Past due blues

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By Laurie Landsittel
Dolan Media Newswires

If collecting your legal fees makes you feel “embarrassed,” “uncomfortable” or “greedy” you are not alone.

According to a recent LexisNexis survey, 73 percent of small law firms sometimes have past due client accounts and more than half of the attorneys and legal professionals surveyed reported that between 10 percent and 39 percent of their client accounts are typically past due. The survey included 309 attorneys or legal professionals from 47 states and 16 practice areas.

Respondents said they enjoy practicing law, but dislike taking money even when they earned it. One attorney, whose staff handles the money, even reported that it is “distasteful” for an attorney to collect fees from the client.

Client financial hardships are cited by 83 percent of those surveyed as a reason for the delinquent accounts. Other reasons attorneys allow invoices to go unpaid include client communication, value appraisal and a lack of law firm business process.

According to Steve Fetters, senior product manager at LexisNexis, the survey focused on small law firms, because most of LexisNexis’ billing and invoice products are targeted at small firms. Also, said Fetters, “in the smaller firms lawyers are more hands-on compared to larger firms where the staff might be doing the billing and invoicing.”

The survey results also indicated that 71 percent of the responding law firms provide discounts or write off legal work even before invoicing clients, but this practice does not lower the risk of accounts becoming past due. In fact, according to the survey, the opposite is true. Firms that write off legal work or provide discounts have a substantially higher percentage of past due accounts.

Many attorneys and legal professionals surveyed claimed the reason that they provide discounts to clients is to build relationships, but as Fetters pointed out, a client that requires a discount on fees may not be a client with whom you want to build a relationship.