It’s “Legal Fee Holiday” Season

Dec. 3, 2012 - PRLog -- John Toothman, a legal fee expert and founder of The Devil’s Advocate, is reminding lawyers’ clients to celebrate the holiday season with a big legal fee discount: “If you’ve got unpaid legal bills, you can expect special attention from your lawyer as the holiday season approaches.  But it has nothing to do with holiday spirit:  It’s all about the peculiar economics of law firms.”

For many lawyers the end of the year isn’t just holiday season: It’s bonus season.  That’s when the lawyer’s financial contribution to the law firm is calculated and the bonus money handed out.  Bringing more money into the firm by the end of the year equals more bonus money back to the lawyer.  Clients with unpaid bills and the money to pay all or part of them can negotiate big discounts, if they pay in time for this year’s bonus pool.  Devil’s Advocate has been leading this celebration for more than 20 years.

Clients with outstanding legal bills can do themselves a big favor because they’ve got something the lawyer wants: Cash.  Thanks to the arbitrary deadline for the bonus system, it makes a big difference whether you pay your bill in December or sometime later.  Money in the law firm’s door before the end of the year counts for this year’s bonus, but money paid later won’t come back in the bonus for another year.  “You can see how that would provide a big incentive for the lawyer to accelerate your payment, even if it’s just by a few days or weeks,” Toothman noted.  “So, even if you just pay the same amount you were planning to anyway, by moving it up a little or just asking for a discount before you send it in, your money will go further.”

Whether it’s been a good or bad year for the law firm, the partner bringing in cash is king (or queen).  If your balance is large or it’s been awhile, the lawyer may try some arm-twisting or threats first, but he or she may also appeal to your holiday spirit.  If you can afford to pay, and the fees are reasonable, now’s a great time to work out a deal.

What sort of discount should you ask for?  “There’s really no limit to how much the lawyer might cut off a paper receivable to get a chunk of cash in the door.  It depends on how desperate the lawyer is for the bonus money and how much cash you’re offering.  The amount of your debt on paper is secondary, especially if the lawyer’s in a hurry.  It helps if you identify problems with the fees.  Firms write off lots of fees all the time.  At this time of year, the difference is that their own partner may be your ally, with an incentive to help you,” according to Mr. Toothman.  Firms write off half or more of the paper debt, amounts in the hundreds of thousands or millions in the right circumstances.

You can also put strings on your payments, with or without a discount.  Is the lawyer sitting on your file or dragging his feet?  John Toothman confirmed that “You’d be amazed how many excuses seem to disappear when there’s a check dangling.  Major transactions or case settlements close in days or hours if a lawyer wants the fee badly enough.”

Law firms have to calculate annual bonuses sometime and most of them do it at the end of the calendar year.  There are some that even extend the year by a few weeks or longer to give themselves more time to collect, but then they’re just robbing from next year’s take.  And some firms may try to do this quarterly – so they don’t have to wait a whole year.  But sooner or later, one period’s got to close and the next one’s got to start – figure out when the firm closes the bonus books and that’s your deadline.  That’s always going to be an opportunity for the client to leverage a discount or other concession.

Devil's Advocate® has decades of experience consulting with clients and lawyers about all types of legal business issues.  And, before you agree to pay off a suspiciously large fee, check with us: We do legal bill reviews, which is another way to reduce unreasonable legal bills or defend yourself in a fee dispute.  Other services include matter monitoring, helping clients to draft fair fee agreements, and selecting a reasonable firm or replacing a bad one.

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Since 1993, Devil’s Advocate LLC has provided cost-effective legal fee management and litigation consulting services to hundreds of clients, law firms, government agencies, and individuals around the United States and internationally.  Our services include legal bill reviews, expert testimony, second opinions on litigation issues, litigation monitoring, case post-mortems, legal ethics analysis and opinions, legal malpractice analysis and opinions, law firm selection, legal fee agreement drafting and evaluation, evaluation and testing of legal fee management software, design and analysis of alternative legal fee arrangements, and more.

John Toothman, the founder of Devil’s Advocate, is an experienced trial lawyer and author of dozens of legal publications.  With more than 30 years of experience, John graduated from Harvard Law School, was a trial attorney at the US Department of Justice, and has been a partner in Washington, DC, area law firms.  John is the author of Trial Practice Checklists 2d (with Douglas Danner) and Legal Fees: Law & Management (with Professor William Ross).

Call us at 703-684-6996 or visit our website: http://www.DevilsAdvocate.com