I am not a bank

[davidwiz]

I am not a bank. My firm is not a bank. We are not in the business of lending money. We are in the business of practicing law.

I hate it went clients of ours say they can't pay their invoices b/c they claim they don't have any money. If you didn't have the money before you hired us, then you should have 1) either not hired us or 2) said something so that we could work out a payment plan (which we do on occasion) - otherwise, we are going to hold you to the contract that you sign that says you are going to pay us in full upon receipt of said invoice and we are going to charge you interest if you don't.

I especially hate it when a client comes to us days before a filing deadline and we (stupidly) advance the filing fee for the client and then it takes months for the client to repay us.

We do get a deposit for hourly work, but if the deposit money is used up and the client stops paying their invoices, it is hard sometimes to get a court to allow you to withdraw (which you must do in PA and NJ), especially if you are knee-deep in litigation.

The sad thing is that most, if not all, lawyers have this problem.

[Carlos]

The sad thing is that most, if not all, lawyers have this problem.

Too true. I once worked for a lawyer who primarily handled immigration cases. The rate of default was very high. And chasing down a deadbeat client is rarely cost effective.

[AikiDale]

You are 100 percent correct, law, honor and common decency are on your side. People should respect their contracts and you should not ever be in this situation.

Wait for it....

Now just how much sympathy do you really expect a Philadelphia lawyer to get?

[John Heiter]

I have a friend who is a fairly prominent attorney who has a method for dealing with this sort of thing. He had a client (a pretty wealthy guy) who after winning his case complained that the bill was too high. Jack's response was "No problem at all. If you don't feel the bill was appropriate, then don't worry about paying me anything at all. I'll just write it off and next time you need help you can find a different attorney". By the next morning the guy had paid in full. Probably wouldn't work in every case, or even most cases, but I thought it was a pretty classy way to handle it.

[John Dunn]

Now get out of bed at 1:00 in the morning, spend all night fixing some drunk guy's multiple long bone fractures, then listen to him whine about a limp and how he hasn't decided whether to sue you or not. All with no reimbursement as not only doesn't he have health insurance, but he doesn't have auto insurance. I feel your pain, some people have no shame.

[AikiDale]

It could be worse:

GEORGETOWN. Ky. (AP) -- A jail inmate punched his court appointed-attorney after a Scott County judge refused to appoint him a different attorney.

Peter Hafer is in jail, facing burglary charges.

On Monday, the 30-year-old Cynthiana man tried to convince Judge Rob Johnson that his trial should be delayed and he should be given a new attorney.

When the judge told him he could not choose who would represent him, Hafer punched his attorney, Doug Crickmer, in the jaw.

Hafer said later at the Scott County jail that he "just snapped."

Another attorney will be assigned to represent Hafer, who will face charges in the assault.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

[Carlos]

It could be worse:

GEORGETOWN. Ky. (AP)

Another attorney will be assigned to represent Hafer, who will face charges in the assault.

)

Guess that's one way to get an new public defender.

They don't pay those folks near enough considering what the work entails.

[bountyhunter]

The reality is, the whole world is filled with people like this. When I worked at Power ten, the president Joe Varozza was notorious for demanding "Net 30" from anybody who bought our products (which means full payment within 30 days) and he would go like a rottweiler on anybody who didn't.

Of course, to the vendors we bought our materials from, they were lucky to get paid in 90 days.

The world is full of deadbeats.

If not, there would be no Judge Judy show....

Edited February 5, 2008 by bountyhunter

[bountyhunter]

Now get out of bed at 1:00 in the morning, spend all night fixing some drunk guy's multiple long bone fractures, then listen to him whine about a limp and how he hasn't decided whether to sue you or not. All with no reimbursement as not only doesn't he have health insurance, but he doesn't have auto insurance. I feel your pain, some people have no shame.

