Law firms are getting more aggressive about suing clients for unpaid legal bills. As the New York Law Journal says, what used to be “unseemly” may become routine. But bringing a breach of contract action against a client for unpaid fees is a very tricky business: first, you have to get out of the attorney-client relationship, and then you have to invoke your (hopefully) enforceable fee agreement.
You can’t sue a current client for fees. This would create a conflict of interest that impedes your ability to preserve the duty of loyalty to your client.
So, before you sue a client to recover earned fees for services rendered, you have to end the attorney-client relationship, either by client consent to withdrawal or by a motion to withdraw. See CCP §284. Note that if it’s a domestic relations matter, you may file a notice of withdrawal of attorney of record after the finalization of the family law judgment without your client’s consent. See CCP §285.1.
Once you’ve terminated the attorney-client relationship, you can sue your former client for breach of your agreement for services. The agreement, which is usually in writing (Bus & P C §§6147-6148), is the underlying contract for your suit: an attorney may sue a client for breach of an express agreement to recover the outstanding balance owed under the terms of the agreement.
Don’t forget that you have to give the client written notice of his or her right to arbitration under Bus & P C §§6200-6206 before or at the time of service of a summons or claim against the client. Bus & P C §6201.
Once you’ve got a judgment in hand, you can seek to enforce it against the client’s nonexempt property, including by asserting a judgment lien. See generally CCP §§680.010-724.260.
Remember that there are risks to taking the extreme measure of suing your former client for fees. In fact, some malpractice insurers discourage doing so because it may raise malpractice claims against you. If you decide to go this route, be sure to carefully consider alternatives first.
For everything you need to know about how to get paid after being stiffed by a client, turn to CEB’s California Client Communications Manual: Sample Letters and Forms, chap 9. Not sure about the impact of the debt collection statutory requirements? Check out CEB’s Debt Collection Practice in California, chap 2. CEB also has a great program on these issues, including the ethical considerations: Collecting Unpaid Attorney’s Fees: Promise and Pitfalls. But before you get into these issues with a client, check out CEB’s program Making Sure You Get Paid: Accounts Receivable Management, available for FREE!
Found this blog post interesting? Check out our related post Liening on Your Client to Get Paid.
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