Billing and collecting are among the core activities of a business’ day-to-day operations. This is as true for law firms as for any other type of business, though many law firms do not put procedures in place to ensure billing and collection duties are completed in a timely and efficient way. Ignoring the importance of billing and collections can result in numerous delinquent accounts, as many law firms can attest. These delinquent accounts sometimes harm the relationship between lawyers and clients, and can result in legal disputes and other undesirable situations.
From a risk-management perspective, it is often unwise for law firms to sue clients for unpaid legal fees. Bringing suit against a non-paying client is likely to result in one of two outcomes — a default judgment against a judgment-proof client or a counterclaim against the suing attorney for legal malpractice. For this reason, suing a client for unpaid legal fees is a very high-risk, low-reward practice. A better approach to billing and collections is to avoid delinquent accounts altogether by developing an effective billing and collection strategy from the outset of the representation.
The following suggestions…