Wait until you hear this: we get people from various foreign countries (I won't list because I'd be accused of racism) who fly here and at the airport "suddenly" have chest pain. They arrive at the county hospital, dripping in jewelry escorted by their family here, and they get tests paid for by Medical.

The tests show the guy has multiple blocked arteries and heart disease that has been ongoing for decades.... but, we here in kali will provide state of the art multiple bypass surgery from the best docs on the west coast. And he will get a couple of weeks of ICU if he needs it.

And after running up a tab of a million bucks, he will take his gold and diamonds and climb back on the plane and fly home and we can not legally collect a penny from the family who sponsored his guest visa.

Honestly, some people really have no shame. They are just a bunch of thieves.

[ipscbob]

David, you may want to explore the possibility of moving to what is commonly called an "evergreen retainer". This is becoming more common in our area of law and it makes you sleep a whole lot better knowing that you will always get most if not all of the last invoice paid.

[SiG Lady]

In our law office, many services are pay-in-advance. But not all. If a case drags on beyond original expectations (especially our personal injury cases), then the atty is perhaps risking his time. Though most clients pay their bills, I spotted a short list of clients the other day who'd been "sent to collections." Thank goodness it was a relatively short list. In the case of our bankruptcies and divorces, however, the fees are paid up-front before filing or the filing doesn't happen. Period.

[John Dunn]

I would think stiffing a lawyer isn't one of the bightest things one could do.

[Rob Boudrie]

Deadbeating doctors has gotten to the point where the practice I use has a sign up announcing that "self-pay" patients must leave a deposit for the estimated amount before seeing the doctor, and then settle up the adjustment in either direction when leaving the office. I've seen "payment expected when service rendered" signs for years, but this was the first time I've seen a medical practice operate like a pre-pay gas station.

[jhgtyre]

So what is your APR?

-ld

[davidwiz]

David, you may want to explore the possibility of moving to what is commonly called an "evergreen retainer". This is becoming more common in our area of law and it makes you sleep a whole lot better knowing that you will always get most if not all of the last invoice paid.

That is how are fee agreement is worded. However, like I said, if we start doing court work after entering our appearance, in PA and NJ you need court approval to withdraw your appearance (i.e. stop representing your client). That whole process of filing the motion to withdraw and getting a decision from the court takes at least 30 days, all the while you as the attorney have to continue representing your client, which means you are racking up billable hours (and maybe costs too). We do try to get a large enough deposit, but sometimes we underestimate how long the work is going to take us to do.

[davidwiz]

In our law office, many services are pay-in-advance. But not all. If a case drags on beyond original expectations (especially our personal injury cases), then the atty is perhaps risking his time. Though most clients pay their bills, I spotted a short list of clients the other day who'd been "sent to collections." Thank goodness it was a relatively short list. In the case of our bankruptcies and divorces, however, the fees are paid up-front before filing or the filing doesn't happen. Period.

So far, we've only had 1 client file for bankruptcy. While they do owe us a large amount, they owe another law firm about 50x what we are owed.

For non-court work, such as doing a contract, incorporation, etc. we do try to get paid up front.

[davidwiz]

So what is your APR?

-ld

18% annual on anything older than 30 days.

[davidwiz]

I would think stiffing a lawyer isn't one of the bightest things one could do.

You would think, but it is a huge problem, for law firms of every size. Even for very large law firms with hundreds of attorneys, they have clients who don't pay their bills. From what I can gather, the only attorneys who don't really have to worry about not getting paid are the ones doing pure contingency work (meaning you get paid a % only if you recover money for your client), such as personal injury or collections, as any money recovered is sent directly to the attorney, who then takes their fee out and any costs advanced and sends the balance to the client.

[Chriss Grube]

Lay down with dogs and don't be surprised when you get fleas!

[ipscbob]

David, you may want to explore the possibility of moving to what is commonly called an "evergreen retainer". This is becoming more common in our area of law and it makes you sleep a whole lot better knowing that you will always get most if not all of the last invoice paid.

