Get Paid up Front: A Cautionary Tale about Getting Stiffed by a Client
A friend of mine named Oliver recently told me a story about getting stiffed by a client. This is a problem common to many lawyers when they either don’t get a retainer or don’t collect a large enough retainer before starting to work for a new client.
Because of the prevalence of this issue, Oliver and others who heard the story asked me to share it. Getting stiffed by a client is likely to happen to all of us at some point, but this is just a reminder to do what you can to minimize that possibility.
Here’s Oliver’s story:
I was involved in a day-and-a-half long civil trial last Fall. I had asked the client for an appropriate retainer a month prior to trial. He was not forthcoming with it. Due to our local rules, I couldn’t resign that close to trial. I did my best and it was tough case. I gave the judge a path to a favorable decision, but my client’s testimony wasn’t as good live as when we had prepped. My client did not like the outcome. After trial additional work was required on submissions as to costs, which I was ethically bound to prepare. I still didn’t receive any money, despite multiple demands.
Now, as is his right, the client has submitted all my accounts for review by the court assessment officer (including the ones he had paid). So now not only do I have a $15,000 accounts receivable balance, I also have a mandatory mediation and then at least a one day hearing (non-billable) to deal with it.
The moral of the story is: get your retainer deposits. Don’t get yourself in a position where it’s too late to quit and you have to do more work you know you will not be paid for.
While unfortunate, Oliver’s story is not unique. Thousands of lawyers have been stiffed by a client. In fact there are clients who plan to scam their lawyers from the start. Consider this story that author Portia Porter shared with me in our interview a couple of years ago:
Heather was happily married. Heather’s husband had a good job and provided for her. Heather did not have to work. There was a child on the way, and Heather’s husband was a proud father-to-be. Indeed, Heather and her husband even made public announcement that they were expecting. All the grandparents were pleased and proud. Life was good for Heather. But everything changed unexpectedly when Heather’s husband revealed that he had been sleeping with another woman for all that time. Husband wanted a divorce.
Heather was surprised and angry. Or, in her own words, “blindsided” and “not going to sit back and take having my life I thought we had be ripped away from me.”
Heather wanted her comfortable life back. So Heather formulated a plan. She decided to hire (and I quote again) “a good attorney who will look out for my best interest in the most ruthless way possible.”
Heather wanted her happy life back, and she expected that a lawyer could do that for her.
So far, so good.
But, of course, remember, Heather was unemployed and had no intention of looking for a job. How could she get a “good” lawyer to fight “ruthlessly” for her, without paying him?
That was the dilemma, and that’s where Heather turned to a divorce chatroom. She needed advice on how to get a “ruthless lawyer.”
In the chatroom, there was another girl, Julia. She responded to Heather with advice. The street-wise Julia was succinct. Here’s what she told Heather. I quote Julia’s advice in its entirety:
From Julia to Heather: “Drag it out, then stiff your lawyer is my suggestion.”
Oliver asked me to share this advice: “Learn from my mistakes instead of making your own. It’s cheaper that way.” So let me reiterate the lesson, lest anyone miss it: Get paid up front, or you might not get paid at all, even while you’re indefinitely stuck doing the work of zealously advocating for your (insert descriptor here) client.
Photo by niXerKG.