Billing Do’s & Don’ts

Sally Field, Legal Professional Liability Leader, Attorney Protective

May 6, 2015

Sally Field

Sally is an attorney of over 30 years and Legal Professional Liability Leader for Attorney Protective, a Berkshire Hathaway Program. Sally began her career as a litigation attorney in Dallas where she handled a diverse docket of cases, making her no stranger to the challenges that law firms face every day.

Sally earned her Doctor of Jurisprudence from the University of Houston, and her Bachelors degree from Oklahoma State University, where she graduated with honors.

As a professional who has worked in legal liability insurance for more than 19 years, Sally has vast knowledge of the risks that lawyers encounter. Sally has shared that knowledge many times over the years by speaking at a number of conferences and by publishing numerous articles.

Speaker Bio

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The Do’s & Don’ts of Billing

1. Pick Good Clients2. Be a Good Listener

3. Clear Away the Smoke & Mirrors4. Live Within Your Means

5. Remember Your Client is Not an ATM6. Don’t Act Like the Cable Company

7. Know When to Hold ‘em and…8. Manage Your Receivables & Don’t Sue for Fees

9. Law School, Get Over It!

Introduction

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Do pick good clients

How do you ensure that you get paid for your work?

You pick good clients

Understand & then assess the reasonableness of their expectations

Do due diligence on their ability to pay

Look for warning signs like “The sky’s the limit” or “Money’s no object”

Practice Tip: Avoid saying “yes” to the engagement in the first meeting to be sure you actually want to take on the matter

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Picking good clients - client & matter screening

Initial information gathering> What to ask for:

– Name– Business contacts and affiliations– Approval for financial background check

> What to not ask for:– Avoid asking about the details of the case until a conflicts check has cleared

> How to ask: (involvement of non-lawyer staff):– Initial information can be collected by non-lawyer staff to ensure that the

attorney doesn’t learn too much information before ruling out possible conflicts of interests

Client Interviews> Trust your instincts

– Is the client going to only be happy if very specific results are achieved?– Does it sound like the client has had a history of problems with attorneys?

> Set expectations - review not just the ideal scenario, but also the potential negative outcomes

Practice Tip: Forms are useful – Florida State Bar Association “Initial Client Consultation Iinterview Form” is a great sample starting point. [From “The PRI Administrative Forms Handbook ONLINE”.]

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Don’t pick unworthy clients

Warning signs of unworthy clients --

Changing lawyers in the middle of the case

Trashing the lawyer they just left

Reluctance to answer basic questions

Overly opinionated about law without justification

Unreasonable expectations

Micromanager

Excessively long initial client interview

Wanting to use the legal system as a weapon of revenge or punishment

Negative comments about the judicial system, judges or courts

Companies with high turnover of key staff or unusual corporate structures

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Do be a good listener

Lawyers get in trouble with their clients because of poor listening skills

Rule 1.4, “Communication”, of the Model Rules, describes a lawyers ethical duties with regard to client communication including the duty to:

Consult with the client about how their objectives will be accomplished Keep the client reasonably informed Promptly comply with requests for information Promptly inform the client of any matter requiring their informed consent Explain the matter to the extent necessary to permit them to make

informed decisions

We are a society of interrupters – don’t assume you know how they want the case to go or what their concerns are – if you are quiet long enough they will tell you

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Lawyers don’t get high marks for listening

A recent ABA study showed…

95% of satisfied clients reported their lawyer listened to them & paid attention to what they said

42% of dissatisfied clients said their lawyer listened to them & paid attention to what they said.

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Lawyers don’t get high marks for listening

Practicing good listening runs the gamut of the representation – from client intake to billing issues to settlement decisions – it even should drive attorney marketing

Listening can be learned . . . don’t put furniture barriers between you and your client display open body language insist on no interruptions give them the time they need to tell their story show empathy ask open ended questions

Practice Tip: Listening is good marketing too - See e.g. Global Client Feedback Initiatives, LexisNexis®,Martindale-Hubbell® in association with the Wicker Park Group, 2011, available at http://www.martindale-hubbell.co.uk

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Do clear away the smoke & mirrors

At the outset, demystify your billing process & explain the fee agreement

Explain how the expenses are determined – in detail

Stand in your client’s shoes as a consumer - the plumber, the surgeon, the mechanic all told us

Communicate value in every bill – simple, clear entries that are detailed enough to understand how the work is necessary & relevant to the client’s objective

Practice Tip: Introduce your clients to a billing contact in your firm to whom they can direct their questions

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Do live within your means

Living within your means is the new normal – budgets, fixed costs, flat fees, etc.

Clients are faced with trimmer staffs and leaner expense budgets and they expect you to adapt as well

To retain clients and meet expectations, lawyers have to find more & more ways to increase efficiencies and lower costs

Be absolutely TRANSPARENT about significant charges or unexpected costs

Practice Tip: Implement the sticker-shock call!

