What to Do if Your Attorney Steals Your Settlement

Few situations feel more devastating than discovering your attorney may have stolen money from your settlement. You placed your trust in a professional who should have protected your interests, only to have that trust taken advantage of for their own financial gain. If you find yourself in this nightmare scenario, you need a Houston legal malpractice attorney to help you stop the bleeding and find justice.

Settlement theft by attorneys represents one of the most serious forms of legal malpractice, involving not just professional negligence but also breach of fiduciary duty, and possibly even criminal conduct. When lawyers misappropriate client funds, they violate fundamental ethical obligations and can cause severe financial harm to the very people they were hired to protect. This is why at Sears Crawford, we sue lawyers — to make things right for our clients and protect the integrity of our profession.

Keep reading to find out what to do if your attorney steals your settlement, or contact Ross Sears at Sears Crawford today at (713) 223-3333.

Can my lawyer steal my settlement money?

While attorneys are legally required to hold client settlement funds in trust accounts separate from their own money, it is possible for unscrupulous lawyers to steal from their clients. This theft can take various forms, from outright misappropriation of funds to more subtle schemes involving unreasonable attorney fees or unauthorized deductions.

Attorney theft of settlement funds constitutes both a breach of their fiduciary duty and potentially criminal fraud. When an attorney steals settlement money, they violate professional conduct rules, breach their fiduciary duties and contractual obligations, and may face both civil liability and criminal prosecution.

Common forms of settlement theft

Some common forms of settlement theft include:

• Excessive fee taking: Taking fees beyond what was agreed upon in the retainer agreement
• Personal use of client funds: Using client settlement funds for personal expenses or to cover business debts
• Poor fund accounting: Failing to properly account for settlement distributions
• Unauthorized withholding: Withholding settlement funds without legitimate justification
• Undisclosed deductions: Making unauthorized deductions for expenses not covered in the fee agreement

It can be difficult to tell the difference between legitimate fees and theft. While lawyers are entitled to reasonable compensation for their services according to agreed-upon fee structures, when attorneys take more than authorized, fail to properly account for deductions, or misuse client funds for personal expenses, they cross the line into malpractice territory.

Continue reading: What is legal malpractice?

What is the most a lawyer can take from a settlement?

The amount lawyers can legitimately take from settlements depends on the fee arrangement established at the beginning of the attorney-client relationship. Understanding these limitations helps identify when attorneys may be overstepping their bounds. Even when you have signed a contract, agreeing to certain fees, the law does not allow an attorney to charge an “unconscionable” fee.

The first cost that may be removed from your settlement is the attorney’s contingency fee. While these fees vary on a contract-by-contract basis, there are general expectations and limits to contingency fees in Texas.

There are also additional deductions from your settlement that are likely legitimate, other than the attorney’s contingency fee, including:

• Court filing fees
• Expert witness costs
• Deposition expenses
• Investigation costs
• Medical record fees
• Travel expenses (when authorized)
• Other clearly documented case expenses

The key factor in determining whether an attorney’s take is legitimate lies in transparency and agreement. All fees and expenses should be clearly explained in your retainer agreement, and you should receive a detailed accounting of any deductions from your settlement at the conclusion of your case.

This is known as a client settlement statement and it should show you the total or “gross” settlement, then show a detailed breakdown of all deductions for attorney’s fees and expenses and any other deductions, followed by the “net” amount owed to you.

How to tell if your lawyer cheating you on a settlement

Now, if you think your lawyer lied about a settlement amount, there are some red flags to look out for. Identifying settlement fraud requires paying close attention to warning signs and raising concerns as early as possible.

Some major red flags to look for if you think your attorney is cheating you include:

Ultimately, you should trust your instincts if something feels wrong. If you suspect your lawyer lied about your settlement amount or mishandled your funds in any way, don’t hesitate to seek a second opinion from another attorney who specializes in legal malpractice cases.

Can my lawyer cash my settlement check without consulting me?

Can my lawyer settle my case without me? This question touches on fundamental principles of attorney-client relationships and professional ethics.

If your attorney was not authorized to settle your case and did so anyway, it might mean that they breached their fiduciary duty or made a breach of contract violation, which means that you might be able to sue them for malpractice.

How to ask your lawyer about your settlement

Communicating effectively with your attorney can often help resolve issues that might become painful or contentious down the road. When asking your attorney about your settlement breakdown, you’ve got to be direct and professional.

Start by asking fundamental questions about the settlement timeline and distribution process. You should ask:

• When your attorney expects to receive the settlement check
• What the total settlement amount is
• How long after receipt you can expect to receive your portion
• What specific deductions will be made from your share

Request detailed breakdowns of all fees and expenses that will be deducted from your settlement. Ask for written documentation showing your attorney’s fee percentage or total hourly charges, itemized lists of all case expenses, and explanations of any other deductions being made.

Legitimate attorneys should readily provide this information and be able to explain every aspect of the fee structure clearly. If you run into trouble from your attorneys, or they’re not forthcoming about fee structures and deductions, you need to call the attorneys that sue other attorneys at Sears Crawford before it’s too late.

Worried your attorney took more than their share of your settlement? Sears Crawford can help.

If you suspect your attorney stole from your settlement or engaged in other forms of malpractice, taking action quickly is essential for protecting your rights and recovering your losses. Still wondering what to do if your attorney steals your settlement? Ross Sears is here to help.

Ross has been suing lawyers and helping his clients make things right in Texas for over 30 years. While many attorneys pick up legal malpractice cases on the side, Ross’s practice is primarily focused on legal malpractice, where he uses his specialized knowledge and experience to make a difference for every client.

Whether you’re looking to sue for overbilling, suspect your attorney stole part of your settlement, or believe they had a conflict of interest, Ross Sears at Sears Crawford can help. Justice delayed is justice denied, and we’re here to ensure you get the justice you deserve. WE SUE LAWYERS. Call us today at (713) 223-3333 or contact us online for a free consultation.

More Helpful Articles by Sears Crawford: 

• Four Elements of Legal Malpractice in Texas
• Texas Rules of Professional Conduct: Everything You Need to Know
• How To Sue a Lawyer for Malpractice
• Most Common Types of Legal Malpractice in Texas
• How to Find a Lawyer to Sue Another Lawyer