7 pointers to get paid for your work
Lawyers must be confident in knowing that they provide value to their clients, and just like any other profession, they deserve to be paid for their work, said Heidi S. Alexander, a law practice management adviser at the Massachusetts Law Office Management Assistance Program. Alexander outlined seven steps to help ensure that lawyers get paid for their work in a recent issue of Law Practice Magazine.
- Select clients carefully. Lawyers should not accept just anyone who walks through their doors as a client. Using a grading system is one method for vetting problem clients. "Your A client is your ideal client, whereas your D client raises the notorious red flags," Alexander said. "When you grade your clients, consider criteria such as ability to pay your fees, reasonableness, credibility, honesty, emotional stability and the complexity of the legal issues involved."
Make sure to avoid criteria that could be deemed discriminatory by paying attention to state or local ethical dictates and court opinions. "If you decide not to take a case, be sure to send the potential client a nonengagement letter confirming that you will not represent that individual or business in the matter," Alexander said.
- Use a written fee agreement. The agreement should lay out attorney and client expectations, detail billing procedures and provide the consequences should the client fail to pay for services. "You should take the time to explain each of the terms of the fee agreement to the client," Alexander said.
"Having a written fee agreement that you review with the client will not only help the client to better understand your relationship and the nature of your services, but it also provides you with a written set of collection terms to fall back upon should your client fail to pay," she added.
- Collect money upfront. This could be a retainer, an advanced deposit or a flat fee. Regardless, payment upfront demonstrates both the client’s ability to pay for services and investment in his or her case, Alexander said. "If the potential client does not have any funds to pay you at the onset of your engagement, he or she likely will not have funds to pay you down the road," she said.
- Bill early and often. Don’t let too much time pass without requiring a payment. "Billing with some regularity — for example, at least monthly — helps your clients know when they will need to pay, so they can be more prepared to do so," Alexander said.
Send a professional invoice that is clearly and conspicuously labeled as such and that includes a due date for payment, she said. Some firms use a colored envelope to set their invoices apart from other mail. In addition, "your bills should explain the work that you did for the client in a way that the client can understand. Don’t use abbreviations or legalese."
- Keep in touch with clients. Maintaining good client communication is essential to getting paid, Alexander said. Giving regular reports to your clients via phone or email regarding the status of their cases and the good work you are doing will help demonstrate your value and make your clients feel better about paying your fee. Further, generating status reports is a great marketing tactic; clients who hear from you regularly may be more inclined to send you referrals.
- Don’t be afraid to get out. "Be proactive about getting out of cases when you are not getting paid — and when allowed by your state’s ethics rules and court rules," Alexander said.
Rely on your written fee agreement to get out when your client does not meet the expectations delineated in that agreement, Alexander said. If you plan to depart from a case involving potential litigation, be sure to seek and acquire leave of the court before terminating the client relationship.
- Use collection as a last resort. Be sure to have and follow a firm collections policy that details how you track client payments and handle situations in which the client is delinquent with payments, Alexander said. As a last resort, you can hire a collections agency to help you collect your fees. And if all else fails, you can sue your client to recover your fees. "When embarking upon these measures of last resort, be sure to weigh all the risks and associated costs," Alexander said.
Law Practice Magazine is a publication of the Law Practice Division.
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