Why Defer Contingency Fees?
With marginal tax rates approaching or exceeding 50%, a well-designed fee deferral program offers a variety of benefits, from reducing your tax burden and enhancing your wealth accumulation to increasing your access to cash and helping you retain key associates.
reduce your tax burden, increase your wealth accumulation
Instead of tying your fee deferral to the meager returns of annuities, you can tie your returns to a customized investment portfolio. Just like in a 401(k), your money grows faster. But unlike a 401(k), there are no limits on the amounts you can defer.
improve your access to cash
Like Fortune 500 executives deferring their compensation, you can exercise greater control over the timing of income and resulting taxation. By having more liquidity, you can plan better for your financial future.
more effectively Retain key associates
Fee deferrals can be used by your law firm to fund a retention plan for key associates and employees, mitigating the risk of important people leaving the firm, and taking valuable cases with them.