A recent Connecticut Law Tribune story, “Firms Grow Bolder About Suing Clients for Unpaid Legal Fees,” reports that suing clients for unpaid legal fees could become routine as firms are growing more assertive about collecting overdue bills.  “There was a time when a lot of firms would feel it was unseemly to bring an action against a client” regardless of the amount owed, said Martin Wasser, a partner at Phillips Nizer.  “Firms are more aggressive in following up with bills than they’ve ever been,” said Wasser, whose firm is among the many that have filed suit to collect fees from former clients this year.

The New York Law Journal reviewed law firm collection suits against former clients filed in the past two months in Manhattan Supreme Court.  Each week, between three and seven such suits were filed during the period.  Several attorneys said lawsuits are a last resort and that whether to sue a client is decided on a case-by-case basis depending on factors such as amount owed, the length of the relationship, risk of counter malpractice suit, and whether the client can afford to pay.

Not all fee disputes wind up in court.  The number of cases closed in arbitration and mediation programs overseen by the state court’s Attorney-Client Fee Dispute Resolution Program increased to 1,179 last year from 579 in 2004.  The figures don’t capture disputes going to private ADR providers.  Generally, attorneys can’t file suit against clients who have chosen to use the ADR program.  The amount in dispute must be between $1,000 and $50,000, although it could be more if the attorney and client consent to arbitration.

Howard Koh of Meister Seelig & Fein which has sued clients for fees in the last year, said that before initiating litigation, the firm considers the client’s ability to pay, what the firm considers to be the value of its work and the client’s expectations of cost.  “If we honestly and genuinely believe we had” not served the client well, “we would not bring suit,” Koh said.  “When we bring a lawsuit we have made a decision that despite what the client may say after the fact, no malpractice occurred.” 

Koh drafts and oversees collections suits at his firm in addition to his commercial litigation practice.  “It’s not the most glamorous but it’s the straw I drew,” Koh said.  Time spent on these cases, he recognized, is “time that could be spent billing existing clients and generating revenue that way.”