After reading a good article on tips for getting paid, particularly if you are a solo or small firm lawyer, we wanted to (1) share and then (2) ruminate a bit on the practical realities.
The author, Gary Ross, big-firm lawyer turned solo turned small firm lawyer, had mostly great practical advice (there were a couple of tips that just wouldn’t work in Arizona). The best of his suggestions were:
- It’s better to not have a client than to work for a client and not get paid, in essence to work for free;
- Impose good billing policies at the outset, because if you give clients a “deal” when you are building your practice it will be hard to change those billing terms later;
- It’s usually not worth it to chase down clients who don’t pay;
- Hourly fees are the most fair way for lawyers to get paid since you never know what may happen in the future;
- Or if you really want to charge a flat fee, put a cap on the number of hours it buys the client.
Now, here’s the rumination part; we talk to a lot of newer lawyers who are building their practices while coping with law school debt and other financial constraints – maybe a family to support, rent to pay, an office to furnish, etc. It’s hard to turn down a client or not to be sympathetic to some one with a need for the services of a lawyer. So, should you discipline yourself to turn away clients who cannot give you an advance fee? Or should you agree to some kind of payment schedule to make that financial burden more bearable?
We can’t make that decision for you, but here are a few suggestions (yes, we could spend pages and pages talking about billing and getting paid, but it’s Friday afternoon and who wants to read all of that?):
- be realistic about whether you can afford to take payments over time. If you choose to do so, be certain that there is a clear expectation of how much each payment will be, when it will be due, and that the final payment is due long before you anticipate the matter will conclude. Even the happiest of clients will be less happy to have to continue to pay you after the case is settled, won or is otherwise over;
- be diligent about billing. Yes, it takes time. But if you are a solo with no staff, there’s no one to do it but you. If you aren’t diligent about billing when you should, your client may take a hint from you and be less diligent about paying on the due date;
- be vigilant about missed payments, whether they are missed installment payments or the failure to replenish an advance fee when required. If you don’t receive a payment, promptly have the hard conversation with your client about their duty to pay, and remind them of the consequences (that you have already put in your fee agreement or engagement letter), what does that tell your slow- or non-paying client?
- consider low-bono work. We’ve already talked about this in another blog post. If you are financially able to take one or more cases on a reduced fee, then be deliberate about it – don’t reduce your fee because you haven’t gotten paid and you are now writing off unpaid balance after unpaid balance; and
- your time and training are worth something. Don’t feel apologetic for charging legal fees. Of course, you want them to be reasonable and commensurate with the factors listed in the ethical rules; but giving a client a “bargain” at the outset may make it difficult to charge a more realistic fee in the future if they hire you for other matters.
This is the tip of the iceberg – yes, we could do an entire series of posts on this; and who knows, maybe we will. But for now, here’s some food for thought.
Want to talk about it further? AZ Bar members, can call us at Practice 2.0, 602-340-7332 for a phone or in-person consultation.