Celebrating 10 years! 2007-2017

Payment Plans

In my first couple years of solo practice I have not allowed dakotalaw03/03/18
My last firm allowed some payment plans with a substantial u lilgub03/03/18
If a prospective client asks if our firm does payment plans, themapmaster03/03/18
LawPay can invoice clients. Ask for a few prior paystubs or khazaddum03/03/18
I think it depends on whether you know the client or not als thirdtierlaw03/03/18
As someone who's toyed with going solo, how in the world can sillydood03/03/18
I suspect so: business clients, high stakes divorce, or a se khazaddum03/03/18
That is what we mostly deal with minus the business clients. thirdtierlaw03/03/18
Immigration normally bills flat fees for each step of a proc isthisit03/03/18
If the client doesn't have good enough credit to get a credi onehell03/03/18
Lots of people can afford a 3-5k service if they have six mo dakotalaw03/05/18
This is true. Very few people can come up with a few thousan fettywap03/05/18
You can definitely get more clients if they don't have to pa jeffm03/05/18
Jeffm-- I like this idea. Should I place an ad in the state dakotalaw03/07/18
"Jeffm-- I like this idea. Should I place an ad in the state jeffm03/07/18
dakotalaw (Mar 3, 2018 - 11:13 am)

In my first couple years of solo practice I have not allowed any client to pay on installments. I accept payment up front and then withdraw if the money runs out, though there have been several times I have finished out a case pro-bono.

I like this system because it eliminates complex billing practices. I don't calculate interest, I don't send monthly statements, etc. However, I am starting to worry that I am leaving a lot of meat still on the bone.

I find myself under utilized and waiting on the phone to ring too much. So I'm wondering if I should start allowing payment plans / going in the hole for clients. Any advice here? Certain practice management software that makes this easy?

Reply Like (0)
lilgub (Mar 3, 2018 - 11:23 am)

My last firm allowed some payment plans with a substantial up front payment (50%). These were criminal cases where additional appearances were required and so the next payment was usually at the first appearance or similar (to allow for another paycheck for the client to come in). There's some strategy to this and experience with repeat business (e.g. if it was repeat business, we were more likely to allow a payment plan).

In some cases you'd lose out between additional appearances while waiting to get paid - because I'd generally not resolve the case right away if I wasn't fully paid and just getting stiffed. So usually the first payment was enough where the firm would at least feel okay if that was the only payment coming in.

It's a bit of an art, but worth considering in some cases.

For civil matters we had retainer plans and we never did much family (i did 0), there was some form of billing. It's a total YMMV and more folks on here, like the much mroe experience solos can add more.

Reply Like (0)
themapmaster (Mar 3, 2018 - 2:39 pm)

If a prospective client asks if our firm does payment plans, that’s a tell that this is not likely a good client and I say no. Actually, hearing that I know to ask for a bigger retainer. If you’re desperate for clients you do what you have to do, but thankfully for the moment I have enough other work that I don’t have to compete among bottom feeding attorneys for near broke clients. I am also of the mind that if you’re building a practice, it’s better to have good clients and make less money, than more money but near broke clients whom you are having to withdraw from.

Reply Like (0)
khazaddum (Mar 3, 2018 - 2:49 pm)

LawPay can invoice clients. Ask for a few prior paystubs or past 60 days bank statements. This is your underwriting of the credit you are extending them. Make this a requirement for ANYONE wanting to be a client who cannot pay a large retainer. Never accept a client and attempt to weed them out after.

Avoid taking clients who want zero down. They won’t value you or your time.

Reply Like (0)
thirdtierlaw (Mar 3, 2018 - 2:52 pm)

I think it depends on whether you know the client or not also how much money you're looking at. One of my bosses will routinely ask for a $50k retainer, but I've seen some agreements where he'll take $25k immediately and then a second payment 2 months later. So well before he has even come close to exhausting the first 25 but makes it easier on the client as well.

Reply Like (0)
sillydood (Mar 3, 2018 - 3:44 pm)

As someone who's toyed with going solo, how in the world can average people cough up $10k or more in retainer? Average people are swimming in credit card debt and have negative net worths.

Are these mostly business clients?

Reply Like (0)
khazaddum (Mar 3, 2018 - 3:54 pm)

I suspect so: business clients, high stakes divorce, or a serious crime with a wealthy accused.

