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Be proactive! Develop policies and procedures designed to preserve client relations and avoid collection problemsbefore they start. In short, follow the seven golden rules of billing and collections:
- Always take the time to discuss fees, costs, and billing practices. Most nonpaying clients who file retaliation suits or malpractice counterclaims do so because they never understood what the lawyer’s services would cost.
- Never leave home without a written fee agreement. Be specific and complete. Your agreement should: (a) specify the scope and timing of services; (b) describe what the client is expected to pay for and when; (c) explain billing practices; (d) identify what will occur if payment is not timely made. Losing a potential client who refuses to negotiate and agree to a comprehensive fee and engagement agreement is a small price to pay compared to defending yourself in a malpractice claim or disciplinary proceeding.
- Consider alternative fee arrangements - flat fees, fixed fees, unbundled fees, evergreen retainers, or “last month’s rent.” Clients cooperate more fully when they are financially invested in their case. If the client is unwilling to commit financially, the matter quickly becomes your problem rather than the client’s.
- Keep detailed records documenting time spent and submit itemized bills
to clients on a regular basis. Inconsistent billing practices disrupt firm cash flow, infuriate clients, and make collection more difficult. - Be a smart biller: (a) review “pre-bills” and statements carefully; (b) if you make a mistake, correct it quickly and accurately the first time; (c) send statements before clients receive their paychecks – usually just before the 15th and again at month end. If you serve corporate clients, send bills in a manner and format that works for the accounts payable department; (d) always include a due date on all statements (most clients prioritize bills based on due date); (e) offer a carrot instead of a stick. In lieu of late fees or interest, offer clients a discount if payment is received within 10 days of the billing date.
- Do not allow outstanding fees to accumulate during the course of representation. As soon as a payment is missed, call the client. Get to the root of the nonpayment. Is the client dissatisfied? If a client becomes seriously delinquent, terminate the attorney-client relationship and withdraw from representation if possible. Comply with all provisions of ORPC 1.16 as well as applicable court rules. Read more about the do’s and don’ts when ending representation.
- Offer to arbitrate fee disputes through the Oregon State Bar’s Fee Arbitration
Program or consider other alternative dispute resolution methods. x x x."
