The Pros and Cons of Suing Your Clients
This is an uncomfortable topic. Lawyers do not like to sue their clients. Instead, many of us carry accounts receivable far in excess of reasonable accounting principles. Worse, we write off fees rather than pursue collection. In the end, the lawyer is cheated. Our time is our trade, and clients who do not pay harm us. They devalue our time, in essence devaluing our services. From a larger perspective, it harms the practice.
Having said that, I am a cautious advocate for pursuing clients who do not pay. Before you do so, you should do the same cost-benefit analysis you use in considering when to file any lawsuit. Here are some of the pros and cons:
• The upside is that you collect your fee. Only sue clients from whom you can collect the judgment.
• You send a strong message to that client and others that you value your time and deserve to be paid.
• You are vindicated.
• You get paid, but only after you pay your own lawyer.
• Malpractice carriers are convinced the best way to pick up a claim for malpractice is by suing your client first. Many clients react by filing a counterclaim for malpractice, if available.
• You cannot be objective. Do not represent yourself.
• Malpractice carriers deny underwriting lawyers who sue their clients. This is a hidden truth.
As is true with any lawsuit, consider the strengths and weaknesses of the claim. Pay keen attention to whether the client may have a malpractice claim. Remember, some clients will attempt such a claim whether it has merit or not. Finally, be realistic, you will need representation, and so you will not collect your entire fee. So only pursue claims that justify collection efforts. Also only pursue claims where the client ultimately has the means to pay you.
Joan M. Swartz, a former law firm partner, started her solo practice in March 2000 in St. Louis, Missouri. She concentrates on small businesses as well as real estate, contracts, and civil litigation. Contact her at email@example.com.