Reply Like (0)
thirdtierlaw (Mar 3, 2018 - 4:28 pm)

That is what we mostly deal with minus the business clients. We do high profile and high value divorces.

Reply Like (0)
isthisit (Mar 3, 2018 - 4:14 pm)

Immigration normally bills flat fees for each step of a process. I collect fees upfront and as parts comes up, I collect additional fees throughout the process (RFEs, interviews, appearances, etc.).

If you don't pay the fee than save that money for a plane ticket or a new attorney.

No payment plans in immigration since your client has no issue with just running for the hills with a new alias.

Reply Like (0)
onehell (Mar 3, 2018 - 9:08 pm)

If the client doesn't have good enough credit to get a credit card with enough of a limit to cover your normal retainer, then they shouldn't pass your underwriting either. So I don't know what doing this solves that isn't better handled by just making sure you have the ability to accept credit cards.

Reply Like (0)
dakotalaw (Mar 5, 2018 - 10:27 am)

Lots of people can afford a 3-5k service if they have six months to pay. Only about 1/3 of Americans can write you a check for 3k.

I’m a courtroom litigator so this means I normally represent real people. I would love to limit myself the the richest 1/3 of America, but at my young age (in thirties, but look 27) rich old people have no interest in hiring me.

I’m actually considering joining a country club to work on this, and I’ve recently leased a nicer car and bought my first $1,000 suit.

Reply Like (0)
fettywap (Mar 5, 2018 - 10:42 am)

This is true. Very few people can come up with a few thousand upfront for a retainer. If you insist on that, they won't be calling back for a few months, and you won't necessarily be the attorney they call back. You can get more clients by accepting payments. Whether they're good clients or not, well...are there any good clients?

Reply Like (0)
jeffm (Mar 5, 2018 - 2:57 pm)

You can definitely get more clients if they don't have to pay so much so quickly. However, once the case is over, far too many of them will simply stiff you for any balance that is owed.

These people that allow their practices to get all mucked up with crappy clients and too much work for too little money must be saints. Go hiking or fly a kite, rather than finding a way to work for free or too little. Or just use your free time to network and build more of a base of clients who can afford you.

You mention you are a litigator. Find lawyers with paying clients who need you to step in and save them from a summary judgment or to handle an appeal, etc. There are a lot of lawyers who sign up these kinds of cases but really don't know how to litigate in terms of handling pre-trial motions, trial, charge conferences, appeals, etc.

Reply Like (0)
dakotalaw (Mar 7, 2018 - 12:45 pm)

Jeffm-- I like this idea. Should I place an ad in the state bar magazine or periodical about co-counseling on litigation cases? Any other ideas on how to market direct to other lawyers?

On the payments issue-- my plan is to ask for a monthly payment so that they are always paying something. Usually civil lit goes like this in my area-- you work up file and draft complaint, could be anywhere between 3 and 15 hours of attorney work depending on the case. You propound discovery with service of complaint. After service, you basically have 2-3 months before you have to do much. In this time, you could demand monthly payments of $200 or so. As the case goes on but before setting for SJM or trial, you keep collecting their payments until the initial quote is paid off. If they don't make payment, you ask to withdrawal.

Once the case is set for trial is when this breaks down, as there is no withdrawal after this. And I could easily say-- pay me $10,000 or I drop, but honestly no one around here is going to pay me this. It's just too much money around here. So I either work for less/free after this point or I get a bad online review.

Reply Like (0)
jeffm (Mar 7, 2018 - 7:59 pm)

"Jeffm-- I like this idea. Should I place an ad in the state bar magazine or periodical about co-counseling on litigation cases? Any other ideas on how to market direct to other lawyers?"

I can't really give advice on advertising strategy. I just had the luck to get to know attorneys who needed my help from time to time. Some of them were tenants in the same building who I'd see in the elevator, etc., and we'd start talking about our practices, etc.

I could see a million ways to get to know various lawyers. Pick-up basketball, clubs/bars, political gatherings, church, at the courthouse, etc. CPA's can also be really good sources of referrals.

I'm one of the types who will, for example, listen to cases being heard before me, and if I see the attorney is out of his/her league and could use help, I have no qualms approaching them afterwards and saying, "Hey, I was listening to your hearing, and here's my impression..." Some of them already know they are out of their league and when they hear you can help, they ask you for your number.

Reply Like (0)
Post a message in this thread