Odds are you’re extending credit to some clients that won’t ever pay their bill. Everybody does it so you probably do as well.
You’d like to collect and you may even believe you’re going to.
Some might. Many won’t. That will be completely normal as well.
But, that’s not acceptable. You’re good. Your work is valuable. You deserve to get paid.
You need to stop doing work for clients that aren’t going to pay their bill – in full.
How do you know who’s not going to pay?
In our world the people that aren’t going to pay are the people who haven’t paid in advance or who don’t have money in your trust account.
If you’re extending credit, the odds are overwhelming that you’re not going to collect those receivables in full.
You need to stop working for those people. Obviously, you can continue if they decide to put money in trust. Otherwise, get yourself out of the case.
Then, use the time you just opened up to market your practice. Go to lunch with some other attorneys. Let them get to know you. They’re going to like you. They’re going to trust you and they’re going to refer business to you.
When these new clients knock on your door be sure to have them pay in advance or put money in trust. Be sure you don’t end up working for free again.
Related articles:
{ 5 comments… read them below or add one }
Divorce Discourse: How Cutting Off Deadbeats Will Increase Your Revenues http://tinyurl.com/yguyaw8
This comment was originally posted on Twitter
More from author
The trick is right at the engagement, especially for non-in person engagements as those become increasingly more common- the longer you wait to collect the fee and don’t jump right into handling the client’s situation, some potential clients see that as lack of interest in the case, rather than a failure on their part to send in the fee. One solution is to take a credit card payment by phone, which can speed up work on the case.
More from author
Andrew,
I couldn’t agree with you more.
Your point about appearing interested in the case from the start is also critical. We send a couple of workbooks out right away to get the client busy and schedule a couple of meetings to gather info and evaluate the situation. We try to make a bunch of things happen in the first few days.
Thanks for contributing.
Lee
we have gone to a fixed fee basis. But, we’re still having a hard time explaining the benefits.
It seems though that clients have the mistaken belief that the retainer is the whole fee. They also seem to have a tough time when they get bills were sometimes thousands of dollars and they are not prepared for it. When you do have a conversation about what the cost might actually be, they sometimes go down the street thinking”no that could never be”until they find another lawyer to tell them what they want to hear . Bottom line it is tough to make money
More from author
Great post Lee. I know several attorneys who wait until the trust account is depleted to ask for more money – and usually it is a big chunk (thousands of dollars). I would always bill my clients monthly – even when I had money in trust – and told my clients that if their trust account falls below a certain amount that all work on their case would stop. I found it easier for the clients to make smaller payments once a month than to wait for when the trust account was gone to ask them for a huge chunk.
Lee – Do you or anyone alse out there keep a credit card on file in lieu of a trust balance? Is that even ethically permissible?
Jim Hart
More from author