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Getting deadbeats to pay their legal bills

Dolan Media Newswires – Do you have a file drawer in your office reserved
for your clients’ unpaid bills?

Maybe they thought they could pay you, but then they got hit with more bad
luck that year. Maybe they never had the money but had hoped for a miracle that
never came. Or maybe they looked at the bill and said, "Why do you need
my money? You’re a rich lawyer," and threw it in the trash.

Whatever their reason — good or bad — their payment is not forthcoming.

Craig Napier, whose column for The Daily Record recently addressed this
issue, said he faced this trouble often.

As a lawyer just starting out in solo practice, he said, "mine is kind
of a hustle-and-hope business model."

What often happens is that lawyers get a retainer but not the second payment,
he said. At this point, the lawyer is already invested in the case. He or she
has to either ask a judge to be removed or complete the work for free.

The dilemma is "you have an ethical obligation to represent your client,"
Napier said. "You don’t necessarily have an ethical obligation to do it
for free."

Anthony Totta, a criminal, traffic and workman’s compensation lawyer for James,
Totta & Parrish, handles nonpayment by waiting.

When clients return after, say, getting a second DWI, he reminds them that
they still owe him money. At that point clients pay him the balance. Then he
starts their new case.

Happy customers

They don’t call a new lawyer, he said, because if clients like the work an
attorney does and he’s nice to them, they will return. Even if it means ponying
up a back payment.

He requires the first payment before he starts — no exceptions —
and the second payment before he finishes, he said.

"In the long run, it’s better just to do the work and not get the money,"
he said about the second payment. "I have a whole drawer full of deadbeats."

Many lawyers are reluctant to file suit against clients who don’t pay because
it can raise their malpractice insurance or prompt the client to make a bar
complaint. Even when this complaint is unfounded, the bar investigation takes
time. Some lawyers compare it to an Internal Revenue Service audit.

Bud Reynolds, of The Reynolds Law Firm, practices personal injury and family
law.

"People are smart," he said. "They know that most attorneys
won’t sue them for an unpaid bill."

He takes personal injury cases on contingency, but for family law, he gets
paid in increments. He said the key to getting paid in the long run was to tell
clients not to hire him if they couldn’t afford to pay him down the road. Then
they’ll be stuck with an unfinished case.

"The worst mistake that young lawyers make is taking on the problem client,"
he said. "The client whose expectations are so unrealistic they could never
be met. Or the client who doesn’t have the money to finish the case."

Not getting paid happens to experienced lawyers, too, he said. After all, if
people are going through family trouble, like a divorce, it often puts them
in a money crunch.

Backing out

If clients stop paying their lawyers, the lawyers can ask a judge to remove
them from the case.

J.D. Williamson, presiding judge of the 16th Judicial Circuit of Missouri,
said in general, it was harder for a lawyer to withdraw from a criminal case
than a civil case.

This is because the criminal client has a constitutional right to an attorney.
The judge can assign a public defender only if the client is indigent. If he
can afford a lawyer, he is not considered indigent.

Williamson said for this reason, he often ruled that the criminal defense lawyer
had to continue representing the client.

"Not because I have any idea that the lawyer shouldn’t be paid,"
he said. "(But the client’s) constitutional right to a lawyer is more important
than the lawyer’s right to be paid."

In a civil case, he said, he often considers how much time the client would
have to find a new lawyer. If the trial were a week away, for instance, then
allowing the lawyer to withdraw would be prejudicial.
Reynolds said lawyers counted on getting paid in time to pay their staff, court
fees and personal expenses.

Well, that’s no big deal. Lawyers make $100 to $500 per hour. So that’s $4,000
to $20,000 per week, right?

Wrong.

"There’s a misconception among the general public that all lawyers are
rich," Reynolds said. "Every minute is not billable."

– Bridget Heos

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