Your SlideShare is downloading. ×
0
Science of Collecting Fees
Ed Poll – LawBiz
Joshua Lenon – Clio
Agenda
•  Billing Needs (5 minutes)
•  Science of Collecting Fees (40 minutes)
– Reasonable, ethical fees
– Documenting bi...
Instructors
Joshua Lenon
•  Lawyer, admitted in
New York
•  Lawyer-in-Residence
for Clio
Ed Poll
•  Founder of LawBiz
•  A...
BILLING NEEDS
Solo attorneys spend 40% of
time on non-billable tasks.
Tips to Improve Law Firm Billing Productivity – NALS 09/16/2013
Firms 11-20 spend 8% of time
on unbillable tasks.
Tips to Improve Law Firm Billing Productivity – NALS 09/16/2013
Unbillable Tasks
•  Client development
•  Licensing and subject matter
maintenance
•  Team development
•  Business mainten...
$21-30k lost per person per
year spent doing time/billing.
Billable Hours by Bruce MacEwen & Janet Stanton of Adam Smith, ...
Productive firms develop
procedures to fast track non-
billable work.
SCIENCE OF COLLECTING FEES
Collecting Your Fee:
Getting Paid from
Intake to Invoice
© 2014
Law is Both a Business
and a Profession
“Law is not a
profession at all,
but rather a business
service station and
repair ...
Law is Both Profession & Business
“Law is subject to the same laws of
economics as any other business.
Having a great prod...
14
Getting
the work
Doing
the work
Collecting
your billings
Overview
15Copyright ©Karr Associates Inc., 2011
Collecting your fee – from the start
Dealing with slow payers
When non-pa...
Collection Begins at
Intake
•  Understand what client wants
– Seek that result for that client
– Client expectations
•  Wa...
Written Fee Agreements
•  Explain fee arrangement
•  Written engagement letter
– Transaction vs. Contingent
•  Consequence...
Fees
•  “Reasonable” under Rule 1.5
– Excessive (ABA)
– Unconscionable (CA)
•  Types of fees
– Time-based (usually hourly)...
Retainers
•  True retainers
•  Advance deposits
– Evergreen
– Withdrawal
•  After billing statement
•  With notice per eng...
Budgets
•  Estimate future costs and
expenses
•  Make client part of the team
•  Manage client expectations
•  Memorialize...
Billing Statements
Include:
•  Matter
•  Person who performed work
•  Time spent (if relevant)
•  Amount charged
•  When p...
•  Can the client understand the bill?1
•  Value provided?2
•  Does the bill make the services
sound meaningful and reason...
Who Handles Collections?
•  Lawyer involvement
•  Staff involvement
– Obligation to supervise
•  Need for joint plan and
s...
Bills Not Paid Timely
Follow up – “Dial & Smile”
– Did client receive the bill?
– Did client understand what was done
and ...
Interest on Delinquent
Accounts
Generally permitted but
•  Must disclose possibility of interest
fees at outset of represe...
Stopping Work
•  See engagement/fee agreement
•  Impact on client and matter
•  Impact on lawyer-client
relationship
Withdrawal When Non-Payment
27
Permitted
under Rule
1.16
Will not
cause
materially
adverse
effect on
interest of
clients
T...
Alternatives to Non-
Payment
•  Payment plans
•  Revisit when client’s finances
improve
Avoid an arrangement that the clie...
Lien on Client Files and
Property
Check your jurisdiction
•  Can’t withhold client’s file for
nonpayment
•  Can withhold m...
Reporting Client to
Credit Agency
•  NYSBA Opinion 684 (1996) states
that reporting is not permitted
because the disclosur...
Promissory Note to
Secure Payment
Comply with Rule 1.8(a)
•  Fair and reasonable
•  Terms fully disclosed to client in
(un...
Filing Lawsuit
•  Check jurisdiction regulations
•  Review E & O insurance policy
– Carrier may want/require notice
•  Use...
Risk of Cross-
Complaints for Legal
Malpractice
•  Only 10-15% of suits for fees
result in cross-complaint
•  First loss i...
Process Summary
•  First meeting
•  Engagement letter
•  Budget
•  Internal collection procedure
•  Peer review of file
• ...
Resources
•  Collecting Your Fee: Getting Paid
from Intake to Invoice (ABA)
•  Attorney & Law Firm Guide to The
Business o...
Free Weekly Newsletter:
www.lawbiztips.com
LawBiz Management Co.
(800) 837-5880
TOOLS TO AID WITH FEES
Practice Management
Practice Management
Practice Management
ZenCash & InvoiceSherpa
Thank You
Joshua Lenon
joshua@goclio.com
@JoshuaLenon
Linkedin.com/in/joshualenon
Upcoming SlideShare
Loading in...5
×

