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Though we believe you should work with A and B level clients, there are situations, especially in these difficult economic times, when good clients who have been able to pay promptly in the past (this applies to firms that bill hourly), begin to have financial difficulties. They may or may not tell you about these difficulties, but their behavior will tip you off.

Signs that your clients are suffering from the economic downturn

1. Existing clients want to negotiate your rates when they haven’t been a problem in the past.

2. Clients who typically have a lot of recurring work begin delaying the start of new projects or matters which were pending.

3. Good clients who didn’t normally delay payment begin to put it off or inquire about payment plans.

4. Clients begin asking about less expensive ways to handle matters and resolve disputes.

5. Normally responsive clients stop returning your phone calls and delaying or not showing up for meetings.

6. Long-standing clients whom you invite to events — don’t show up. This may also happen with referral sources who can no longer send work.

When you see signs such as these, it’s up to you to decide how to proceed when it comes to doing more work for these clients. Most attorneys are sympathetic to financial difficulties and are willing to accommodate the needs of these clients — especially if they feel the clients are being responsible and/or doing the right things to recover their financial stability.

We recommend creating a payment plan with distressed clients, even if it’s for small, affordable amounts at first, instead of extending them outright credit. Then observe their adherence, or lack thereof, to the plan. If they ignore it outright or fail to make the payments they’ve committed to, it’s not a good sign and you may need to reassess your commitment to continue working with them, after you communicate your concerns.


Atticus, Inc.

This article was written by an Atticus staff member.

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