[WSBAPT] when you don't get paid

[Stephen Brandli]

Practicing in a small, rural county, we are constantly making choices about advance fee deposits and collections.  These choices are hard.  I too want people to be able to afford representation, but of course I run a business.  Over time, we have developed policies to make it easier for us to make these choices.  However, our policies are still not tight enough, and we still constantly make individualized choices.  In my career, I have sued for nonpayment only twice: one particularly egregious case and in one case where the client was going to get money paid out of the divorce and I wanted the judgment to attach to the residence.

I can only offer the following:


  1.  The fee agreement should provide for collection costs including attorney fees.  It should also provide for interest on unpaid invoices.  Ours is 12% or the maximum provided by law, whichever is less.  I have never farmed out collection, but I want the option to do so.
  2.  We expressly waive interest in two situations:  (1) Before the end of the case when we expect the client to get money at the end of the case to pay us; (2) After the end of the case when the former client enters into a payment plan with us, in which case the waiver is conditioned on successfully completing the parenting plan.
  3.  If possible, find a staff member who is good at collections.  It requires a certain fortitude, a friendly demeanor, and persistence.  I am lucky that my wife fills that role and is good at it.  But she sometimes works very hard at collections.
  4.  Don’t take cases in which you have a low expectation of being paid unless you are okay with that.  If you are okay with that, I suggest offering a low-bono rate and enforcing it (unless circumstances change that cause you to wish to help out even more).  We have a fairly strict policy on low-bono cases and don’t take cases that do not meet our criteria and for which we are unlikely to be paid.
  5.  Sue only in the egregious cases, i.e. someone is truly stiffing you.
  6.  When you’re doing your business budgeting, expect a certain amount of uncollectible debt.  In our case, this uncollectible debt comes in cases in which circumstances change such that the client cannot pay when we thought they could.  Just part of the cost of doing business and also the cost of meeting our ethical principles.

I hear a lot of advice to avoid suits due to potential bar complaints.  If someone is unsatisfied with your work, you should resolve the issue or cut the client loose quickly.  Those circumstances may suggest writing off whatever is owed.  But I am not afraid to sue in egregious cases even if that is going to attract a bar complaint.

                Steve

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Diane J. Kiepe
Sent: Tuesday, September 21, 2021 9:17 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] when you don't get paid

Hello all,

I have been struggling with the issue of not getting paid and just writing things off.  I am often willing to advance my time and I know, I know, I have no one to blame but myself.  I currently have about 4 people who owe relatively small amounts but one case that I think will owe me close to 10K when all is said and done.  I am not sure I can continue to represent the party and cannot afford to write this amount off.  It was in the context of a probate but my engagement letter clearly states the PR is responsible for the fees.  The PR is expected to inherit dirt worth substantially more than the amount owed to me but not through the probate but from the same decedent.

I’m just curious if any of you have any thoughts to share for me.  In my 17 years I have had very few no-pays but as my practice grows this problem seems to grow.  I hate to insist on a retainer because I completely understand that some families are relying on the probate/trust assets to pay.  I am really just struggling and appreciate any thoughts or directions.

Sincerely, Eeyore, I mean Diane. 😉

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

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