Selling Your Plaintiff PI Firm — Different From Deferring Attorney Fees
A note: this page is for selling the firm as a going concern. Deferring individual contingent fees on specific cases uses a different structure (*Childs v. Commissioner* — see [attorney fee deferral](/attorney-fee-deferral/)). The two structures stack.
Buyer cash → Assignment Co. → A-rated carrier → You, on schedule
If you're retiring from a plaintiff PI / mass tort practice — and you've built referral networks, case files in WIP, and a book worth $2M-$15M to another firm — §453 defers the capital gain on the firm sale across years.
The math — $5M plaintiff firm sale (going concern)
Assumptions: $5M sale, mostly goodwill + case WIP. (PI firms aren't depreciated heavily — minimal §1245 recapture.)
Plaintiff-firm tax wrinkles
- Cases in WIP (contingent fee inventory). Work-in-progress on contingent cases is NOT a fully valued asset for tax purposes (no fee earned until contingency met). Valuation methodology matters.
- Co-counsel / referral receivables. Separately tracked.
- Mass tort book. Bellwether case posture, MDL position, settlement-fund-share entitlements — sophisticated valuations.
- Going-concern vs partner buyout. Solo selling out vs partner-buyout has different structuring. Equity vs asset deal.
- State bar rules on firm sales (e.g., ABA Model Rule 1.17, California Rule 1.17, similar). Practice purchase must comply.
- Open Childs deferrals at time of sale. Seller can structure their last contingent fees at exit. §453 firm sale + Childs fee deferral stack.
When this fits
- $1.5M+ firm sale
- Identifiable acquirer (another firm or entity)
- Book transferable without losing material value
When it doesn't
- Solo without transferable book
- Sale under $1.5M
How I work
Hans Goldstein, IRC §453 specialist. I work with plaintiff PI attorneys on both firm sales and individual fee deferrals.
Frequently asked
Q: Can I structure both — the firm sale AND my last big contingent fee? A: Yes. Two separate §453 structures, two separate deferral streams. Common combination at retirement.
Q: What about state bar rules on firm sales? A: Most states have analogues to ABA Rule 1.17 governing sale of a law practice. We comply; the §453 mechanic is separate from the bar-compliance side.
📘 Get the free Seller's Guide to §453 + a fit-check
A plain-English guide for sellers: how a structured installment sale defers the tax when you sell a business, practice, or property — the math, the alternatives, and how to know if your deal fits.
Drop your info — instant PDF download + within 1 business day Hans will email a preliminary read on which structure fits your deal. No retainer. Carrier compensates the broker — not you.
📞 Hans Goldstein · 317-463-6659 · CA Insurance License #4322192 · Independent §453 specialist · Goldstein & Co. LLC
Educational. Not tax or legal advice.
Run your specific numbers
The calculator runs your sale through real 2026 federal + state tax brackets and shows §453 savings vs lump sum side-by-side.
Run the calculator → 317-463-6659