Firm billing policy change

Learn from us...

Just for anyone's edification and education, I wanted to mention a policy change that our firm's making in the client billing/collection area. I mention it because client billing/collection is critical. If there's no income, soon, there's no business. (Of course this issue is never spoken of in CLEs but it's critical to our survivial).

Current policy: With some exceptions, most of our client work is pure hourly billing. We'll take a retainer up front and then bill monthly. When someone got behind, we've been using a 3rd-party collector (not collection agency) to make calls to clients to remind them to catch-up and make payments. She kept 10% of whatever she recovered. This policy was effective to a degree, but I've found that a group of 5ish clients have become intransigent...so something had to be done.


New policy: The change is partially driven by the fact that we've added some new administrative staff so it's no longer necessary to outsource the "reminder" calls. So there will still be "reminder" calls every month if someone's slow on their payment. However, we will start charging interest on bills not paid within 30 days. We've always had the interest language in our retainer agreements but we haven't enforced it. Second, if no payments after two months, then either withdrawal (if a current case) or collection agency (if a former client).

I'm still leary to file suit; I'd like to avoid that route. But collection must be hard-core. We lawyers can't be the softies. I know I missed a payment once on a cell phone bill and they're after you QUICKLY! Isn't my own livelihood as important?

Any other learning tales to share out there?