But did you ever think that you might be in the courtroom as a plaintiff, fighting against your clients and trying to find justice for yourself?
A recent ABA Journal article by Debra Cassens Weiss titled "Top law firms increasingly go to court to collect fees: is it the new normal?" notes that it is more and more common for large New York law firms to bring clients to court or arbitration to collect fees.
According to the article, the New York Law Journal discovered, after an examination of court filings in Manhattan and Brooklyn, a minimum of 12 instances of litigation in which either large firms sued clients or clients sued to prevent arbitration stemming from unpaid bills — an increase over similar filings in previous years.
The New York Law Journal attributes the increase to "the softening demand for legal services, less loyalty between clients and firms and delayed payments by corporations."
So, as a lawyer, do you have to be resigned to this state of affairs?
Certainly not. There are many things you can do to increase your chances of collecting your fee and decrease the likelihood that you will end up in court over unpaid fees.
Create a written policy
Create a written collections policy before you represent your first client. If the client does not pay your bill, you want to have everything in place to begin to collect immediately. Make this written policy and all accompanying forms, letters and other documents part of your firm's collections handbook.
Your written policy must take into account two main functions: how to keep track of when clients are behind on their payments, and how to contact clients when they are late with payments.
The main idea is to get on the problem early in order to keep your accounts receivable low and to keep your losses to a minimum. In collections, the more time that goes by, the harder the bill will be to collect.
For example, when a bill is over 60 days past due, you will still be able to collect about 89 percent of the amount. However, the percentage drops to 67 percent after six months. After a year, the percentage you can expect to collect on the account is less than half.
Obviously, you want your staff to let you know quickly about clients who are not paying their bills so that you can immediately address the issue and, if necessary, stop working for those clients.
Review the terms of the agreement
Because you have asked your clients to sign and initial written agreements, the best possible way to begin the collection process is to review the agreements. In particular, the fee agreement should provide most of the information that you will need to begin.
Be sure that you fully understand the terms of the client's agreement. You may be called on to explain them to the person who will be collecting your past-due accounts. That person will be drafting a letter to the delinquent client explaining those terms.
Review the local rules of professional conduct
Finally, check the Rules of Professional Conduct in your local jurisdiction. See the ABA Model Rules of Professional Conduct, as well as a number of provisions in state and federal statutes.
Although you already have a signed fee agreement, you also want to be certain that you do not inadvertently do anything that would allow you to be censured for your conduct in the matter.
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