We’ve all been there.  Non-paying clients can be incredibly frustrating, especially if you went out of your way to offer a reduced rate or special payment plan.  But before you resort to punitive measures, take a moment to think it through.

• A literal doubling of your fee is likely to be challenged as excessive.  Review Oregon RPC 1.5.
• Consider whether the proposed punitive action will make a difference.  Do you truly believe that doubling your fee will motivate the client to pay?
• Collections can be a landmine of legal traps and pitfalls.

What Should You Do If the Client Doesn’t Pay?

In the case of non-paying clients, it may be appropriate and necessary to withdraw. If so, take care to abide by your ethical responsibilities.  If you represent the client before a tribunal and must file a formal Motion to Withdraw, read and understand Oregon Formal Opinion No. 2011-185 – Withdrawal from Litigation: Client Confidences.  If you have any doubt about what you can or cannot tell the court, seek advice from the Oregon State Bar General Counsel’s office or contact a lawyer colleague who specializes in ethics defense.

You should also consider ordering one (or more) of the free CLEs offered by the PLF on managing law firm finances:

• 50 Shades of Green: Building a Profitable Solo or Small Firm Practice
• Building and Maintaining a Profitable and Efficient Law Practice 
• Increasing Revenue: Updated Strategies for Attracting New Clients and More Effectively Managing an Existing Client Base 
• Money Matters 

These CLEs will help you to:

• Banish personal habits that cause you to under earn
• Identify profitable practice areas
• Analyze overhead, liquidity ratios, budget, turnover, and realization rates
• Establish effective billing practices
• Reduce accounts receivable
• Develop case and client selection skills to eliminate payment problems

Visit the PLF Website for details.  Select CLE > Past CLE.

[All Rights Reserved 2016 Beverly Michaelis]