Science of Collecting Fees

241

Published on

You’ve got the clients. Now make sure they’re the paying kind.

Have you ever had a client who didn’t pay a bill? If you have, the good news is that there’s a way to minimize the chances of this happening again. And if you haven’t, well, there’s a good chance you’ll work with one in the future. In this free Clio webinar, you’ll learn how to bill in a way that’s efficient, straightforward—and most importantly, helps clients pay you in a timely manner.

Published in: Law
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
241
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
8
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Science of Collecting Fees"

  1. 1. Science of Collecting Fees Ed Poll – LawBiz Joshua Lenon – Clio
  2. 2. Agenda •  Billing Needs (5 minutes) •  Science of Collecting Fees (40 minutes) – Reasonable, ethical fees – Documenting billing and oversight – Billing best practices •  Tools to Aid with Fees (5 minutes) •  Questions (10 minutes)
  3. 3. Instructors Joshua Lenon •  Lawyer, admitted in New York •  Lawyer-in-Residence for Clio Ed Poll •  Founder of LawBiz •  Author of The Business of Law
  4. 4. BILLING NEEDS
  5. 5. Solo attorneys spend 40% of time on non-billable tasks. Tips to Improve Law Firm Billing Productivity – NALS 09/16/2013
  6. 6. Firms 11-20 spend 8% of time on unbillable tasks. Tips to Improve Law Firm Billing Productivity – NALS 09/16/2013
  7. 7. Unbillable Tasks •  Client development •  Licensing and subject matter maintenance •  Team development •  Business maintenance •  Billing
  8. 8. $21-30k lost per person per year spent doing time/billing. Billable Hours by Bruce MacEwen & Janet Stanton of Adam Smith, Esq.
  9. 9. Productive firms develop procedures to fast track non- billable work.
  10. 10. SCIENCE OF COLLECTING FEES
  11. 11. Collecting Your Fee: Getting Paid from Intake to Invoice © 2014
  12. 12. Law is Both a Business and a Profession “Law is not a profession at all, but rather a business service station and repair shop.” –  Adlai E. Stevenson, Senator 12
  13. 13. Law is Both Profession & Business “Law is subject to the same laws of economics as any other business. Having a great product is not enough.” Tower Snow, Chairman (2001) Brobeck, Phleger & Harrison San Francisco corporate law firm 13
  14. 14. 14 Getting the work Doing the work Collecting your billings
  15. 15. Overview 15Copyright ©Karr Associates Inc., 2011 Collecting your fee – from the start Dealing with slow payers When non-payment becomes serious•  Withdrawal •  Alternatives to secure payment •  Suit or arbitration
  16. 16. Collection Begins at Intake •  Understand what client wants – Seek that result for that client – Client expectations •  Want vs. Need – Want this client/matter •  “Competent” to handle the matter
  17. 17. Written Fee Agreements •  Explain fee arrangement •  Written engagement letter – Transaction vs. Contingent •  Consequences – Two way street •  Credit check
  18. 18. Fees •  “Reasonable” under Rule 1.5 – Excessive (ABA) – Unconscionable (CA) •  Types of fees – Time-based (usually hourly) fees – Fixed – Contingent – Value – Mixture of above
  19. 19. Retainers •  True retainers •  Advance deposits – Evergreen – Withdrawal •  After billing statement •  With notice per engagement agreement
  20. 20. Budgets •  Estimate future costs and expenses •  Make client part of the team •  Manage client expectations •  Memorialize course of action client approves
