Fees disputes commonly lead to unpaid accounts, Law Society complaints and/or malpractice claims. For these reasons you should do your best to avoid fee disputes with your clients. Here are some simple resolutions that will help you accomplish this:
- I will get a sufficient retainer at the start of a matter: At the start of the matter ask for a retainer that is sufficient to do all of the initial work on the matter. Ask for a retainer that will cover all the work – asking for less gives the client unrealistic expectations about fees and means you are facing collection issues when you ask the client to replenish the retainer.
- I will ask clients to replenish the retainer before it runs out: Monitor your work-in-progress so that you don’t perform work for which you may be unable to collect payment, and request replenishment of the retainer before it is exhausted.
- I will bill my matters regularly: Keep the client informed of the ongoing costs of the work you are doing for them by sending a regular bill. Consider billing monthly, or send accounts at milestones to report how the matter is progressing.
- I will stop work if a retainer is not replenished or I am not paid: Monitor your work-in-progress and stop working if a retainer is not replenished. Don’t wait until just before a court date to try and get off the record on a matter.
- I will not sue for fees: Suing a client to collect an unpaid account almost guarantees you will face a counter-suit alleging negligence. In most cases that allegation of negligence will be completely unfounded, but it still will trigger a duty to report a claim to LAWPRO.
- I will use the reports in my accounting software to monitor retainer amounts, WIP hours and outstanding accounts: Most law office accounting packages have reports you can run that will tell you retainer amounts in trust, WIP hours and outstanding accounts. Use these reports to proactively manage your retainer and billing practices so you don’t find yourself in a position of needing to sue a client to collect an outstanding account.
These resolutions were taken from "New Year's resolutions for a better practice and a new you" which can be found in the December edition of LAWPRO Magazine.