Coffee Talk – The Debt Issue September 2023

Coffee Talk is a regular feature of the Contra Costa Lawyer magazine. We ask a short question related to an upcoming theme and responses are then published in the Contra Costa Lawyer magazine.

For this issue of the Contra Costa Lawyer we ask:

“Do you sue your former clients
if they have an unpaid bill for legal services?”

For this question, we used an anyonomous poll and received 27 responses:

• 19 would not/do not sue their clients
• 7 would or have sued
• 1 said the question did not apply to them

Thirteen CCCBA members shared further thoughts:

Unfortunately, I have had to on a few matters where the client failed to pay a large bill. Have learned, always get full retainer before trial for any anticipated trial fees and costs.

I work with mostly modest means and low income clients. I do not sue them for unpaid fees. My opinion might change if I was working with people that had higher means.

It is tricky since it can spur clients to countersue with malpractice, or result in bad reviews.

I have never needed to sue a former client for a bill, but if the bill was substantial I would. That said, most attorney malpractice cases are filed after the lawyer has sued the client for unpaid fees.

I suggest that, for most, malpractice insurer requirements for coverage is the primary driver of affirmative and negative responses to this question. I speculate it is also reflected in the size of retainers requested by firms who have malpractice insurance that does not cover client cross-complaints that allege malpractice in attorney collection actions.

I try to never be in a position to have to collect fees by requiring evergreen deposits and in some cases by using a FLARPL. I also will write off fees before suing or sending to collection. It’s often less headache, risk and cost to let a bill go than to pursue it. I will also not agree to full scope representation unless I have verified the client will be able to continue to fund the cost of representation for the entirety of the case.

Suing a client for unpaid legal services is a reflection of an attorney’s poor law practice management skills.

Generally not worth it. Only did it one time when the client needed emergency assistance and then refused to pay after I jumped through all kinds of hoops to help him. He ended up paying.

Even if the statute of limitations on malpractice has run, I still have never sued a former client for an unpaid bill. In part, shame on me for letting someone get so far behind. But also, regardless of the result, it would be worse to have to spend more time and money chasing someone. Of course, my bills are small in the grand scheme of attorney-bills, so I can survive the occasional dead-beat. It’s only happened 4-5 times in 40 years of practice, and each time I argued myself into letting it go. I still feel that was the right choice for me.

One reason why I don’t go private, I could never collect unpaid debt from a client.

I would take a class on collecting the unpaid attorney fee orders from the opposing party.

Taking such a step is unfortunate, but there is no doubt the client would pursue its customers who are deadbeats.

I mainly prepare estate plans, and suing to collect a couple thousand in outstanding fees would not be worth the time/effort.