  21. 21. Billing Statements Include: •  Matter •  Person who performed work •  Time spent (if relevant) •  Amount charged •  When payment is expected •  What will happen if payment is not timely received
  22. 22. •  Can the client understand the bill?1 •  Value provided?2 •  Does the bill make the services sound meaningful and reasonably priced? 3 •  (If billing cycles are relevant) Has the firm sent the bill when client is likely able to pay? 4 Bills Influence Collections
  23. 23. Who Handles Collections? •  Lawyer involvement •  Staff involvement – Obligation to supervise •  Need for joint plan and staying informed
  24. 24. Bills Not Paid Timely Follow up – “Dial & Smile” – Did client receive the bill? – Did client understand what was done and what was billed? – Does client have any questions or problems with the bill or the services? – When will the client pay?
  25. 25. Interest on Delinquent Accounts Generally permitted but •  Must disclose possibility of interest fees at outset of representation •  Some jurisdictions require written client consent to arrangement
  26. 26. Stopping Work •  See engagement/fee agreement •  Impact on client and matter •  Impact on lawyer-client relationship
  27. 27. Withdrawal When Non-Payment 27 Permitted under Rule 1.16 Will not cause materially adverse effect on interest of clients Time sensitivity
  28. 28. Alternatives to Non- Payment •  Payment plans •  Revisit when client’s finances improve Avoid an arrangement that the client will almost certainly fail to satisfy
  29. 29. Lien on Client Files and Property Check your jurisdiction •  Can’t withhold client’s file for nonpayment •  Can withhold much or part of a file to obtain payment •  Can withhold only work product •  Can withhold only opinion work product •  May withhold file even if client prejudiced
  30. 30. Reporting Client to Credit Agency •  NYSBA Opinion 684 (1996) states that reporting is not permitted because the disclosure is not reasonably necessary to collect the fee
  31. 31. Promissory Note to Secure Payment Comply with Rule 1.8(a) •  Fair and reasonable •  Terms fully disclosed to client in (understandable) writing •  Advised in writing to seek independent counsel •  Signed agreement documenting informed consent
  32. 32. Filing Lawsuit •  Check jurisdiction regulations •  Review E & O insurance policy – Carrier may want/require notice •  Use outside counsel – Objectivity – Better protection for confidences
  33. 33. Risk of Cross- Complaints for Legal Malpractice •  Only 10-15% of suits for fees result in cross-complaint •  First loss is best loss •  Need to make sure case is one worth sending to suit •  Peer review of file before suit is filed
  34. 34. Process Summary •  First meeting •  Engagement letter •  Budget •  Internal collection procedure •  Peer review of file •  Arbitration if required •  Write-off •  Lawsuit
  35. 35. Resources •  Collecting Your Fee: Getting Paid from Intake to Invoice (ABA) •  Attorney & Law Firm Guide to The Business of Law® (ABA, March 2014) •  www.lawbiz.com •  www.lawbizblog.com •  www.lawbiztips.com •  www.lawbizregistry.com
  36. 36. Free Weekly Newsletter: www.lawbiztips.com LawBiz Management Co. (800) 837-5880
  37. 37. TOOLS TO AID WITH FEES
  38. 38. Practice Management
  39. 39. Practice Management
  40. 40. Practice Management
  41. 41. ZenCash & InvoiceSherpa
  42. 42. Thank You Joshua Lenon joshua@goclio.com @JoshuaLenon Linkedin.com/in/joshualenon
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×