That is how are fee agreement is worded. However, like I said, if we start doing court work after entering our appearance, in PA and NJ you need court approval to withdraw your appearance (i.e. stop representing your client). That whole process of filing the motion to withdraw and getting a decision from the court takes at least 30 days, all the while you as the attorney have to continue representing your client, which means you are racking up billable hours (and maybe costs too). We do try to get a large enough deposit, but sometimes we underestimate how long the work is going to take us to do.

If it is truly evergreen then it is like a security deposit. The retainer goes into your IOLTA account and the client is responsible for paying the bill within 30 days. If they don't pay, then the retainer is used to do the motion to withdraw. As you know, though, the retainer must be large enough to get you though the motion.

Edited February 6, 2008 by ipscbob

[SiG Lady]

Our well-run 'Urgent Care' clinic (downtown, connected to the hospital, but is not an "ER") takes a $50 deposit fee UP FRONT when you're interviewed and briefly triaged before seeing a physician. I'm sure that helps. They didn't do that in the recent past. Then after you've been treated, you receive a bill in the mail for the remaining charges.

[ipscbob]

I would think stiffing a lawyer isn't one of the bightest things one could do.

You would think, but it is a huge problem, for law firms of every size. Even for very large law firms with hundreds of attorneys, they have clients who don't pay their bills. From what I can gather, the only attorneys who don't really have to worry about not getting paid are the ones doing pure contingency work (meaning you get paid a % only if you recover money for your client), such as personal injury or collections, as any money recovered is sent directly to the attorney, who then takes their fee out and any costs advanced and sends the balance to the client.

It is a huge problem for all Attorney's who charge hourly rates. As SOP, most do not bring deadbeat clients to collection for unpaid bills for very good reason. A collection action will often lead to a malpractice suit. Even though the malpractice suit is baseless, their insurance rates may skyrocket regardless of the result. I have first hand experience with this

[sslav]

It goes both way however. I have no idea how widespread it is, but I personally know two lawyers who have admitted in a private conversation that they overbill their clients - and not by a little.

Hey, if everyone paid on time & respected contracts, wouldn't we need a lot fewer lawyers?

Slav

[davidwiz]

It is a huge problem for all Attorney's who charge hourly rates. As SOP, most do not bring deadbeat clients to collection for unpaid bills for very good reason. A collection action will often lead to a malpractice suit. Even though the malpractice suit is baseless, their insurance rates may skyrocket regardless of the result. I have first hand experience with this

In some states, the statute of limitations for malpractice is shorter than the SOL for a contract, so what some attorneys do is wait for the malpractice SOL to expire before trying to collect.

I have had clients praise our work after everything was done and then start to B&M months later when we are still trying to get paid, complaining about things never brought up before all in attempt to get out of paying their bill.

Edited February 7, 2008 by davidwiz

[davidwiz]

It goes both way however. I have no idea how widespread it is, but I personally know two lawyers who have admitted in a private conversation that they overbill their clients - and not by a little.

Hey, if everyone paid on time & respected contracts, wouldn't we need a lot fewer lawyers?

I'll be the first to acknowledge that there are some attorneys out there who over bill. Heck, I use to work for one. I even notified the NJ and PA attorney disciplinary committees, who both did absolutely nothing. Needless to say, I'm not working for that attorney anymore (whose practice has since imploded and is now getting visits from the IRS). IMHO, the state attorney licensing boards are too lenient on bad attorneys - which does no one any good.

I seen some law firms' bills for work they have done and I have no idea how they spent as much time as they claimed to have spent on the work. I don't know if it is blatant over billing / fudging the time sheet or the law firm has a set rate schedule for doing certain pieces of work, e.g. bill "X hours" for drafting a complaint, "Y hours" for doing a motion, etc. that latter of which is still unethical, IMHO, as it might not really have taken the attorney "X hours" to do the complaint, but rather much less time.