What to do when a client fails to pay for work performed

September 25th, 2012 by Briana Cummings

First, discuss the unpaid bills with the client. This might give you insight into why she is not paying. (E.g., maybe she didn’t understand the payment arrangement you made.)

Money

Second, inform the client that if she fails to pay the past due amounts, you will have to withdraw from representation. ABA Model Rule 1.16 and most states’ ethical rules allow a lawyer to withdraw from representing a client for nonpayment of fees if the client “has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled.”

Third, if the client agrees to pay, secure the commitment to pay by a certain date in writing.

If you do not receive payment by the agreed date, withdraw from the representation. Resist the temptation to keep the case based on the client’s promise to pay later. This will make it significantly more difficult, if not impossible, to withdraw later. In litigation, court rules commonly require the court’s consent before the attorney can withdraw, and courts routinely deny motions to withdraw, especially on the eve of trial, on the grounds that it will likely prejudice the client or affect the case — even if it means the attorney will be trying the case for free.

If the court grants your motion to withdraw, you must “take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled” (Model Rule 1.16(d)). Send a letter to the client terminating the attorney-client relationship enclosing a copy of the court’s order. Remind the client of upcoming deadlines (including the deadline to retain new counsel). You may also state the amount due for your services through the date of termination to preserve your right to payment should the client’s financial situation improve.

You must surrender the client’s files, unless you have the right to an attorney’s lien (i.e., pending payment of client’s fees). Note that many ethics committees and courts have placed limitations on the circumstances in which an attorney’s lien can be used. The best course may just be to make a clean break by surrendering the client’s files.

Source: Peter T. Snow, “When Clients Stop Paying Act Quickly to Cut Your Losses,” The Young Lawyer, Vol. 16(10), Sept. 2012

4 Responses to “What to do when a client fails to pay for work performed”

  1. October 29, 2012 at 6:34 pm, Structuring payment arrangements: How to ensure you get paid | Law School Disrupt said:

    […] If an account is truly uncollectible, write it off and go on to new matters. See my post on what to do if a client fails to pay. […]

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