Little needs to be said to the solo or small firm lawyer, new or old in practice, about the challenges of billing and collecting fees. This is a pertinent issue because although we may love practicing law, we would also like to earn a decent living. In the coming weeks we will be providing a seven part blog series titled Best Practices in Billing where we will share information compiled as part of our Practice Management Advisory Service (PMAS) with the D.C. Bar.
The authors of this blog series--Daniel Mills, assistant director for PMAS, Regulation Counsel and Rochelle Washington, senior staff attorney, PMAS--together have over 35 years of direct experience building and managing solo and small firms from the ground up. We understand the plight of the lawyer who has performed what s/he believes to be a good, if not exceptional, job for a client only to find that the client takes issue with the bill or just won’t pay you for all you have done.
Rochelle Washington: Billing is a huge issue for the solo and small firm practitioner because we know that if we don’t collect from our clients, we usually don’t have recourse without repercussions.
Yes, we said it. We know that if we pursue our clients legally for the fees we earn, we could end up with a bar complaint or counter-claim that we don’t have the time or resources to deal with. In an effort to avoid that path all together, we intend to provide you with ways you can make the billing and collections process easier both for you and more importantly for your clients. We believe that sharing our combination of insightful practical experience and knowledge gained during our solo and small firm careers will prove useful.
GET PAID UP FRONT
The best way to ensure that we are paid for the professional problem solving that we do is to take on only clients who pay us and preferably up front. We are advocates of the Zips Dry Cleaners model for the law firm: no inventory, nothing perishable, and payment up front.
Daniel Mills: When a prospective client asked me why I had to be paid up front, I would say it is so I only have one thing to worry about and that is solving your problem. Otherwise I have two things to worry about. I never had to explain the second worry.
There are two essentials for the process of being paid for professional problem solving. The first is that we create incentive for our client to pay us either now, before we do the work, or as we do the work. The second is that we have a highly functioning system for informing and educating the client about the problem solving we are performing and that asks for payment. This is also known as the billing process. The process should avoid angering or annoying the client. It should also make it easy for the client to pay.
There are two truths about being paid for problem solving that are important to acknowledge now. The first is that there is a moment in time when the client really needs us. At this moment, the need is at its highest level. Over time the need usually wanes and with some it vanishes all together. The second truth is that clients read what we send them about what we do and what they owe us. They may not read much else but they read the bills. If you can time the request for money to the height of the need for your services, you are likely to get paid. If the need vanishes all together or worse yet, if it is replaced by indifference, resentment, confusion or anger, you are not likely to get paid.
Next Week: Matching value and need.
The PMAS is a multifaceted Bar program designed to help Bar members improve and enhance management skills in the practice of law. Daniel Mills and Rochelle Washington can be reached at 202-737-4700, ext. 3212 and 3217, respectively, or at firstname.lastname@example.org.