Loss Prevention Tip #25

Loss Prevention Tip #25

Suing a client to collect an unpaid account almost guarantees you will face a counter-suit alleging negligence. In most cases that allegation of negligence will be completely unfounded, but it still will trigger a duty to report a claim to the Lawyers’ Insurance Programme.

Here are some suggestions to avoid suing for unpaid fees:

  • Screen potential clients wisely. Make sure they can afford your services.
  • Be clear about fees and costs at the outset.
  • Use written engagement letters to avoid misunderstandings and tell the client what will happen if fees aren’t paid.
  • Implement a billing cycle and stick to it. Deal with delinquent accounts consistently and quickly.
  • Send clients copies of letters, pleadings and significant documents so they see what you are doing.
  • Weigh the risks and benefits of suing. Consider how much time a lawsuit will take, the odds of success and whether your time might not be better spent working with good clients on good cases.
  • Remember that communication is key. Keeping a client informed about the current status of their case will allow the client to understand the work that was performed and why the work was necessary. An informed and happy client is more likely to pay their invoice.