From our friends at NW Sidebar:
Attorney Ally Kennedy Garcia offers her tips for gaining a foothold for success in a law firm.
Fortunately my “helper” is a little more benign:
How many times have you heard, “If you want to avoid collection problems, get your fee up front?” Good advice, but how exactly do you make it happen? Here are four sure-fire techniques:
Use Evergreen Retainers
In this type of arrangement, the client agrees to maintain a specified retainer balance at all times. Your bill should reflect the initial retainer deposit, fees and costs incurred during the month, total funds disbursed from the client’s retainer, any balance remaining, and the amount needed to replenish the retainer.
Keep a careful eye on the client’s balance at all times. If the client fails to replenish the retainer as required, be prepared to enforce the terms of your agreement (including withdrawal).
Discounts can be a great motivator for clients to give you a retainer, pay your fee up front, or promptly take care of an outstanding balance. Here are some examples:
Tinker with the math to make discounts work for you.
Practice Tip: If you intend to charge a “fixed fee earned upon receipt” read and understand Oregon Rules of Professional Conduct 1.5 and 1.15-1 and OSB Formal Opinion 2005-151. These arrangements must be in writing and must contain specified disclosures.
Collect Last Month’s Rent
Inspired by a common practice in landlord-tenant agreements, the “last month’s rent” approach requires the client to pay a security deposit into the lawyer trust account. Each month the client is invoiced and expected to pay. At the conclusion of the matter, the security deposit is used to pay the client’s final bill. Alternatively, the deposit can also be used if the client fails to pay a monthly invoice.
As with all fee agreements, put your “last month’s rent” arrangement in writing. Keep in mind that if the client’s funds can earn net interest, you are required to establish a separate interest-bearing account for the client or obtain a waiver of the client’s right to interest. See OSB Formal Opinion 2005-117 for additional details.
Avoid bookkeeping hassles by using a private credit card processor who will take merchant fees only from your business account, not your lawyer trust account. Be sure to read and comply with OSB Formal Opinion 2005-172. Credit cards are a great way to collect retainers when clients can’t otherwise come up with the funds.
[All Rights Reserved 2016 Beverly Michaelis]
February 2016 is finance month at Oregon Law Practice Management. We are going to revisit and update some “oldie but goodie” posts on law firm finances:
We start off tomorrow with Four Sure-Fire Ways to Get Paid in 2016.
See you on February 1!
[All Rights Reserved 2016 Beverly Michaelis]
In October 2015, the North Carolina Bar Association concluded that lawyers who have taken reasonable security measures to safeguard their computer network aren’t ethically obligated to replace client funds if hackers steal client money. A summary of the opinion appears in Bloomberg. A subsequent story in the ABA Journal described it this way:
While you may not be ethically bound to replace client funds, you may be liable for losses suffered by your clients. Furthermore, any time there is a theft of client property, you are obligated to inform the client and may be additionally responsible for helping to mitigate the damages [such as covering the cost of credit monitoring if identity theft is involved].
All the above serves as a good reminder to remain vigilant. For posts on scams, fraud, embezzlement, theft, and related issues, search my blog.
Beverly Michaelis – all rights reserved – 2016.
On January 12, 2016 we offered a free Webinar with Lexicata – the all-in-one client relationship management and client intake solution exclusively for lawyers.
No worries! We recorded it. It will be available in the next few weeks on the Past CLE page of our Website, free of charge.
We are pleased to make this CLE available to all Oregon lawyers, as Lexicata is really the only product on the market that can offer true client intake online – a feature many lawyers want to incorporate into their practice, but find cost-prohibitive to develop on their own.
Another good post from NW Sidebar:
If anyone at your firm is routinely inputting lots of information, you might want to explore whether you could automate that system. Tacoma immigration attorney Greg McLawsen explains how it’s done.
The New Year is an opportunity to do things differently. Why not resolve to improve client management?
The first lesson in managing client expectations is that some folks should never become your clients. Become a “red flag” spotter. Screen potential new clients with these questions in mind:
The second lesson in managing client expectations is to think about your practice from the client’s point of view. Perfectly good clients with decent cases can turn into clients from hell if they feel their expectations aren’t being met. Avoid this trap:
All Rights Reserved  Beverly Michaelis
If your goals for the new year include any of the following:
If you’re an Oregon lawyer, you have a great resource right in your own backyard: the Oregon Attorney Assistance Program. The OAAP can give you guidance on how to develop your own stress management program using deep relaxation, meditation, time management, and other proven stress-reducing techniques. Best of all, OAAP services are free and confidential.
We’re here to help! Professional Liability Fund Practice Management Advisors provide free and confidential assistance with office systems. If you’re a lawyer in Oregon, give us a call! 800-452-1639 Toll-Free in Oregon or 503-639-6911.
Stay tuned next week for a new post: Turn Over a New Leaf Through Better Client Management.
All Rights Reserved – Beverly Michaelis 
What are your New Year’s resolutions?
You don’t really have to choose, because in 2016 you’ll see posts on all these topics and more!
We begin the year with a Fresh Start. If you’ve ever felt disorganized or overwhelmed, this post is for you. No habit or office system is written in stone. You can make adjustments, update your practices, or create new procedures. For a kickstart, visit this blog tomorrow.
Recommitting to marketing and client retention begins with understanding how to control and relate to clients. Watch for Turn Over a New Leaf with Better Client Management on January 11.
Collecting fees is a battle every lawyer fights. In 2016 we’ll revisit fees and fee collection with a look-back to these classics, updated for the new year:
Speaking of money, be sure to stay tuned on January 25th for Do Lawyers Have an Ethical Duty to Replace Hacked Funds? Cyber crime is an ever-growing problem. If you’re hacked and trust funds are taken, are you automatically obliged to make your clients whole?
On January 19, we’ll revisit lessons learned at the PLF’s Seamless Client Intake Webinar featuring Lexicata. If you resolved to embrace the cloud or upgrade your tech for 2016, attending this FREE program is a good start. Registration is closing soon, so if you haven’t signed up yet do so before January 6. Visit the PLF Website and select CLE > Upcoming CLE.
All Rights Reserved – Beverly Michaelis