If you can bring yourself to accept the fact that every time a client stiffs you on a bill, it's YOUR fault not theirs, you will be a much wealthier, healthier and happier lawyer as a result!
One of my favorite long-term Rainmaking clients is one of my role models and taught me this unique brand of healthy and profitable thinking. He also happens to gross $80,000 per month in his small practice and came to me last week to figure out how to cut his schedule down from 20 to only 10 hours in the office. So this may be some advice that's worth thinking about. I know it's helped me alot.
Anyway, there seems to be alot of good advice floating around on the subject of how to protect oneself from getting stiffed on a bill (get an evergreen retainer, create narrative bills that communicate value not just effort, bill regularly, review a/r each month, avoid discussing the "range" of costs in the beginning, etc.) So instead of repeating the most common and obvious of that advice I'll just say this. . .It's been the overwhelming experience of my Rainmaking clients in their many varieties of litigation practices and in my own work, that the amount of the up front retainer is a red herring.
Showing clients the various steps involved in a case has proven very effective for many of my clients who do litigation or any kinds of multi-step transactional work and is also a critical exercise to get control of your own cash flow and investment in a case. This exercise, along with having an evergreen clause in your fee agreement and implementing it, is a great idea that has also saved my clients alot of money & aggravation.
At the end of the day though, most collection problem begin long before they hit your a/r report with your client intake procedure. The good news is that bad accounts are easy to spot and potentially good clients can be turned into great clients with the same exact client intake procedure so you can have a more enjoyable and more profitable small law firm.
It's not directly on-point, but an article I wrote about flat fees and billing issues in general, I think has alot of application to the present discussion. Click here to see that article. Please note though, the offer you'll see at the bottom for the first 12 e-zine subscribers has already filled-up, sorry :-(
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