Issue link: https://epubs.iltanet.org/i/30285
“Be very clear as to the expectations of when payment is due” might get stuck in the end. To set a retainer, review similar projects you’ve done in the past and price it accordingly. If this is a unique project, do your best to estimate the amount of time it will take and the value of the outcome. In either case, leave some room for something unexpected to arise. There are different ways a retainer can be structured, but a favorite one is to have the retainer apply to the last bill, not the first. The client will pay all bills currently and only at the end of the engagement is the retainer applied to fees or returned to the client. Executed engagement letters are another way to reduce risk. In the letter, you should not only spell out the scope of the project, but be very clear as to the expectations of when payment is due. Most attorneys don’t like to talk about this part of the agreement, but it helps if you’re forced to get tough on collections. It also helps if you do decide to sue the client for non-payment. 8 Financial Management ILTA White Paper Keep communications open with the client during the project. If unexpected issues crop up, address them immediately, particularly if they can affect the cost to the client. No one likes surprises, and a bill that is substantially higher than expected is less likely to get paid. NO PAYMENT…NOW WHAT? All of these suggestions can help reduce the risk of not collecting from your client. But sometimes, you do all the right things and the bill still doesn’t get paid. There can be a variety of reasons, but no matter what the reason, the reality remains: the bill is unpaid. Here is where persistence can pay off and where most law firm policies start. Most firms require bills to be paid within 30 days. Make sure you send a statement to the client at that time. Don’t let it wait. The letter should make it clear