Clients still paying the bills, but attorneys see tough times

By Tom Gantert

Legal News

Four years ago, Jackson Attorney Brendon Beer had clients who were more than six months late on their legal bills.

They were clients affiliated with the automobile industry and were suffering as General Motors and Chrysler went through bankruptcy.

Beer, an attorney with Abbott, Thomson and Beer, said because of the bankruptcy, they needed the legal help more than ever.

"But they didn't have money to pay me," Beer said. "I just did it on the hopes they would turn around and be able to pay the fees. Eventually they did. Now, they are back to be a 30-day pay or 60-day pay."

Despite Michigan suffering through one of the worst recessions in a generation, Michigan attorneys said their clients for the most part are still paying their bills.

The 2010 State Bar of Michigan survey found that 16 percent of attorneys in private practice reported that 13 percent or more of their fees were "uncollectable." That's a slight increase over the 14.2 percent who reported 13 percent of their fees were lost. But the 2010's statistic was in line with 1991.

Jackson attorney Adam Howard said he hasn't noticed a spike in unpaid legal bills in his practice.

"There are always some people who are slow to pay their bills or don't want to pay their bills," Howard said.

Howard said he doesn't worry about late payments when dealing with regular clients.

"I've found I have the best luck with new clients if I set the expectation up front that they'll give me a retainer before I start working," Howard said.

Howard said he sets that retainer on a case-by-case basis.

"I want to make sure at least my preliminary work is paid for," he said. "If the client is dragging their feet about paying a retainer, you can be sure they will drag their feet when the bill comes. That may be a client you may not want to have."

Jackson attorney Brad Brelinski said he has no set policy on how he goes about collecting payments.

"You have to evaluate what you are getting into at the beginning of the relationship," said Brelinski , who works at Curtis & Curtis. "Every situation and client is different so there is no set policy other than a retainer. For a criminal matter, you may want everything up front."

Brelinski said he does require a retainer "no matter the type of case."

"You have to recognize the situation people are in and be more flexible. But that doesn't get around some type of retainer," Brelinski  said. "If they are not willing to pay anything up front, chances are they are not going to want to pay at the end. That's a red flag."

Donald Darnell, a Dexter attorney, said his clients are still paying their bills for the most part. But the economy has impacted how he does his business.

In the past, Darnell said he would raise his rates once every two years based on his experience. But due to the economy, he hasn't raised his rates since 2005.

"Before 2008, I'd quote a married couple a fee of $1,500 and my closing rate was in the high 90s if not 100 percent," Darnell said.

Now his closing rate is about 80 percent, as many potential clients balk at his quote.

Published: Thu, Feb 23, 2012