It's highly advisable to require a client to pay Costs on Account if some or any of the below factors apply:
Since the norm is to invoice on a monthly basis, the costs that a client will be required to pay on account will usually be equal to the amount of fees and disbursements anticipated during the forthcoming 30 days. Alternatively, for fixed-fee work it is advisable to take a sum on account of the entire fixed fee. Where the client is required to pay VAT, a sum equal to the anticipated VAT should also be included in the costs collected on account. Requesting Costs on Account is a very good way of assessing how a client will behave on a matter.
In a litigation matter, we strongly advise that you obtain Costs on Account for any forthcoming hearing or other major court work to be received at least two weeks before you undertake the exercise. Where the exercise is complex, then we advise extending that two-week period to a period long enough to allow the client to instruct other lawyers to deal properly with the upcoming exercise, if necessary. Our professional rules prevent us from leaving our client in the lurch and failing to get Costs on Account early may in practice mean you are compelled to accept significant fee exposure. You should also bear in mind that after any court case, it is very common (even if you win) for the client to be dissatisfied and not inclined to settle the legal fees incurred.
When Costs on Account are required, you should tick the relevant box in the New Matter Form. This will then prompt a Costs On Account Statement to be prepared and to be sent out as you direct in the New Matter Form (note if you select the client, it will be sent out immediately, so don't select this option unless this is intended). You should also make appropriate reference to the Costs on Account in the Engagement Letter (though this does not automatically trigger a Costs on Account Statement to be sent). A client must have passed our AML checks before we can receive funds from it into our Client Account. Costs on Account can also be requested at any time during the course of the matter. This can be done through Keyed-In by selecting Clients & Matters/Costs on Account Statement.
Receipt of Costs on Account will be confirmed by email to all lawyers sharing or working on a matter in Keyed-In. Where Costs on Account are appropriate, we suggest you do not commence any substantive activity on a client matter prior to the receipt of funds.
If you introduce a client which falls within one of the risk categories identified above, but you do not deem Costs on Account from them to be desirable, then you are entitled to make that decision at your own risk PROVIDED no other colleagues or Central Office are made subject to any fee or disbursement exposure without their express written consent.