For smart people, when it comes to getting paid, lawyers can be stupid.
When I was a young lawyer, Gordon was a senior partner who had a client named Len who provided the firm many hours of billable work, all of it urgent. Len wanted every invoice reduced for some reason or other, and paid when he felt like it, usually around 90 days if pestered and never if not pestered. When the Managing Partner had enough, he told Gordon to fire Len. Gordon flew into a rage and screamed, “there is no fudging way that I am going to fire my best client.”
At the opposite end of the spectrum was another senior lawyer named Paul, who told me that if a client did not pay my bill, I should be personally offended.
I eventually started attending the Paul school of thought.
Over time, I settled on the following truths, which are applicable to most lawyers:
- Unless you are doing pro bono work, there is no point to working unless you are getting paid.
- The time to decide to do pro bono is when you start the work, not when you realize part way through that the client cannot afford you.
- Never feel guilty about what you are charging. If you are not providing value to your client, lower your rates or reduce your bill. If you are providing value, be sure that you are going to get paid.
- Choose your clients well. A pulse is not sufficient qualification for becoming a client, no matter how unbusy you are.
- Learn to screen the losers out at the initial interview. Do not take them on if you do not like them or trust them, or if they think that they know better than you, or if they are uninformed about what is involved in the work but still know what it should cost, or if they appear to be resistant to following advice. Or if they are creepy.
- Recognize some of the danger signs. How is it that they have been in business for 30 years but don’t already have a lawyer? Or why are they leaving their existing lawyer who has a decent reputation? Are they talking smack about their previous lawyer and how they were ripped off? Is the first file going to be defending against the collection efforts of the previous lawyer?
- The most important factor in getting paid is good communication. Tell clients what things are going to cost. Provide fixed fees or estimates to the next predictable stage of the work. Revise estimates as things change. Question instructions that will result in fees being out of proportion to the benefit to be obtained by charging them.
- Always ask a new client for a deposit, unless they come highly recommended from a trustworthy referral source. Those who offer a deposit without being asked or readily agree to provide one most likely intend to pay you. You probably don’t even need one from them but take it anyway. Those who resist or make you chase it down after agreeing to provide it are going to be trouble.
This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.