It didn’t occur to me, but my attorney took a small chance with me. We sold our house in Japan and the final arrangements happened after we had moved to Taiwan. In the US it wouldn’t have required an attorney, but for various reasons, we needed her to sign the papers and do a number of things.
We were out of country, and it would have been a pain for her to attempted to collect, but that small amount of money wasn’t worth being dishonest. (I haven’t been tested yet with large amounts, so I don’t know my limits of honesty yet.)
ISTR that in at least one case the lawyer defending Donald Trump against a contractor suing him for non-payment himself got stiffed by Donald Trump. No one to blame but himself on that one.
A lawyer told me something that seemed a bit counter-intuitive at the time. Lawyers don’t like to sue, they know that a trial is risky and generally prefer to settle. People generally don’t end up owing lawyers millions of dollars, it’s hundreds or thousands and the costs of lawsuit even if it’s their own time usually isn’t worth it. So lawyers do what everyone else does, eat the loss unless the payout outweighs the risk.
That should make for an interesting consultation: “Hey, are you a good enough lawyer to figure out a way for me to weasel out of paying this other lawyer I hired…?”
(Then again, Donald Trump still finds suckers to work for him, so I suppose it’s not impossible.)
I agree, but multiply the deadbeat problem X100 when it comes to criminal and divorce clients. Your explanation is a very good one as to why most businesses will extend credit to customers/clients. If you do that in my line of work, you will go out of business.
I sometimes make exceptions when they are repeat clients with a good payment history, or when it is a (semi) respectable citizen who is paying on behalf of his or her wayward son or daughter. Everyone has a sob story, and some of those stories may very well be true, but I simply cannot risk my business and my employees by taking someone at their word in this line of work.
My wife is a corporate / small business attorney. Her collection rate is directly proportional to the size of her clients. 1000-employee firms always pay. One-owner/employee firms sometimes do; often don’t. And this is for businesses that should have less psychological / moral dysfunction than criminals or folks in divorce.
As a result she’s driven a lot of her small-biz practice in the direction of flat fee paid up front rather than the hourly charges paid after the fact. Pick what you want off the menu, pay the posted price, clear the check, and I’ll start work to deliver the goods. In that order.
What *doesn’t *work is the “retainer” idea: Give me $5K for no specific reason and I’ll start working and then later on I’ll decide how much more you’ll need to pay before I deliver anything. That’s too much risk the other way. Or at least is perceived that way by the customers, both honest and scammer.
When I was in IT rather than airlines our primary customers were state and regional governments. Whose craptacularly long and convoluted buying and paying processes threatened to sink us more than once.
I don’t envy lawyers providing services to governments. Neither as employees nor especially as contractors. Good luck to you.
Forming a corporation is one way to protect your personal assets from a business failure. It can be abused, but it can also not work. You have to be very careful. In this case, which actually I remember pretty well, the first matter was creating the new corporation. As the paralegal I did that, and found the similar name, and then found out that the similar name was the same people as the new name. Interesting. (You have to check, because sometimes the Sec. of State will not take a new name if it’s too close to another one.)
Then the client said, “Oh, by the way, I need to defend against a lawsuit, they’re trying to pierce the corporate veil.”
It did not take a genius to see what this client was trying to pull, and it was at that point that the lawyer I worked for decided he could not represent this client, who was clearly trying to use a legal remedy in an illegal way. Then the fun started. It was about this time that the retainer check, which like the client looked good at first, bounced.
I don’t know what happened, but I’m guessing that nobody got their money and the client(s) did not go to jail for check fraud (or whatever). So, yeah, it can work. If you wanna be that guy.
It actually works quit well, changing entities. It works even better for actual humans. Basically, you sell all your stuff to the next guy for a dollar, then commit suicide.
I stopped billing my clientele ~15 years ago. I’d gotten tired of sending people to collection. At first, people were pissy, but I did not bend. I’d suggest they take their business to my competitors if they were unable to pay up front. Within two years, my competitors followed my lead.
Then, about 8 years ago I stopped accepting checks. There were too many NSF checks, and too high a percentage never made good. Again, people were upset (including the district attorney for the county who thought it reflected badly on the area and his new program to help make nsf checks good). Again, my competitors have mostly copied me on this move.
Honestly, I’d rather sit around reading, rather than working and getting stiffed.
What settlement? The ‘settlement’ is that you no longer owe money.
Part of my problem and slowness in filing for bankruptcy years back was that I couldn’t come up with the money up front. In the end, my mother did and it took me two years to pay her back.
The aged parent reports that working at Cook County Hospital in the 50’s, there was always a problem matching up patients to patient records. Because the patients, having changed their name and skipped out on rent, weren’t automatically inclined to confess their previous name to authorities.
Do you mean a different type of bankruptcy? I was assuming the one where the creditors agree to accept less money (rather than no money) and it changes to a monthly payment you pay to the state. who then apportions the money to the creditors who bothered to show up.
