Web Marketing for Lawyers

As the economic situation continues to challenge all kinds of businesses, both companies and individuals may try to delay making payments due for as long as possible. For some small law firms who have already seen a reduction in the volume of client business over the past year, this delay in receiving revenues and ensuing cash flow problems could cause serious damage.

Here are some tips for both preventing and managing delinquent clients:

• Make sure the client statement specifies both how much money they owe you and how long they have to pay it. Standard time is 30 days. You could impose an interest payment on any amounts that are not paid within those 30 days as an added incentive for them to give you the money sooner rather than later.
• High levels of debt among the general population mean that it’s very likely you will have clients who are not just delaying payment; they simply cannot pay. Make sure you let clients know well in advance when payments are due, and then keep calling them and writing on a regular basis until you receive the money. Work out some kind of a payment plan if they have genuinely fallen on hard times. It’s better to receive a small amount of money every month than nothing at all.
• Make it easy for the client to pay. Tell him or her you’ll accept a credit card, PayPal, be paid via wire, money order or personal check.
• Be professional in all dealings with the client even though you may be tempted to scream down the phone at him. After all, you still want them as clients after the recession is over (that’s providing they end up paying you). Always ensure that you or the person in your firm who is dealing with them is courteous and calm.
• Be clear in your communications not only about what they owe but also about the actions you’ll be forced to take if they don’t comply.
• There’s something to be said for the squeaky wheel. You can be sure that you are not the only person the delinquent client owes money to. Again, stay in touch with them as much as you can, be it through letters or on the phone, until you receive payment.
• When all else fails threaten legal action. Chances are if the client can pay something, at this point she will.

The experience of having one or more delinquent clients forces a firm to pay more attention up front, before deciding to take on a case. Ask yourself beforehand whether the client appears solvent? If it’s a company, do your research. Can you get references from other people who have done business with the client? Be disciplined about doing your homework. Better to spend the time initially deciding whether to take a job on than to do the job (even if you need the business) and not get paid for it.