The tax break is about $1.6 billion and is exclusive to trial lawyers. If you are a wills and estates guy, or if you practice any type of law that doesn't involve litigation, you don't qualify.
Under the new tax law, trial lawyers can deduct litigation fees that are advanced to them, regardless of whether the contingency fee was structured as a "net" or "gross" fee arrangement. Currently, "net" fee arrangements will kill your tax deductions. This bill will change that.
The vote was practically along party lines, with 228 Democrats for the bill and only one against and 35 Republicans for the bill with 159 against. But trial lawyers will have to wait before they celebrate the fact that investment managers are basically coughing up their deductions. This is only a House bill, and the White House has threatened a veto. And the "yes" votes are not enough right now to override that veto.
So my advice for the big trial attorney firms is to stay hunkered down in case you suffer the fate of Lerach, Weiss, and Scruggs — and the Fen-phen guys in Kentucky!
