Tiplet: Bank Holds on IOLTA Deposits

Most lawyers are aware that funds held in trust cannot be disbursed until they are fully cleared. Deposits submitted electronically or by wire speed up the process, as does cash. Credit card payments are generally settled and in your account within one to three business days. Checks are usually the slowest to process and are not “cleared” until they are collected and paid by the issuing bank, even if the lawyer’s bank has a policy of making funds available in a shorter period of time. See Sylvia Stevens, Waiting for ‘Go’ Dough: A primer on disbursing client funds, OSB Bulletin 21 (June 2006).

The Professional Liability Fund recommends:

For an ordinary transaction with an established client or known third party, wait three banking days for locally written checks, five banking days for checks written within Oregon, but outside your local area, and ten or more banking days for out-of-state checks. Note, that checks for
$5,000 and over may be held by banks for seven banking days, whether drawn on a local, instate, or out-of-state bank, therefore allow sufficient time for these checks.

To avoid the growing problem of check scams, wait at least ten banking days before disbursing funds in the following circumstances: (1) the transaction is with a new client or a client you are unsure about; (2) the check is very large; (especially compared with the extent of legal services
provided, if the check is a retainer); (3) the check is from an unknown third party; or (4) any aspect of the transaction raises (or should raise) your suspicions. Remember that drafts or other instruments may take longer than ten days to process. To verify that funds have been collected, ask your bank to contact the issuing bank.

Source: “Frequently Asked Trust Account Questions.” From the PLF website, select Practice Management > Forms > Trust Accounting.

How to shorten bank holds

When are holds applied?

Holds may be applied by your local branch at the time of deposit or overnight during processing. Since checks over $5,000 are the most likely to present problems, review your accounts carefully. If in doubt, contact your bank.

 

All Rights Reserved 2019 Beverly Michaelis

 

Last Call for Getting Paid – October 2 CLE Event

Don’t miss out on the chance to attend “Getting Paid” on Wednesday, October 2, 2019.  Learn how to talk to clients about money, incentivize clients to pay, collect accounts receivable, and modernize billing and payment practices. Designed for lawyers, legal staff, and office administrators – anyone interested in improving billing and collection practices.

When and Where

Wednesday, October 2, 2019 from 10:00 a.m. to 11:15 a.m. Pacific Time. This is a live, online webinar.

How to Register

Click herechoose the image above, or visit the Upcoming CLE page. Secure payment processing powered by Eventbrite. Visa, MasterCard, Discover, and American Express accepted. Program materials included in the $25 registration price. Group discounts available to firms who wish to register 5 or more attendees. Contact me for more information.

Topics include

  • Identifying your fee strategy
  • Ensuring the client is invested in the case
  • Documenting and reinforcing fee discussions
  • Exploring the advantages of automated billing systems
  • Using billing descriptions clients understand
  • Making it easy for clients to pay
  • Sourcing the latest options in credit card processing and click-to-pay invoicing
  • Unbundling services to meet marketplace demands
  • Offering hybrid fee agreements
  • Getting practical about collection

Can’t Attend?

Video and audio recordings will be available to download along with the program materials shortly after the live program event.  Price: $25. Contact me or visit my online CLE store to place an order.

Don’t Miss Out!

All Rights Reserved 2019 Beverly Michaelis

 

Client Bills Should Tell a Story

Once upon a time my lawyer sent me a billing statement I didn’t understand. The only part that wasn’t vague was the amount I owed.

If this is how clients feel about your bill, you’ve got a problem.

Billing statements should be complete, detailed, and accurate. Here are some dos and don’ts to consider:

Billing dos

  • Make the math easy to follow. If you offer early payment discounts, calculate the discount for the client. If the client is required to replenish a retainer account, show how you arrived at the replenishment number.
  • Be clear about due dates and the applicability of late charges or interest.
  • Spend client money carefully. As one writer put it, why are you FedExing correspondence to your expert when trial is six months away? The same can be said of failing to delegate work when it could have been performed just as competently for less money.
  • Put your billing practices into an easy-to-read client pamphlet. It can be on your website, in a brochure, or on a one-page sheet included with your fee agreement.
  • Proofread your bills. Mistakes drive clients crazy and cause them to question your invoice and the quality of your legal work.
  • Follow the additional tips below.

Billing don’ts

  • Don’t bill the client for anything that isn’t included in your (written) fee agreement.
  • Don’t pad your bill.
  • Don’t nickel and dime clients by billing for everyday scanning, copying, faxing, or postage. Allow for reimbursement of extraordinary expenditures by including an exception in your fee agreement, then bill accordingly.
  • Don’t raise client hackles by charging for clerical work.

What to include in your billing descriptions

  • For each billing activity include the person doing the work, the applicable rate, and the date of the activity.
  • Spell out acronyms and abbreviations like UTCR or ORCP.
  • Make your bill easier to read by ditching as much of the legalese as possible.
  • Use dynamic, results-oriented verbs to describe your work: attend, investigate, evaluate, assess, formulate. A thesaurus is your best friend.
  • Write in the present tense.
  • Always include the who, what and why:

Who

To whom did you write the email or make the call? Describe the role of the person involved – clerk of the court, opposing counsel – and include the name if it is meaningful to the client. 

What

“Review documents” is vague. Give detail! What exactly did you review? Discovery produced by the other side in response to a request for production? Say so.

Why

Explain why you took the time to perform the task. Is the trial date around the corner? Are you reviewing documents to respond to a discovery request? Give the specific reason for organizing, reviewing or preparing. This is your opportunity to tell the client that you did something worth “x” dollars and expect to be paid.

Learn more

Learn more about billing practices, collections, and how to talk to clients about money at “Getting Paid,” an online CLE event scheduled for Wednesday, October 2, 2019 from 10:00 a.m. to 11:15 a.m. 1.25 OSB MCLE Practical Skills credits approved. Designed for lawyers, legal staff, and office administrators – anyone interested in  improving billing and collection practices. Details available hereRegistration open now!

All Rights Reserved 2019 Beverly Michaelis