Do It or Defer It
When a lawyer gets an inquiry for a new matter, whether from a current or potential client, the lawyer can either take on the matter, via accomplishing the task immediately, or perhaps putting it off, or deferring it, until the lawyer has time. To choose to “do it” or “defer it” and then actually take steps to complete the task can be time-consuming. A lawyer has two additional options — delegate or dump it.
Delegate or Dump It
LawTake (lawtake.com) is a website where attorneys can upload documents and videos to help people resolve legal issues. Lawyers can set a price for documents or videos that are informative and an effective means for providing legal information. For example, I created a 30-minute long business formation video for people who come to me and want to start a business. I tell them to first watch my video to save money on legal fees. I also have business legal documents that I sell on the site and most cost between $10 and $100. Not only do potential clients appreciate the cost-effective service, but also even current clients can find low-cost documents that they can fill out and send to me for a final review. What first started as an idea for an alternative source of revenue from people who might not otherwise be able to afford my legal services, has now also become a beneficial service for not only current clients and potential clients, but also a place to refer potential clients that don’t fit within my areas or that I must pass on.
Accordingly, when I get a call from a potential client, or even a current client whose latest retainer has been exhausted, who wants me to get started working on something prior to making payment, I tell them the following: “My rate is heavily discounted because I require retainers to be paid up front. As a startup founder myself, I understand how cash flow does not always keep up with expenses, so I try to keep my startup clients in check by requiring money in before money out on legal fees. In my business formation video on LawTake, I go over a formula you can use to help you understand when it’s best to limit your liability, such that you should protect your assets. If you have assets to be able to afford legal, then you should not be pennywise and pound-foolish. Similarly, LawTake’s press release includes the following statement: ‘If an individual or a company is spending significant amounts of money on lawyers, the only people making money are the lawyers.’ Your company needs to make money. Please check LawTake.com for what you are looking for.” Lawyers are not credit card companies — we do not have to offer credit.
When Dumping Becomes Withdrawal
Unfortunately, I discovered what a problem client is, and I had to learn the hard way how to deal with one. Fortunately, I was able to withdraw representation from that problem client, who had not paid his last bill, which was several thousand dollars, aft er about four months. I had already been retained by the client for several months, but this client had finagled out of making the latest payment when requested. A mentor told me: “Clients can be jerks, so long as they are paying their bills.”
When I withdrew, I emailed: “We have had repeated differences as to when I should represent you, how much I should be paid and when I should be paid. Accordingly, I cannot represent you any longer.” And I cited provisions of my legal services agreement that allowed withdrawal under these circumstances.
After significant contention, I am thankful that I was able to get him to pay in two increments and he provided some services in exchange for a slight reduction in his legal bill. If you find yourself in a fee dispute, you must be able to:
- Convince your client of the value of your legal services.
- Make your client aware of the risk to him or her if you have to resolve this with the state bar fee dispute arbitration program. You have a signed retainer, ample evidence of work completed, with updates about working on his matters.
- Perhaps offer a payment plan or barter arrangement.
- Consider what you would have made if you lowered your fees by 20%, maybe the discount is worth it to give you peace of mind and move on.
The importance of up front retainers cannot be understated. Had I known what I know now, I would have referred him to LawTake or Legal Aid and given him the “money in before legal fees out” talk mentioned above. In conclusion, before you add to your already full plate of rewarding legal work, send LawTake your tired, hungry and poor. Suzanne Natbony