Just about every lawyer has had the experience of having a client with a good case come to them in need of help but unable to pay the full retainer.
Unfortunately, too often, lawyers turn away clients who can’t afford the upfront retainer (even on a credit card), but if given the option of a payment plan, might have otherwise been able to pay. This is due to the fear that lawyers have that clients will just stop paying. That fear is rather understandable though, as there is no shortage of anecdotes involving deadbeat clients skipping out on bills without retribution (because what attorney wants to get into a fee dispute or sue to collect from a client?).
Below, you can find three tips on using current tech to make payment plans safe and easy, at least for certain clients.
1. Check a Client’s Credit
Thanks to the wonder that is the internet, a credit report can be obtained within a matter of minutes and often for free. Before you say no to a payment plan, ask the client to provide you with a copy of their credit report. If they refuse, then you probably should too.
Set a minimum credit score for potential clients to qualify for a payment plan. While not every client will qualify, doing so is one way to help mitigate the risk of a non-paying client. How low you’re willing to go is entirely dictated by your personal level of risk aversion.
2. Confirm the Client’s Income
If a payment-plan-seeking client’s credit score checks out, you’re still not done vetting the client’s ability to pay (at least if you plan on getting paid). You should next request the client login to their online banking to show you the last few months’ worth of statements and to confirm that they really can’t afford the upfront retainer.
You want to see regular income, and get an idea of the client’s monthly spend. If it’s clear the client is living beyond their means, you might want to have a conversation with the client about how they expect to meet their payment obligation. Also, you want to note when the client’s payday is, so that you can have automatic payments set up to trigger the day after payday.
3. Setup Automatic Payments
If you decide to move forward with a payment plan, do it right, and setup automatic payments as well as all the legal forms and disclosures you need to do this ethically. The number of online payment processors that will allow you to do this is amazing, and the process is generally rather easy. Yes, it’ll cost a little extra in fees, but not much (and you can probably charge a reasonable interest rate to cover those fees). Protip: the fewer installments the better.