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Living within your means – limited representation

Rule 1.2, subpart c, of the Rules of Professional Conduct is being used more & more to allow client & lawyer to live within their means by limiting the scope of the representation

The limitation must be reasonable under the circumstances & the client must give informed consent, preferably in writing

Is a way to take on a client with more limited needs & expectations

Owe client the same duties of competence, confidentiality & loyalty

Limited scope representation is ethical but it is not - Not limited liability, not second class practice or obligations Not just for the poor

Certain areas is more tailored to including family law, landlord/tenant, special needs advocacy, certain real estate transactions, etc.

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Don’t treat your client like an ATM

A bill is just a piece of paper – it is not the pin to your client’s ATM

Anything unusual should be explained BEFORE they see it on the bill

Timing is everything – bill in cycles that are good for their business, bill after milestones in the case

Disclose inefficiencies & write them off on the bill as a “NC”

Practice Tip: Call a week before the bills go out to catch the client up on what is going on with their case

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Don’t act like the cable company

They are hard to reach or don’t respond at all

Whatever time estimate they give you is always too far away, inconvenient and fluid

They over promise & under deliver

You should instead “wow” them by under promising & over delivering on both results & timeliness

Don’t ask clients to understand your busy schedule – it’s not their problem

Practice Tip: Return calls – Be timely – Stand Out!

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Do know when to hold ‘em and . . .

…know when to fold ‘em

What is your client’s objective in the case?

Revisit that objective at key junctures to ensure it hasn’t changed

Be strategic – they are hiring you for your savvy judgment in how to achieve their objective (often for the quickest result at the lowest possible cost)

Practice Tips: Document your strategy early, revisit it often and then document decisions and actions.

Tie bills specifically to client’s hoped for results.

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Do manage your receivables & don’t sue for fees

Managing your receivables:

Set your expectations about being paid timely upfront Don’t let the overdue amount get out of hand, easier to

pay a small bill than a larger one Easier to withdraw earlier rather than later Don’t ignore non-payment – call and ask why your bill

isn’t being paid Pay attention to warning signs

If the client is not paying you -- there is generally one of three reasons why

Practice Tips: Include a personal touch like a hand-written note or client newsletter with the bill.

Bill immediately when you achieve a major milestone.

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Law School -- Get Over It!!

What do clients want?

Words of wisdom from Vince Foster . . .

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17 Lawyer Tips: A Mini Manifesto – from The [Non] Billable Hour

1. Whenever your clients don’t understand what you are doing for them, they think about what you are doing to them.

2. Many of your clients remain your clients because it is a pain _ _ _ to find another lawyer – not because they love you.

3. Every time your clients get your bill, they think about how beautiful your office is and about the nice car you drive. And they wonder if you are worth it.

4. If your office is a dump and you drive a wreck, they wonder about that too.

5. If your client doesn’t pay you, fire them. Don’t ignore them.

6. At least once a year, tell a client, “It’s on the house.”

7. Taking a client to play golf doesn’t show how good of a lawyer you are. It shows how good a golfer you are.

8. Quit being a pompous, demanding jerk around the office. If you can’t keep good staff, you don’t deserve good clients.

9. Your clients will always know their business better than you do. They may even know the law better than you. Make sure to seek their advice before giving yours.

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17 Lawyer Tips (cont’d)

10. A lawyer charging extra for stamps and copies is like a car wash charging extra for water. Stop it now.

11. Your clients have wants. Your clients have needs. They often don’t know the difference.

12. Whenever you interrupt a client meeting to take an “important” call, your client thinks about hiring another lawyer.

13. Imagine a world where your clients knew each month how much their bill from you will be so they could plan for it. They do.

14. If you hate being a lawyer, be something else. You are smart. You’ll figure it out.

15. A bill is not communication. At least not the good kind.

16. When is the last time you called a client just to thank them for being your client? That’s what I thought.

17. People don’t tell lawyer jokes just because they are funny. They tell lawyer jokes because they think they are true. Spend your career proving them wrong.

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Conclusion

Do establish consistent polices and procedures for billing & collection that all attorneys and staff must follow

Don’t underestimate the importance of timeliness & its effectiveness as a risk management tool

Happy Clients + Happy Staff = Lots of Business

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Attorney Protective Legal Policies are issued by National Liability & Fire Insurance Company and administered by Attorney Protective. All coverage is subject to specific policy terms and conditions. 2014 Attorney ProtectiveSM. ® All Rights Reserved. Information provided by this presentation is not intended as legal advice. This presentation and its materials provide best practices for use in connection with general circumstances, and ordinarily does not address specific situations. Specific situations should be discussed with legal counsel licensed in the appropriate jurisdiction. By publishing practice and risk prevention tips, Attorney Protective neither implies nor provides any guarantee that claims can be prevented by use of the suggested practices. Though the contents of this document have been carefully researched, Attorney Protective makes no warranty as to its accuracy, applicability or timeliness. Anyone wishing to reproduce any part of this presentation or document content must request permission from Attorney Protective by calling 877-728-8776 or sending an email to lacy.cripe@attorneyprotective.com.

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