LNCtips.com: Deadbeat Clients
If you're just starting as a new legal nurse consultant, you probably want a client...any client. Most of your clients will be professionals and nice people as well. But you need to know that not all clients are good clients. In fact, there are so many types of bad clients that there are websites, such as Clients from Hell, devoted to the woes of working with them. Some of the worst types of clients can hurt your wallet. Every field has its deadbeats and the field of law is no exception. Here are some bad paying clients to avoid or drop as soon as you recognize a problem.
* The Empty Promisors. These aren't your normal hagglers who want a better price. These attorneys try to manipulate your fee with the promise that they will give you lots of cases...but only if you give them a deep discount. They may even ask you to work for free. And because you're desperate to get some experience, you might think this is a good deal. But this type of arrangement is never good for you as a legal nurse consultant. Chances are you'll never see another case from these attorneys. Some don't really have any other cases to give you. Some will give their next case to another LNC willing to work for free or deep discounts. The solution? Never discount below the price you need to make a fair profit. (See Fee Schedule for more information about fees.) Don't analyze cases for free, unless you're volunteering for an organization like Legal Aid.
* The Abusive Attorney. This is the guy (it's usually a male) who gets indignant, screams, and calls you names when you ask for the money that he agreed to pay you for work that you have done to his satisfaction. Abusive Attorneys use this tactic because it works, particularly on women. The solution? Recognize that being abusive is this guy's M.O. for getting out of paying bills. Try to deal with someone else in the firm instead of the attorney. Be persistent and document every interaction you have with the firm. Do internet research on the firm to see if others have had similar problems. Take the firm to small claims court if you have to. And don't work with the attorney again. You can do better.
* The Pokey Payer. As the name implies, these attorneys either take their time to pay you or don't pay you at all. Unlike the Abusive Attorney, these attorneys are polite but never seem to come up with money to pay you. Before you try any solutions, you need to know that Defense law firms are slower to pay than Plaintiff firms are. Defense attorneys have to submit your invoice to the insurance company that pays them. There can be a lag of months before the insurance company acts on your invoice. But let's say that you're just dealing with a Pokey Payer who doesn't have a reasonable explanation for delaying payment of your invoice. Here are some possible solutions to get your payment.
Pokey Payers sometimes have cash flow problems. If your clients pay by credit card, you get your money right away yet it allows your clients a little extra time to make their payments. PayPal is an easy and cost-effective way for you to accept credit cards. You don't even need a website if you use PayPal's virtual terminal.
If you don't receive payment for your invoice, call your client's law firm and ask for Accounts Payable. If there isn't an Accounts Payable department, ask for the person who pays the bills. Be friendly and ask if the firm has received your invoice.
If they tell you they haven't received your invoice, fax it to them, and call back after you have confirmation that they've received the invoice. (Or you can email it but you won't have any written confirmation that the email was received.)
If the firm tells you it has received your invoice, ask when you can expect to be paid.
If the firm tells you that it has mailed your check, ask for the check number for your records. This gets the firm to commit to write and mail a check if it hasn't done so yet.
If the firm still doesn't pay, recognize that you probably won't work with this client again. To try to obtain payment, mail the client reminders that get less and less friendly. To see an example of an effective collection letter, click here.
If the firm asks you to do more work, explain that you would love to work with it but can't accept new projects because it hasn't paid you for the last project.
If the client is local, go to the law firm and talk to whomever pays the bills. Keep it friendly but ask for the reason for non-payment of your invoice. If you have to, arrange for a payment schedule, but try not to leave without some money in hand and a commitment to a date to pay the invoice.
Your last option is to turn the bill over to a collections company or take the client to small claims court. This will be a hassle for you, a fact that the firm may be counting on.
You'll notice that many of the solutions above remove the attorney from the equation. Most attorneys, even in tiny law firms, don't write the checks. In most situations, it's better to pester a clerk than your client, the attorney. And to prevent problems in the first place, you and your client should both sign a letter of understanding that outlines your billing practices and penalties for untimely payment. With these practices in place, you just might never work with a deadbeat client.