Michigan

Attorneys...use these tips to collect your fees...

Steve Harms, one of the giants in the legal debt collection community, spoke at the recent ICLE program. He spoke on the issue of attorney liens. Like us at Nitzkin and Associates, he does a lot of collection work for attorneys. He raised some very interesting points and gave us these tips for collecting fees for other attorneys:

1. Wait 2 years after the last day of service before suing the client. Once the 2 year statute of limitations for malpractice has run, you can sue. Note that malpractice can be used as an offset to the Plaintiff?s bill, it cannot be used as a counterclaim. Some judges do not care for this technique, but that is just tough because the statute of limitations is what it is.

2. Offer your client a discount to pay early. Everyone loves a discount. Remember, you will most likely kill a pile of time pursuing the debt yourself. Alternatively, you will end up paying 1/3 of what your attorney collects if you outsource the collection of this debt. Put your pride aside and make a business decision to recover as much as you can from this debt.

3. Be aggressive about collecting your bills. Remember the squeaky wheel gets the grease. Issue monthly statements. Keep your name and your bill in front of their face on at least a monthly basis and enclose a self addressed stamped envelope. Make it easy for your client to pay.

4. Charge interest on your bills. Make sure that you have a written fee agreement that provides for interest. In fact, for some of you, I would strongly advise, get a written fee agreement. The days of providing legal services on a handshake and expecting to get paid are long gone. People have lawyers today and they are not afraid to use 'em.

5. Make telephone calls to collect. Statistics show that the telephone is still the strongest tool short of litigation to collect a bill. As a corollary, be courteous when calling the client. Allow them to spew off about why they have not paid your bill. People like a forum to be heard. When you call a client for payment, YOU ARE THAT FORUM. Be courteous and listen to what they have to say. When the client is done speaking, circle back to how the two of you can team up to resolve the problem that stands between the two of you. Be flexible and creative and of course, send a confirming email or letter that discusses the agreed upon resolution. If the client wants a break, give it to them.

6. Progress bill ? People hate to receive lump sum bills. Send monthly progress bills to the client. Do not let the client get too far ahead of you. I would advise no more than 30 days. If the client has not paid last months bills within 30 days, you should really examine how much more credit you are going to extend to the client.

Full post as published by Michigan Collection Law Blog on August 21, 2008 (boomark / email).