By Christopher Keyser
For my colleagues running their own practices, you know this statement is (sometimes) an ugly reality. This doesn’t mean we don’t care about our clients or don’t provide the best representation we can, it simply means we enjoy eating dinner every night. I learned very quickly after starting my practice that nailing down a payment collection method is crucial.
In asking other defense attorneys for management advice, the overwhelmingly unanimous response was this: “Get your money up front!” This tip doesn’t apply to all areas of practice but it’s surely the criminal defense attorney’s mantra. With the down economy however, clients are less likely to hand over large, nonrefundable fees and more likely to ask for a payment plan, a reduced fee, or both. Whether you accept a payment plan with a client is entirely up to you but chances are you won’t be able to avoid it forever. Here are a few pointers I picked up on collections:
Be Firm : Your clients expect excellent representation and in return, you expect to be compensated for your services. When going over your retainer agreement with a client, be firm with your demands. If you know you need at least 50% of your fee to begin the case, say so. If you agree to a payment plan with clear deadlines, be sure to follow them. You don’t need to be rude with clients when discussing money but being firm with your procedures helps ensure that the relationship’s focus is the case and not your fee.
Credit Cards : Not everyone has a credit card but if it’s an option, utilize it. The nice thing about credit card payments is that they provide instant funding directly to your operating account. Also try using credit cards as a secondary payment method. Some clients prefer paying by check or cash but it may not hurt to have their credit authorization as a default measure should their payment arrive late or not arrive at all. Just make sure the terms are clear and agreed upon.
Co-Signors : Having more than one person assisting with paying your fee can be a good thing. Co-signors are typically parents of clients or sometimes other family members. In the event your client defaults on payment(s), you have an alternative source to turn to.
Post-Dated Checks : I’ve never been a fan of this. Some family law practitioners I’ve talked to swear by this collection method but in my opinion a post-dated check holds no value if a client calls you the night before with instruction not to cash. This method has both worked and failed for me, so use your judgment. Once you get a feel for the payor(s), you’ll be able to tell if this method will work.
Follow Your Instinct : Selling your services to clients is definitely an art but getting paid for your services should be systematic. If during a consultation you feel that a client may not come good on an agreement for fees, don’t be afraid to walk away or at least demand an up-front amount you can live with should subsequent payments fall through.
As young attorneys, we obviously want experience and income, but severely underbidding the competition just to snag a client not only cheapens your degree, it can potentially affect the quality of service you provide. Similarly, agreeing to a ridiculous payment plan that’s sure to fail, or taking a case with no money down (the ultimate “no-no”) will only leave you feeling bitter and undervalued. Lastly, don’t be afraid to turn down a case that doesn’t meet your firm’s criteria. It’s great to take pro bono cases, just make sure you’re the one picking them and not vice versa.