I believe the bankrupcy lawyer is always one of said creditors.
I would love to go with “flat fee” work. I hate keeping track of time. It is a miserable pain in my ass that I would love to find a way to stop doing. However, when I have tried to do it, it bites me in the ass.
So, let’s say that for a typical divorce $2,500 is a fair flat fee. If I tell a client that is the flat fee, the case turns into a nightmare. The client wants to litigate every item of furniture in the home, and wants to take depositions on who gets the Christmas ornaments they bought on vacation in 1997. They call three times daily. I lose my shirt on the case.
I realize that not all attorneys do it the right way, but I have written fee agreements that spell out what you get for the retainer, what the hourly rate is, what it covers and does not cover, how much is refundable should the client fire me in the middle of the case, or if I fire the client.
Of course, nobody reads the fucking agreement, and arguments do happen, but it is fairly laid out on paper what they are getting for the money. Further, I think I am very fair to the clients, especially the ones operating on a tight budget. I will cut hours and do some extra things to help them out. If they come to me, they are going through a difficult time, and I don’t want to add to the difficulty. But again, I have bills to pay as well, and if they insist on being unreasonable, then the bills are fairly sent out. The retainer amount is a good faith estimate of what I believe the entire case will cost. If it turns out to be an easier than expected case, I will fairly refund some of the money.
But, bottom line, I have no interest in not getting paid or having to chase down and attempt to collect from non-paying customers.
Ditching another attorney’s bill or MY bill? I would have no problem taking a case where I bankrupted another attorney’s bill. We aren’t in some secret club where we refuse to do that. That debt is no different than any other debt in my mind.
What I won’t do is take payments on a fee for a client to file Chapter 7 bankruptcy. As soon as I file the paperwork, my outstanding fee is now a debt that has to be included in the bankruptcy estate. No siree.
However, on a Chapter 13 (where the debtor will make periodic payments for 3 to 5 years) I take half upfront and the remainder of the fee is rolled into those monthly payments. It is somewhat secure because it is approved by the bankruptcy trustee and the income is verified that the debtor can afford those payments. If the payments are not made then the debtor loses homes and cars and all of the shit they want to keep which is why they filed a Chapter 13 to begin with.
It happens all the time. Virtually every state’s bar ethical rules - which are binding on attorneys - require a written fee agreement in contingent cases. So an attorney working on contingency, like a personal injury attorney, may not be able to collect a fee at all if (s)he forgets to get a written fee agreement.
A criminal defense or divorce attorney who doesn’t insist on payment up front is an attorney who isn’t going to get paid. Criminal defendants who get good service are incredibly grateful right up until about five minutes after the verdict/dismissal/whatever is announced. Then they figure they shouldn’t have to pay anyone since they were wrongly accused in the first place.
I do defense work for large institutional clients (mostly insurance companies). As a general rule, I don’t get stiffed on my fees. 99% of the time, bills are paid. But never in full. Large-scale clients review their legal bills (or more frequently, pay an outside vendor to do it) and simply write off charges they don’t like. As a result, I typically only collect about 90% of what I’m actually owed even when the bills are paid. On the other hand, clients have to be upfront about bill review practices so that is something that we bake into the negotiated hourly rate for each client.
Occasionally, even we get stiffed, of course. My previous boss did about a year of work for an insurance company that was going under, because they had an agreement in place to spin off the profitable operation that he was actually doing work for. The parent company was in receivership so none of the bills were being paid, but the buyer of the spinoff company promised - in writing - to pay the bills and to continue sending us work after the spinoff. Once the deal was done, we continued receiving work… for about six months. And the old bills were never paid, and by the time it became apparent that there would be no ongoing work (and that the firm should therefore sue) the action was time-barred.
No, bankruptcy lawyers get paid out of the pool of money that is shared out among the creditors (though this depends on the form of the bankruptcy). However, they are class 1 creditors so they collect first.
There is a famous (though undoubtedly apocryphal) story they tell about a famous lawyer, who after being rather unenthusiastic about pursuing a particular case was asked by the judge "have you not been paid yet. He answered, "yes, M’Lud, problem is that I ended up marrying because of it
Point being, when you demand and receive full fees upfront, and the case drags or has unexpected delays,and the fees is long since spent, your own motivation to vigorously pursue the case wanes drastically.
Speaking from long law firm experience, sometimes the lawyer gets a retainer, and the retainer doesn’t cover all the work that will need to be done because the amount of work that needs to be done can be very unpredictable. And you bill the client, but in the meantime there are deadlines that need to be met if you don’t want to blow the case entirely. And there’s only so much chicken you can play when you are also juggling numerous other clients. So you go ahead and do the work that needs to be done, and then they stiff you (or genuinely don’t have the money).
