Wisconsin Lawyer
Vol. 80, No. 7, July 2007
Ask for Full Payment in Advance
An amazing thing happens when you ask for full payment in advance … you either get it, or you find out in advance all the reasons why the client never planned on paying you. Get it in advance, or go golfing.
- Jason E. Dierkes, Dierkes Law Office, Sheboygan
Keep the Client Informed to Limit Billing Surprises
I have been in practice for 23 years and have operated my own firm since 1999. Since I started operating my own firm, I have rarely failed to fully collect on work billed to my clients. I attribute this success rate primarily to good communication. I have been in practice long enough so that I feel comfortable letting clients know at the outset what to expect in terms of fees and potential outcomes. I keep the client constantly informed, so there are no surprises when the bill comes.
- Elizabeth Rich, Law Office of Elizabeth Rich, Plymouth
Attorney-Client Agreement Can Head Off Problems
Have a clear attorney-client agreement from the get-go. Obtain as large a retainer as possible and make it clear that the retainer is not a flat fee.
Send bills as the matter progresses. This will give the client an early warning about the cost of the matter and give you an early warning if the client is not going to timely pay. Describe the services you are providing on the statement and, if you work on the project on a weekend, include that information as well. Don't just say, "Call with client." Give more detail, like, "Saturday - prepare for call, place call to and confer with client regarding estate planning aspects of transaction." If you give a discount, show it and make it contingent on timely payment. If you have done a good job, your client is collectible, and your client has been given ample opportunity to pay, then sue. (Some malpractice carriers frown on this. However, you may find that the money you recoup is more than enough to pay any additional insurance cost.) _ Dan Freund, Freund Law Office, Eau Claire
Make It Easy for Clients: Accept Payment by Credit Card
I agree with retainers up front, but I don't always get the entire amount up front (although I usually get a few months' worth). I am a firm believer in accepting payment by credit card. Since I began accepting credit cards, my client bills have been paid earlier. Many people prefer to pay this way or it enables them to "afford you" because they can pay on time with their credit card provider.
I also learned the hard way early on that if a client is unwilling to pay you up front or put down a significant retainer, that client also is not going to pay you down the road. You might as well not work rather than work for free. - Anne Ertel-Sawasky, Sawasky Law LLC, Appleton
Don't Let Your Cash Flow Dictate Which Clients You Take On
When you are young and desperate for clients, trying to meet cash flow needs, there is a strong urge to accept as a client anyone who comes into your office and to take whatever they can pay at the time. Nothing you do in the practice can give you more headaches and sleepless nights.
For most client matters, certainly all that involve litigation, you need to make a serious estimate of how much time and money the case will involve, add 20 percent, and ask that amount as a retainer. If the client cannot afford that, you cannot afford the client. Anything less than that amount you need to consider to be pro bono, because it probably will become that.
Somehow clients can always come up with the money needed at the beginning of a case and never at the end. Value your time. Get paid at the beginning (and promptly take care of every aspect of the case), and you will never need to worry about how to get paid.
- Ray Meyer, Koenen & Meyer, Port Washington
Understand Client Psychology
Here are some pointers about client psychology learned along the way:
1) You will meet a client who you feel is trying to impose his or her will on you. Send that client away.
2) You will meet a client who needs you to file a lawsuit on the eve of expiration of the statute of limitation. Don't do it.
3) You will meet a client who has nothing good to say about his or her former lawyers. Someday, that client will have nothing good to say about you.
4) You will meet a client who wants you to perform services beyond your areas of competence. Just say no!
When your client needs you the most is when your client is most likely to pay. Think about your visit to the dentist for a root canal treatment. You will encounter a sign stating, "Payment is expected prior to treatment." Since you are in pain and need treatment, you will pay even though your credit is pristine.
Your prospective client is feeling pain if he or she wants to see you. Few people relish seeing an attorney. They will respect you and your relationship more if you insist on payment in advance. You are demonstrating the resolve you will use in dealing with their adversary.
So get payment in advance, for at least 30-60 days' worth of work. Then bill monthly and hold the original retainer as security for the final payment. You'll be happy, your client will be happy, and you can focus on meeting your client's needs.
- David Leibowitz, Lakelaw/Kenosha, Kenosha
Beware of the Crier
One of the hardest things for a new attorney to learn is to not fall for tears. When someone is crying, the natural reaction is to try to help the person. Many children learn to get their way by crying, and as adults they subconsciously use the same tried-and-true technique. Every family has a crier, someone who can turn on and off the tears.
When a person unnaturally cries in my office at the initial conference, I try to step back and focus on the cold facts of the case. This allows me to focus on the content of the case and not agree to offer to work on a contingent basis just to stop the tears. Many times I will turn down a crier and later learn that I was wise to decline the case. Occasionally I still fall for the crier, and I often regret it. - Scott Schroeder, Scott L. Schroeder S.C., Janesville
Wisconsin Lawyer