The same pattern repeats itself more times than I can count: a seven-figure fee arrives, the check is deposited and within 18 months it has been absorbed into overhead, taxes and lifestyle, with almost nothing set aside for the attorney’s own retirement. It is imperative that we, as advisors, change that pattern before the check clears, not after.

Personal injury attorneys have a retirement problem that most W-2 professionals never face: their income is lumpy, unpredictable and often concentrated in a handful of enormous contingency fees. That irregularity is precisely why the standard retirement toolkit is ineffective. The addition of an attorney fee structure can change all that for the client.

The 401(k): Necessary, But Not Sufficient

A solo or small-firm 401(k) remains the foundation of any retirement plan. For 2026, an employee can defer up to the statutory limit, with catch-up contributions available at age 50 and an enhanced catch-up for those aged 60 to 63 under the SECURE 2.0 Act. If the firm adopts a solo 401(k) or a small-firm plan with profit-sharing, total contributions can reach the combined employee-and-employer limit. That is real capacity, but it is capped, and a single strong contingency fee deferral can dwarf it many times over. The unvarnished truth is that a 401(k) alone cannot absorb the income spikes this profession produces or provide the retirement income this group requires.

Deferred Compensation Plans: Flexible, But Not Guaranteed

Nonqualified deferred compensation plans, governed by Internal Revenue Code Section 409A, allow an attorney to defer a portion of compensation beyond qualified plan limits, with the timing of distributions elected and the contribution determined in advance. These plans offer real flexibility, but they are unsecured promises to pay, subject to the firm’s general creditors. For an attorney whose income depends on the very lawsuits that create liability exposure, that is a meaningful vulnerability. I raise this not to discourage their use, but because zealous advocacy plainly discloses the trade-off.

Structured Settlements: The Tool Attorneys Too Often Overlook for Themselves

This is the piece most CPAs never learn in school: Under gross income revenue rules, such as the IRS’ Rev. Rul. 2003-115, and the constructive-receipt doctrine established in the settlement agreement case, Childs v. Commissioner, 89 T.C. 599 (1994), an attorney can structure all or part of their own contingency fee before the right to receive it becomes fixed through a qualified assignment, which defers both recognition of income and the resulting taxation of that fee into the future.

Consider what that actually offers: unlimited deferral. Unlike a 401(k) or even most deferred compensation arrangements, there is no statutory cap on how much of a fee can be structured. A single large fee can fund a decade of future income. Attorneys can choose a fixed annuity for guaranteed payments, a market-linked variable option for growth potential or a blend that matches the structure to their risk tolerance, rather than a one-size-fits-all approach. Funds within the structure grow without annual taxation, compounding on the full pre-tax amount until distribution.

Structured fees can be designed to create genuine retirement income, smooth yearly cash flow between big-case years and lean ones and reduce tax exposure by spreading a lump-sum fee across many lower-bracket years rather than a single high-bracket year. I think of philosopher Marcus Aurelius, who said, “Waste no more time arguing what a good man should be. Be one.” The same applies to planning. Waste no more time treating the attorney fee structure as an afterthought reserved for the client. Use it for the attorney, too.

When your personal injury attorney clients ask about retirement, don’t stop at maximizing the 401(k) and reviewing the deferred compensation agreement. Ask the harder question: is a portion of this year’s fee a candidate for structuring before the engagement letter is signed and the right to that fee becomes fixed? Timing is everything here, and this conversation must be had well before the settlement conference, not after the check arrives.