It is no secret that law firms sometimes encounter clients that are less than enthusiastic about paying their bills. When a client balks at paying, there can be an enormous strain on the relationship, just as there can be "trickle down" stress at the firm for those attorneys who spent valuable time on the case. When a firm is unable to collect full payment in these situations, often the younger lawyers on the case are the first to suffer. They can have their time and billings cut, which can affect not just their compensation and progress in the firm, but also their confidence and belief that their contributions are being valued.
Sometimes these situations are well beyond the control of the lawyers involved, especially the younger lawyers. For example, a client may fall on hard financial times, change owners, or simply refuse to pay. There may also be business development reasons that prompt a firm to write off amounts that they could otherwise legitimately claim. Nevertheless, there are a few proactive steps all lawyers, including younger lawyers, can try to take to minimize the risk that they will be on the short end of the deal.
One of the best ways for lawyers to minimize this risk is to set clear expectations in advance about what work is needed, how long it will take, and what it should cost. Understandably, this may be easier said than done. Often we do not know precisely how much work will be involved, how long it will take, or what it should cost. Moreover, sometimes shrewd clients will shop around for lawyers who will say just what they want to hear about the prospects of their case.
These realities, however, are no reason to avoid having a conversation about the expectations of the client and the lawyers. These expectations can include what the initial fees will likely be, what retainer is appropriate, and the range of possible outcomes for the case. While we do not have the benefit of a crystal ball, we do have experience we can draw on from other cases. A lawyer can usually forecast what will be needed in the short term and can give predictions about low and high ends based on prior experience. If the client is uncomfortable with those estimates or is unwilling to pay an appropriate retainer, it is far better to find out before expending time on a matter that may not be paid. Furthermore, setting these expectations early will allow the client to make a more informed decision about the case, which, in turn, usually leads to better client satisfaction.
Younger lawyers may not be involved in these direct client discussions, but they can still help set and manage expectations in a way that minimizes their own risk. Younger lawyers can make sure that their more senior colleagues have had these client discussions and that any appropriate retainers have been paid. They can ask for clear direction on how much time and money should be spent on certain projects and can speak up if the expectations seem unrealistic. They can keep an eye on the timely payment of prior bills to make sure additional work is not being done on non-paying cases. They can even ask to help generate the client's bill so that they understand what all the other moving parts are and what a client is ultimately being asked to pay.
Without a doubt, this is not the fun part of practicing law and is, in fact, something many lawyers deliberately avoid. Nevertheless, setting and fulfilling expectations is a critical step toward more profitable firms, more successful younger lawyers, and happier, better served clients.
Tom Vanderbloemen is an attorney at Gallivan, White & Boyd, P.A. in Greenville, South Carolina. He can be reached at TVanderbloemen@gwblawfirm.com or (864) 271-5428