publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/395170
• For risk mitigation purposes, check your client against the Office of Foreign Assets Control (OFAC) list and the United Nations sanctions lists. Anyone on these lists not only exposes your firm to sanctions, and they might not pay the bill (i.e., normally they are unable to transfer funds into the country). • Do a thorough credit check. Will your client be able to pay? Does the client have cash flow issues or creditors knocking at the door? Has the client walked away from other firms leaving unpaid bills behind? This might not be the client for you. • Exercise caution if the client wants to pay the initial retainer with a credit card. This should tell you there might not be funds for paying future bills. • Check whether the client has a history with your firm. Have you written off balances for this client in the past? Previous balances that have been written off could be an indication the client might not pay this time. • Make sure you get a signed engagement letter. The lack of a signed letter could severely hinder collection efforts. If you're willing to take on any of the risks above, get an appropriate retainer up front. OBTAIN OUTSIDE COUNSEL GUIDELINES Before work commences, make sure you obtain a copy of your client's outside counsel guidelines. These documents spell out the particulars of what the client will and will not pay for. Many collections are held up while bills are reversed and adjusted for items not adhering to such guidelines. Here are some additional things to keep in mind related to outside counsel guidelines: • When outside counsel guidelines are received, make sure all attorneys working with the client are made aware of them. For example, if a client won't pay for travel time, research or two attorneys at a deposition, don't charge for them. It can delay payment and embarrass the firm if charges made were specifically excluded in the guidelines. • If a client requires task codes, be sure to include them in your time entries. Missing task codes on a bill that requires them will cause your invoice to be rejected immediately. • Get your overrides in place. Often clients spell out specific rates for attorneys. Make sure these rates are in your system from the beginning. Limits on amounts charged for specific costs should also be in place. It's not uncommon for bills to be redone because the wrong amount was charged for photocopies or attorneys were billed at the wrong rate. • E-billing readers are becoming more sophisticated. Make sure your readers do not pick key words out of a narrative that could cause a bill to be rejected. KEEP CLOSE TO YOUR CLIENTS Throughout the year, you'll want to keep close tabs on your clients. • Know your client's business. Know what their risks are and when they are facing issues. • Keep communication open at all times. • If you've agreed to a budget, stick to it. With open communication, your client should understand unforeseen situations that cause you to exceed the agreed-upon estimate. Without this communication, the overage will come with some sticker shock that will likely delay payment or result in a write-down. • Make sure each party has a billing contact. The client's in-house counsel is most likely not the person who can follow up with unpaid invoices. Likewise, the law firm attorney is most likely not the person who can supply copies of past-due bills. If you give your client a billing contact, billing issues can be dealt with in a timely fashion. • Keep up with the portfolio during the whole year. Following up on a slipped invoice in a timely ILTA WHITE PAPER: OCTOBER 2014 WWW.ILTANET.ORG 42 YEAR-END COLLECTIONS START JANUARY 1