Responding to a Write-down Request

Published August 20, 2013

Low realization (the percentage of what is billed that is actually collected) results from not telling clients at the beginning of an engagement what is expected of them through an effective, written collection policy. But even with a collections policy in place and spelled out in detail, a dilemma in these tough economic times may occur. If a client receives the lawyer’s bill, contends that it is too high, and refuses to pay it unless the invoice is written down, there are at least two ways to respond to such a request, depending on how the collection policy for the engagement has been structured.

If the client signed an engagement agreement before the matter began, the lawyer is under no obligation to write down the invoice simply because the client thinks it is too high. Because the engagement agreement is the foundation for all invoices, be as detailed as possible in the terms spelled out. Two criteria in particular can prevent a write-down request. The first, as noted previously, is to include a written fee agreement. Second is to define the collection cycle that sets specific dates of the month by which clients will be billed. For example, state in the agreement that invoices will be sent on or about the twenty-fifth of the month with payment due by the twentieth of the following month. With the terms established, bill in a regular and timely way, using statements that contain a full narrative of the work done and the goal accomplished by that work.

However, a lawyer could consider a fee write-down to adjust bills that are in dispute in order to match value as seen by the client. The only professional requirement is that a fee should be reasonable, and in proportion to the value of the services performed. Does the lawyer have the skill and experience to justify the fee? Does the client understand the amount and nature of the fee and the work done to justify it? Answering no to either of these questions could mean that an invoice write-down is warranted.

Note that what is being discussed here is not the result of a matter but the value a client attaches to it. For lawyers to guarantee a result in a legal matter comes under Rule of Professional Conduct 7.1’s prohibition of false or misleading communication, which the ABA’s commentary says includes “lead[ing] a reasonable person to form an unjustified expectation” about what an attorney can accomplish. However, lawyers and law firms can be held accountable to a level of effort and standard of performance for service within the lawyer’s own control, and a firm may feel that a write-down is the best way to resolve a dispute.

Categorized in: ,

Audience type: Associates, Small Law Firms, Sole Practitioners