There is no single nationwide deadline stating that every U.S. lawyer must release a settlement check within a fixed number of days. However, lawyers generally cannot hold a client’s settlement money indefinitely or delay payment without a valid reason.
Once the settlement funds have cleared, attorney fees and expenses are calculated, and legitimate liens or disputes are resolved, the lawyer must promptly distribute the money the client is entitled to receive. ABA professional-conduct rules require lawyers to notify clients when funds arrive, provide an accounting when requested and promptly release undisputed funds.
How Long Does Settlement Payment Usually Take?
After the lawyer receives the settlement check, payment to the client may take anywhere from several business days to several weeks.
The lawyer normally must:
- Obtain the client’s endorsement when required;
- Deposit the check into a client trust account;
- Wait until the funds have fully cleared;
- Deduct the agreed attorney fee and case expenses;
- Resolve medical bills, government claims or other liens;
- Prepare a settlement statement; and
- Issue the client’s net payment.
Lawyers should not release money simply because the bank shows that the deposit is “available.” Trust-account funds generally must complete the banking process before they are disbursed. The Washington State Bar explains that there is no reliable universal waiting period because funds availability and final clearance are not always the same.
A normal check may clear within a few business days, although some law firms wait longer when the check is drawn on an out-of-state bank or there is concern about whether it will be honoured. Oregon State Bar guidance has discussed practical waiting periods ranging from three to ten banking days, depending on the check.
Why Might a Lawyer Hold the Settlement Longer?
The most common reason for a longer delay is an unresolved lien. A hospital, doctor, health insurer, Medicare, Medicaid, workers’ compensation carrier or another party may claim a legal right to part of the settlement.
When a valid third party claims an interest in specific settlement funds, the lawyer may be required to keep the disputed amount in the trust account until the claim is resolved. Releasing that money directly to the client could expose the lawyer to liability.
Other legitimate reasons for delay may include:
- Negotiating reductions in medical bills;
- Waiting for a final Medicare or Medicaid reimbursement amount;
- Resolving a child-support lien or court-ordered payment;
- A dispute over attorney fees or case expenses;
- Missing signatures on settlement documents;
- A stop-payment order or problem with the insurer’s check; or
- A disagreement over who legally owns part of the settlement.
Only the disputed portion should normally remain in trust. The lawyer must generally release the portion that no one disputes.
Is There a Specific State Deadline?
State professional-conduct rules control the lawyer’s responsibilities, so requirements may differ.
Many states use language requiring “prompt” delivery rather than setting an exact number of days. What counts as prompt depends on the facts, including whether the check has cleared and whether liens remain unresolved.
California provides a more specific benchmark. Its rules create a rebuttable presumption of a violation when a lawyer, without good cause, fails to distribute undisputed money within 45 days after the funds become undisputed. This does not mean every California lawyer may automatically hold settlement proceeds for 45 days. Funds should still be released promptly when there is no proper reason for delay.
Must the Lawyer Provide a Settlement Statement?
You may request a complete accounting showing how the settlement is being divided.
The statement should ordinarily identify:
- The gross settlement;
- Attorney fees;
- Reimbursed case expenses;
- Medical bills and liens;
- Other authorised deductions; and
- The net amount payable to you.
ABA rules require lawyers to provide a full accounting regarding client or third-party property when requested. Client trust-account records should also document deposits, deductions and payments.
Do not sign a settlement statement you do not understand. Ask for an explanation of every deduction and compare the attorney fee with the contingency-fee agreement.
What Should You Do When Payment Is Delayed?
First, contact the lawyer in writing. Ask:
- When the settlement check was received;
- When it was deposited;
- Whether it has cleared;
- Which liens remain unresolved;
- How much money is undisputed;
- Whether the undisputed amount can be released immediately; and
- When you will receive a final accounting.
Keep copies of emails, letters and messages. A lack of communication does not necessarily prove that the money has been mishandled, but the lawyer should be able to explain the delay clearly.
When the firm continues to ignore you or refuses to account for undisputed funds, send a written demand to the supervising attorney or managing partner. You may also speak with another lawyer about your rights.
Can You File a Complaint Against the Lawyer?
Yes. When you believe a lawyer is improperly withholding or misusing settlement funds, you can contact the lawyer disciplinary agency in the state where the attorney is licensed. This is often operated by the state bar or the state supreme court.
If money was stolen or misappropriated, a state client protection or client security fund may provide limited reimbursement. These programmes are intended for losses caused by dishonest lawyer conduct, although eligibility requirements and payment limits apply.
The Bottom Line
A lawyer may hold a settlement check long enough for it to clear and for valid fees, expenses and liens to be resolved. A period of several business days or a few weeks may be reasonable, depending on the case.
However, the lawyer cannot hold undisputed settlement money indefinitely. You are generally entitled to prompt payment and a detailed accounting. When the lawyer cannot explain the delay, refuses to release undisputed funds or stops communicating, request answers in writing and consider contacting the appropriate state lawyer disciplinary agency.
