On December 16, 2020 the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 495. Here is the synopsis:
Lawyers may remotely practice the law of the jurisdictions in which they are licensed while physically present in a jurisdiction in which they are not admitted if the local jurisdiction has not determined that the conduct is the unlicensed or unauthorized practice of law and if they do not hold themselves out as being licensed to practice in the local jurisdiction, do not advertise or otherwise hold out as having an office in the local jurisdiction, and do not provide or offer to provide legal services in the local jurisdiction. This practice may include the law of their licensing jurisdiction or other law as permitted by ABA Model Rule 5.5(c) or (d), including, for instance, temporary practice involving other states’ or federal laws. Having local contact information on websites, letterhead, business cards, advertising, or the like would improperly establish a local office or local presence under the ABA Model Rules.
The opinion does not address confidentiality, use of technology, or other issues that may arise in remote working situations. Read the full opinion here.
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With law firm revenues taking a hit from COVID-19, effective billing and collection procedures have never been more important. Follow the best practices outlined below to minimize hiccups.
Review pre-bills carefully. Misspelled names and billing errors are irksome to clients.
Correct any mistakes that slip by quickly and accurately – the first time.
Issue statements before clients receive their paychecks – before the 15th and again at month end. If you serve corporate clients, send bills in a manner and format that works for the accounts payable department. When cash flow is challenging – for you or your client – weekly billing may be an option.
Always include a due date on statements. Most clients prioritize payment based on due date.
Offer incentives. In lieu of late fees or interest, offer clients a discount if payment is received within 10 days of the billing date.
Stick to your agreed upon billing interval. Monthly, quarterly, weekly – whatever it may be. Inconsistent billings disrupt firm cash flow, infuriate clients, and make collection more difficult.
Be flexible in how you accept payment – Venmo, Zelle, PayPal, ApplePay, credit card. Absorbing processing fees may not be fun but it’s better than not getting paid.
Head off problems
Always take the time to discuss fees, costs, and billing procedures. Most nonpaying clients who file retaliation suits or malpractice counterclaims do so because they never understood what the lawyer’s services would cost.
Never leave home without a written fee agreement. Be specific and complete. Your agreement should: (a) specify the scope and timing of services; (b) describe what the client is expected to pay for and when; (c) explain billing practices; (d) identify what will occur if payment is not timely made. Losing a potential client who refuses to negotiate and agree to a comprehensive fee and engagement agreement is a small price to pay compared to defending yourself in a malpractice claim or disciplinary proceeding.
Consider alternative fee arrangements – flat fees, fixed fees, unbundled fees, evergreen retainers, or “last month’s rent.” Clients cooperate more fully when they are financially invested in their case. If the client is unwilling to commit financially, the matter quickly becomes your problem rather than the client’s.
Don’t allow outstanding fees to accumulate during the course of representation. As soon as a payment is missed, call the client. Get to the root of the nonpayment. Is the client dissatisfied? If a client becomes seriously delinquent, terminate the attorney-client relationship and withdraw from representation if possible.
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