Statistics show that as an Invoice ages it also becomes harder to collect. Accordingly, we operate a structured credit control process, designed to improve the speed of cash collection without affecting the client relationship. That said, the best way to reduce credit risk is to request Costs on Account ahead of undertaking the work. These will be held in client account and can be applied against the Invoice when this is issued.Our Invoicing Team operate a highly professional debt collection process as detailed below. This usually proves effective, though where you would not like our Invoicing Team to secure payment for you, then you need only let them know. This is addressed when you set up the matter, and Client Owners can amend this anytime.
Our credit control process is summarised below.
Days Overdue
Action
5
Email sent to Client Owner/Lead Lawyer listing sums overdue.
9
Statement sent to client and cc'd to Client Owner/Lead Lawyer.
19
Further statement sent to client and cc'd to Client Owner/Lead Lawyer.
32
Client Owner/Lead Lawyer notified by email that we are about to hand the file to debt recovery.
33
Client contacted by our external debt collectors, by email, phone and letter.
Later
If our debt collectors are unsuccessful, we will contact you about next steps. See below for more details.
If, at the end of this process the client has still not paid, then Central Office will consider taking legal action. You will receive an email asking for details of any possible complaint or claim. Central Office will then review your reply and look to serve a claim form on the client, unless doing so would not be prudent or cost-effective. The cost of all debt collection work is deducted first from any sums recovered. If Central Office believes it would not be economical to start legal action, then the lawyer with the most time on the file may request an assignment of the debt. Central Office subrogates its 25% to the bottom of the recovery waterfall. The assignee, costs and disbursements come first, then all lawyers, pari passu out of any recovery made by the assignee. We will not agree to an assignment where we do not believe the invoice is properly recoverable or where we believe recovery will prompt a claim, complaint or regulatory report.
You should note that where the Engagement Letter does not clearly state the work to be done and give a cost estimate, then it can be very difficult to recover unpaid fees. You should also note that where a client is complaining or claiming against the firm, then this too can make suing for a debt very difficult. Before issuing a letter before action we will ask you some questions to flush out any issues that might be triggered by our suing for our fees.
There are a number of tricky areas such as dealing with interest, foreign exchange exposure and clients who refuse to allow us to use Costs on Account for the intended purpose..