Debt Collection for Legal Professionals

No matter how you phrase it, searching the internet for information on debt collection on behalf of legal professionals doesn’t return much. Just about everything that pops up will be from legal professionals offering their help to consumers.

So if a successful lawyer starts to notice their receivables falling behind, where are they supposed to get the advice that they need in terms of collections?

Because there isn’t much information out there on the topic of debt collection on behalf of legal professionals, we have put together a basic outline that breaks down what today’s legal professionals can expect when they set out to recover fees that should have been paid for services rendered.

Collecting Outstanding Legal Fees

Much like many high-level professions, lawyers regularly run into situations where clients fail to make the final payment for services well after those services have been rendered. And in many cases, those lawyers are too busy working with the next set of clients to bother with handling their own collections.

However, it is important to know that any outstanding debts incurred through legal fees are considered to be just like any other type of outstanding debt. Therefore, those debts are able to be collected in the eyes of the law no matter what part of the country you are operating in.

It is also important to understand that the person who signs up for legal services is the one who is going to be on the hook for paying for those services. That means that whoever initiated the relationship is the person who the legal professional should be attempting to collect from.

Where Things Get Complicated

The unique aspect of collecting on behalf of a legal professional is that there are often court rulings on who should pay for what that get in the way.

One classic example of this would be a standard divorce proceeding where the court requires the husband to pay the wife’s legal fees. However, if the husband should fail to pay these fees, the wife is actually still responsible for them, and she is the one that the legal team should target in collections.

Of course, since many firms do not see it as good business to attempt to collect from former clients, it is not uncommon to see the firms simply write off the amounts owed in these cases.

Collecting Outstanding Legal Fees

Because collecting outstanding legal fees is just like any other type of debt collection, the people collecting those debts are required to follow all of the rules and regulations that apply based on federal laws like the Fair Debt Collection Practices Act (FDCPA), as well as any state or local laws that might add increased restrictions.

If you are not well-versed in the intricacies of the FDCPA, many of the things it addresses are a combination of decency and respect.

Assuming that any respectable legal professional would avoid inappropriate behaviors like attempting to intimidate a debtor, threatening a debtor, or attempting to contact a debtor outside of normal business hours, it should not be very difficult for those professionals to follow all of the rules in their area.

Avoiding Debt Collection for Legal Fees

One of the best ways to avoid any type of collection process for legal fees is to make sure that your clients don’t fall behind in the first place.

Simple policies like charging an up-front retainer fee and having the client make periodic payments while working with them can go a long way towards making sure that they aren’t able to take you for the entire bill once services are rendered.

It is also a good idea to document each and every interaction with a client regarding the fees you are charging them and their understanding of the payments that will be expected.

This documentation will be a tremendous help if you should end up in court attempting to collect from the client, but it can also serve as a firm reminder to the client that you are not working for them on a pro bono basis.

While many legal professionals are capable of serving as their own collection agents, we have found that they are typically far too busy doing what they do best to be distracted by something as trivial as an outstanding payment. At the same time, no one likes the idea of delivering their best work only to be stiffed by the client.

If you are a legal professional who finds yourself in this type of situation, take the time to contact a reputable debt collection agency that can handle things on your behalf. And once that relationship is in place, you won’t have to worry about those trouble accounts ever again.

By |2018-07-30T12:29:02+00:00August 10th, 2018|Blog|0 Comments

About the Author:

Graduated from University of Utah - business degree 1990. Served in US Army as an interrogator / linguist, then as a tactical intelligence officer - Military Intelligence 1986-1990. Managed Western US sales operations for NY based collection agency 1990-1992. Founded Direct Recovery Associates, Inc. 1992-present