Recovering Fees

You have burned nights on the file, but now your client is not paying on the bill. What are your alternatives? Here are some tips on how to go about recovering on your bill.

The first question to ask yourself is:

• Why is the client not paying?

Why is the Client Not Paying?

Most of the time, fee-collection problems are the result of misunderstood or unmet expectations.

1. A warrant to act and a written fee agreement at the outset of your representation will go some way towards establishing expectations for both you and your client. Your letter or fee agreement should set out:

• what services and expenses you will bill for;
• when you will bill and when you expect payment;
• how much you estimate the total bill will be; and
• the consequences of non-payment.

2. If you and the client have a fee agreement and the client does not pay your bill, is it because the client cannot pay or because he or she would not pay? By refusing to pay your bill, the client may be attempting to tell you he or she is dissatisfied with the outcome of the matter, the size of the bill, the quality of your service or all of the above.
   Before billing, a good exercise will be to make a candid assessment of what you have accomplished for the client. How much would you be willing to pay for the results you got?
3. Even if the outcome of the matter is favourable, clients may be unhappy with your representation. Did you treat the client with courtesy and respect? Are you confident that your work meets the standard of care?
4. Look upon regular billing as a positive way to communicate with your clients. An itemised bill tells your clients what you are doing on their behalf. By paying your bill, your clients are telling you they are happy with your representation.

The next question to ask yourself is:

• What if a client cannot pay?

What If a Client Cannot Pay?

If a client is financially unable to pay, consider alternatives to lawsuit. You are no more likely to collect on a judgment than you are on an unpaid bill from a client who is in dire financial straits.

You may want to consider reducing the bill, writing it off or working out a monthly payment plan. Some clients would appreciate being asked, 'How much can you afford?' and may respond with a proposal to which they are more likely to adhere.

If you have some reservations about a client's willingness or ability to pay, you can request a retainer from the start. Initial and periodic retainers can help you assess how serious the client is about the legal matter and assure that you will be paid.

Why am I Suing My Client?

After you have exhausted all the traditional methods of getting paid for your work, you may feel that a lawsuit is your last recourse.

Asking yourself the following questions before starting an action for recovery is good practice:

1. Are you doing this for the financial good of the firm?
2. Or do you have an emotional need to prove a point?

In the end, lawyers rarely benefit — emotionally or financially — from successful judgments against clients. If you are unwilling to seize furniture, garnish bank accounts or request examinations under oath, then you have probably wasted the filing fee in obtaining judgment.

In other cases, you may be met with retaliation, which is far less gratifying, in the form of a request to tax your bill or even a complaint of overcharging.

In most cases, the freedom to walk away from an unpaid bill can be enormously gratifying. Not only does an unpaid balance keep the client out of your office (at least until the next time he or she needs your services), you have at least the satisfaction of knowing that the client owes you. To some, owing gratitude is worse than owing money.