A recent ABA Journal article, “When Letting a Bill go Unpaid Can Be Good for Business,” discusses how pursuing clients for unpaid bills can be counterproductive.  Scott Saul, a Miami criminal defense attorney, has had his share of clients skip out on their bills.  But rather than send threatening letters, hire a collection agency or sue for the unpaid balance, Saul chalks up the loss.  Taking a hit rather than chasing the money, Saul says, is actually good business.

“Ninety-nine percent of the time when people don’t pay me, it’s because they don’t have the money.  It’s not because they don’t want to pay me,” says Saul, a solo since 1997.  “I can come down hard on somebody, but I’m trying to get blood out of a stone.  If I come down hard on them, I’ve lost them as a referral base forever.”

Saul says it’s best to keep things civil.  “If you have a falling-out over money, then the next time they need a lawyer—many of my clients are repeat customers—they’re not coming to you,” he says.  “Sometimes it makes sense to say, ‘I’ll tell you what, I’m going to give you a break.  So refer me business and I’ll wipe your debt to me.’ ”

For solos facing delinquent clients, the trick is striking a balance and considering a cost-benefit analysis.  How much time and money will you spend trying to recover fees?  Houston civil attorney Scott Rothenberg says filing suit is a last resort.  “Litigation is always a time-consuming activity,” Rothenberg says.  “It’s very draining, and it’s something you want to limit as much as possible because it infringes on otherwise productive time you could be spending with other paying clients.”

The risk with filing suit to recover fees is that it opens up lawyers to counterclaims of malpractice if the case did not have a favorable outcome, and that can aggravate and already aggravating situation.  Thomas J. Watson, a senior vice president at Wisconsin Lawyers Mutual Insurance Co., a malpractice insurer, has spoken to many lawyers who have faced this dilemma.  “There is no silver-bullet answer,” he says.  “It’s a personal business decision every lawyer must make.”

The best advice is to be proactive---to secure an adequate retainer with a clear set of expectations up front.  “Have effective communication.  Use your bills as communication tools,” Watson says.  “They should not be mysterious to clients.”