October 2003

1. How to bill for completed work
2. Attorneys using credit cards to speed collection efforts

Articles

1. How to bill for completed work

   A new lawyer recently asked for billing assistance. Here is a portion of my response ....

   First, talk with other attorneys in your geographic area about their charges for services similar to what you will provide. Get a feel for the marketplace in which you operate.

   Then, determine which of your services will by hourly charges, which will be flat fees and which, if any, will be contingency.

   Next, prepare an engagement agreement to be signed by both you and your client ... Be sure to include your fee structure and have your client specifically initial that section.

   When you send out your first billing statement to your client, also include a customer survey ... Find out things like i) whether the client was treated well by your staff; ii) whether your client understood the engagement agreement; iii) what the client specifically liked about his/her interaction with you and your staff; and iv) whether there was anything the client didn't understand or didn't like or would have liked better if done differently ....etc.

   Make the survey short and include a SASE .. This will go a long way to make your client feel cared for ...

   Learn more about the billing and collection process from my book, Collecting Your Fee: Getting Paid from Intake to Invoice, published by the ABA (March 2003). Click here to order this book.

2. Attorneys using credit cards to speed collection efforts

   Do you allow your clients to use credit cards to pay your legal fees/costs? Some lawyers feel merchant cards for payment of legal fees is "tacky".

   My question: Why would use of a credit card option for clients be tacky to you? Why is it tacky to get paid?

   Seems to me that merchant (credit/debit) cards are part of the American culture today. Offering this option is not commanding it and, therefore, seems to me not to be "tacky" or unprofessional. Those who want to get the frequent flyer miles will do so; those who might not be able to afford you (in their minds) with a check may engage you; those who would rather owe the impersonal bank rather than the lawyer who is responsible for resolving their very important present conflict/challenge/need will pay you with a credit card option if offered. To these folks, the credit/debit card is a wonderful option; to others who would not use the card, it's irrelevant and won't impinge on your relationship. Thus, to the client, it's not tacky ... And thus, why would it be tacky to you to get paid?

   A word of caution: Merchant card companies, despite some verbiage to the contrary, will ultimately charge your account for the amount paid if/when a client disputes the amount paid...UNLESS you have an engagement agreement that says something like any and all disputes with your billing must be noted by the client within 10 days of the date of the billing statement or the billing is deemed to be valid and non-refundable. Further, beyond this date (dispute period), client agrees not to dispute any merchant account charge created by the client in accord with this authorization and used to pay the attorney's fees/costs billed.

   With this type of language (you may want to contact your merchant bank to create the specific language they prefer), the merchant bank will support you even after a dispute is raised by the client. Without the agreement of the client, in advance, the amount charged will always (at least for six months following the payment) be subject to challenge and credit against your merchant account.

   My comments in this note relate to the payment of billed attorney's fees, not to accepting an advance retainer that must be deposited into the clients' trust account. If the funds go into the clients' trust account, be sure that you pay the credit card service fee, leaving the entire principal amount for the benefit of the client, to be used later in accordance with the parties' understanding and agreement. While it is "legal," I don't think I would use a credit card for anything that is to be deposited into the client's trust account ...

   For more ideas about getting your legal fee paid, see my latest book, Collecting Your Fee: Getting Paid from Intake to Invoice.