Getting Paid Commandment #5

Yesterday, with commandment #4, we discussed the importance of always having money in trust.

Today, we’ll talk about how to ensure that money stays in trust.

(Note: if you missed commandments 1–3, read here, here, and here.)

Today’s commandment takes discipline, consistency, and commitment, and it may seem scary at first, but it is vital to helping you get paid 100% for the work you do as an attorney.

Commandment #5: If your client doesn’t pay or have money in trust, stop work. Stop now. Stop right now.

That’s right; stop work on the case and do it now.

This sounds so harsh; why would you do that?

Because your client hasn’t paid you, that’s why.

Like we established yesterday, if your client has a negative balance with you, bad things happen all the way around.

Your relationship with your client sours, trust is broken, tensions are strained, attorney–client communication decreases, and your client tends to get worse results.

Don’t let this happen.

Getting paid is ultimately about serving your client to the best of your ability, and you don’t do that when your client doesn’t pay and owes you thousands of dollars.

So, again, if your client doesn’t pay or doesn’t have money in trust, stop work.

What do you do after you stop work?

You have a conversation with your client saying you had to stop work, and X is the amount that has to be paid to get working again.

This can happen over email or phone, but it needs to happen immediately. Don’t delay this conversation. Be honest with your client so you can start serving them again.

You need to have a system in place to keep track of retainer amounts so you can react quickly when a retainer is not where it should be.

This system should have one person responsible for billing, collecting, and maintaining payments and retainers.

That person should not be you or any other attorney. If you put an attorney in charge of billing and collecting, the system will breakdown almost immediately. Attorneys are too busy and disinterested to focus on collecting.

Hire someone to run this system, or at least have someone in your office whose primary job it is to bill and collect.

This is so important because the collection person will be the biggest ROI employee you’ll ever have. He or she is the lynchpin to you getting paid 100% for the work you do.

Couple other things, your system needs (1) clear timelines for payment, and (2) a clear trigger for stopping work.

Your system may look like this:

1. You send out bills on the 1^st of every month.
2. Bills are paid with retainer funds on the 1^st, immediately after bills are sent out.
3. Retainers are replenished on the 15^th of every month by means of client credit cards, which are on file (a credit card authorization that allows you to replenish retainers is a must in a system like this).
4. If a credit card declines and a retainer is not replenished in full, all work stops and your collections person immediately sends out an email to the client informing him of what’s going on and asking him to pay in full so work can start again.

This is just a suggestion, but you get the idea how the system would work. There are clear and consistent dates on which things happen, clear and consistent triggers for stopping work, and clear and consistent communication with clients about the state of their case and their retainers.

This level of clarity and consistency is what’s necessary to get paid 100% for the work you do.

(Note: while reading this, some of you have undoubtedly said something like, “I can’t stop work on my cases. That would violate rule X of my state’s rules of professional conduct.”

I would never tell you to violate any rule of professional conduct. However, in my experience as a divorce attorney, and having talked with many attorneys in all fields, there are very few times in which stopping work until you’re paid would prejudice a client in any way.

Clients in a system like the one laid out above usually replenish their retainer in full within 1–3 days, so there’s almost never significant downtime on the case.

One last thing, if after reading this, you think, “This just won’t work for my firm; I can’t do it; I’ll get disbarred,” then you’re catastrophizing and you’ll never get paid anywhere close to 100% for the work you do. That is unless you change your mindset to, “How can I make this work so I can paid 100% and my clients gets the exceptional service they deserve?”

I guarantee you can get paid and provide exceptional service within the parameters of your ethics rules. Don’t say you can’t; say you can and figure out how.)