How to avoid clients who refuse to pay

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Published on 10/10/05

How do you handle people who want your help, seem to appreciate you while the case is ongoing, but once they get a bill they call you, curse at you and refuse to pay?

My experience suggests that the end is determined by the beginning.

As a former family law practitioner, I often noticed that the extent of the bitterness, if any, between the spouses could have been predicted by the circumstances surrounding their courtship, engagement and then marriage. It wasn't always, but it was often enough that, when thinking about collection matters, I was compelled to look at this phenomenon in a new context.

When a client first enters the office of a lawyer, he or she is almost always stressed out. They don't want to be in the office. Something, usually bad in their lives, has compelled them to seek out the lawyer. The lawyer, oftentimes, is thankful to have the new client and new matter.

The end result is that neither party fully listens or hears the other party. And each has his or her own agenda.

The client wants to dump the problem on the lawyer. The lawyer wants to get busy helping the client, doing the work and getting the issue or problem resolved.

In this environment, the client rarely asks the lawyer about fees and costs. The lawyer rarely talks about fees and costs. Oh, the lawyer might mention his hourly rate, but that is a metric with which the client is unfamiliar.

Thus, the real issue: What is the principle involved and how much is the client willing to spend for his or her principle is frequently not discussed.

This is a disaster waiting to happen.

I suggest that the fee discussion take place as soon as possible -- usually the very first meeting. I also suggest that a full budget be prepared for the matter, especially if fees are likely to be substantial. When should this happen? As soon as possible, but hopefully no later than 30 days after being engaged.

Further, be sure to get the client to initial the budget with all of its assumptions spelled out clearly so that the client is clear about what is expected to happen and how much it will cost. The budget can be modified as time and events unfold; at all stages, however, get the client "buy-in."

With this process in mind, your problems with collecting fees will be reduced significantly.

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