We Suggest You Don't Do It, but Offer Some Tips on How to Proceed if You Must
One of the most frustrating problems we see occur over and over again is attorneys suing clients for fees, and the client asserting a counterclaim for malpractice. We recommend that attorneys not sue clients for fees. We could give you shocking examples (a Texas firm sued for $35,000 in fees, but the jury awarded $6.4 million on a malpractice counterclaim), but some will no doubt argue that their situation is different. If you are determined to sue for fees, here is an analysis we suggest you go through.
1. Do not sue if the client did not receive a good outcome. You will have to explain to non-attorney jurors that you charged $150 per hour and yet it wasn't your fault the client lost the case.
2. Do not sue if there was no written fee agreement - one more fact issue for a jury which most likely doesn't think much of lawyers to begin with.
3. Have someone outside the firm evaluate your fee case. A lawyer who takes his own case has a fool for a client. We hope such outside counsel will point out actions or considerations that could have a negative impact on the jury, like refusing to turn over files or the possibility that you will not be a likable witness. Some of the best attorneys make the worst witnesses because they think ahead and appear to juries to be condescending.
The attributes that make a particular attorney a good advocate, such as aggressiveness, may have a negative effect on a jury.
4. Only sue if it makes economic sense to do so. Factor in the following costs in your analysis: 1) The time you could spend on paying clients; 2) legal and other expenses necessary to pursue your claim; 3) the effect on your insurance rates if a counterclaim is made; 4) the likelihood of collecting if you do get a judgment. We recently had a case where the expenses on a $40,000 fee suit were about $80,000 -- and the jury found malpractice.
5. Consider the future. Learn from those cases where you want to sue how to avoid letting a bill run up to the point where you feel pressured to sue. Bill early and often, and withdraw from cases where the client does not meet financial obligations to you.
I recently had a judge tell me his father's philosophy on suing for fees. His father would send the bill and wait 6 months to see if the client would pay, and then write to the client and forgive the debt. His reason was that a client who owes money will not refer business since he expects the attorney to dun him if he shows up at the attorney's office. He would not work for that client without sufficient security in the future, but he claimed to get good referrals from some slow or no pay clients. When you sue for fees, you can't be sure with whom the client is (or will be) connected.