Washington Lawyer - November/December 2021 - 8

PRACTICE MANAGEMENT
Does Your Client Need
a Payment Plan?
By Dan Mills
G
etting paid up front by the
client means you have only
one thing to worry about,
and that is solving your
client's problem. When payment is
not made up front, you have two
things to worry about: solving your
client's problem and getting compensated
for your efforts.
That is something of an oversimplification
because lawyering and fees can become
terribly complicated. Criminal defense and
consumer bankruptcy attorneys know the practical
and legal reasons for getting the entire fee
in advance, but many other lawyers are not in a
similar situation. Many clients cannot get access
to legal services without the possibility of a
payment plan. Indeed, Clio, a D.C. Bar member
benefit provider for case management software,
states in its 2020 " Legal Trends Report "
that prospective clients favor lawyers who offer
payment plans for legal services.
However, not every client who wants a payment
plan is right for a payment plan, so it's
important to first vet the prospective client.
A useful vetting tool is Experian Connect,
which provides the prospective client's credit
score and report with the person's knowledge
and consent. The prospective client pays
Experian's $15 fee.
If the person balks at a credit check, he or she is
not a good candidate for a payment plan. The
higher the credit score, the better, and perhaps
you do not want to consider a plan for anyone
with a score below 670, which is the bottom
range of " good " for Experian. In addition,
review bank statements and verify income. The
vetting process can be a screening device and
protect you from difficult clients.
Once you have qualified the prospective client
for the payment plan, present it within the
context of your fee agreement and have a full
conversation about all terms and conditions of
the agreement, including the payment plan.
While you can rely upon the client to make the
payment, it is often best to automate the
process through software and services such
as PaySimple or Chargify, which accept credit
card payments and electronic bank transfers.
LawPay, a D.C. Bar member benefit for credit
card processing, can support recurring payments
required by the plan and allow the
lawyer to ensure that the payments are processed
through the IOLTA, if it is an advance
payment, or the firm's operating account, if the
payment represents an earned fee.
Investigate the mechanics and terms of service
of any autopay system, and be sure it is rulecompliant
and client-friendly. Scheduling
the autopay on your client's payday can be
effective.
The payment plan in the fee agreement should
make it clear when the money will be collected,
how it will be collected (an electronic
method benefits everyone), and what happens
if a payment is late or is not made at all. Know
that charging interest when the client fails to
pay is a business decision, and if you do, D.C.
Rule 1.5 requires the rate to be reasonable. D.C.
Bar Legal Ethics Opinion 310 can also guide
you.
To make payment plans a seamless, automatic
part of operations, some firms opt for case management
software like Clio, which uses LawPay
for its credit card processing. Once a plan is
established, Clio allows the lawyer to automatically
charge the recurring amount on each date.
Clio also integrates with TrustBooks so that plan
payments can be properly entered into the
correct firm bank account and re corded on the
client's ledger. MyCase, also a D.C. Bar member
benefit for case management software, uses
8 WASHINGTON LAWYER * NOVEMBER/DECEMBER 2021
the integrated MyCase Payments system to
allow clients to pay electronically.
Be cautious using person-to-person payment
apps like Venmo, PayPal, and a host of others
that have popped up over the last year or two.
With such applications, fees and privacy can be
a problem for the attorney-client relationship.
A properly operated payment plan can allow
a law firm to take on more business and collect
fees from clients who are not able to pay in
full at the start of the representation. When
clients are paying automatically by manageable
installments, the firm will spend less time on
collections. Thus, the firm can help clients who
otherwise would not be brought into the firm,
and more satisfied clients can result in a higher
number of referrals.
Reach D.C. Bar practice management advisor Dan
Mills at 202-780-2762 or email dmills@dcbar.org.
NEW CLASS from the
D.C. Bar Practice Management
Advisory Service
MANAGING MONEY
How to handle the new client, the fee
agreement and the bank accounts.
Next scheduled session is
December 6, 2021, 9 a.m. to 12:30 p.m.
You may also request a private class
for you and your staff.
www.dcbar.org/pmas
http://www.dcbar.org/pmas
Washington Lawyer - November/December 2021

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