{"id":102199,"date":"2025-01-29T17:51:26","date_gmt":"2025-01-30T01:51:26","guid":{"rendered":"https:\/\/xira.com\/p\/2025\/01\/29\/never-take-a-case-billed-out-on-an-hourly-basis-without-a-retainer-big-enough-to-easily-cover-a-months-fees\/"},"modified":"2025-01-29T17:51:26","modified_gmt":"2025-01-30T01:51:26","slug":"never-take-a-case-billed-out-on-an-hourly-basis-without-a-retainer-big-enough-to-easily-cover-a-months-fees","status":"publish","type":"post","link":"https:\/\/xira.com\/p\/2025\/01\/29\/never-take-a-case-billed-out-on-an-hourly-basis-without-a-retainer-big-enough-to-easily-cover-a-months-fees\/","title":{"rendered":"Never Take A Case Billed Out On An Hourly Basis Without A Retainer Big Enough To Easily Cover A Month\u2019s Fees"},"content":{"rendered":"
\"\"
<\/figcaption><\/figure>\n

If you\u2019re in Biglaw, unless you\u2019re representing Donald Trump or Rudy Giuliani<\/a>, you generally don\u2019t have to worry too much about getting paid. Huge corporate clients don\u2019t run away from their legal bills.<\/p>\n

It\u2019s a different story at a small or midsize law firm. Longtime readers might recall the story of how I got stiffed out of $40,000<\/a> after my first trial \u2014 hilarious, given that I wasn\u2019t an equity partner and I could easily point out how it was 100 percent the fault of someone who was.<\/p>\n

When you\u2019re running your own shop, though, or are (understandably) more worried than I was about getting into trouble, you can\u2019t take a $40k hit. Fortunately there is a reasonable solution to this problem, and it is easier to implement than you might think.<\/p>\n

There is an almost infinite supply of potential clients out there who want to sue someone and mistakenly think a few thousand bucks is enough to get somewhere with that. A large number of these folks cannot be convinced that litigation is actually a bad idea \u2014 I\u2019ve lost count of how many people I\u2019ve failed to talk out of hiring a lawyer \u2014 and they almost throw their little war chest in your direction at the outset.<\/p>\n

Now, that\u2019s fine, it\u2019s a free country. Those who have more money than sense may certainly fund a donation to their local law firm should that be their desire. The big problem for the lawyer, however, doesn\u2019t take long to surface.<\/p>\n

Your relatively small bills for the first couple months might get paid. You may even be holding a large enough retainer deposit to feel comfortable with the first few monthly bills going unpaid. But at some point the other side is going to hire one of those firms whose sole strategy is to spend the other side into the dirt, or someone\u2019s going to file a big dispositive motion, or one of the million other things that can turn a case into your whole life for a month is going to take place. When that happens, if you don\u2019t have a tremendous retainer deposit comfortably squirreled away in your trust account, you\u2019re screwed.<\/p>\n

Ethical rules about when and how you can legitimately withdraw from a case vary widely by jurisdiction, of course. Almost everywhere nonpayment is a good enough justification for an attorney to hit the bricks. Yet, you can\u2019t just abandon a client on the intuition that they are probably not going to pay the current month\u2019s humongous bill when it eventually gets sent out, even if you\u2019ve lived through that scenario again and again.<\/p>\n

The financial management of the aforementioned firm where I failed to collect on $40,000 was not what I would describe as \u201cresponsible.\u201d When I was new there, I can\u2019t tell you how many times I participated in cases in which we had to harangue former clients over unpaid legal bills. We were almost never made fully whole, tons of firm resources that could have been better applied elsewhere were dedicated to collections, and it\u2019s not exactly a marketing win to be seen seeking judgments against your own former clients.<\/p>\n

As soon as I got enough power at that place to be managing my own caseload, I tripled the minimum retainer deposit I\u2019d accept in order to open a new file. I didn\u2019t bill against it, just held it to cover future unpaid balances, and the moment monthly bills were going unpaid reminder letters went out. A huge weight fell from my shoulders. I never had to deal with this problem again.<\/p>\n

Sure, if you turn away potential clients who only have a few thousands dollars to spend on what looks to you like an ultimately expensive case, you are leaving a lot of money on the cutting room floor. That\u2019s a good place for it though. It will never be worth the extra time and expense of all the free work you\u2019re going to put into these cases, and you\u2019re not really helping underrepresented indigent people by spending down their meager savings only to have to leave them in the lurch when they\u2019ve run dry.<\/p>\n

Government lawyers, contingency litigators, in-house counsels: my congratulations on never having to deal with this. But if you\u2019re the kind of lawyer who bills by the hour and handles cases that can get very expensive very fast, trust me on this. Should you have any doubts whatsoever about a potential client\u2019s ability to pay, think of what the bill would be for the most wildly expensive month you can conceive of, then at least double that amount. The resulting figure is your minimum retainer deposit.<\/p>\n

.<\/p>\n

\n

Jonathan Wolf is a civil litigator and author of\u00a0<\/strong><\/em>Your Debt-Free JD<\/strong><\/em><\/a>\u00a0(affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn\u2019t want to share the credit anyway. He can be reached at\u00a0<\/strong><\/em>jon_wolf@hotmail.com<\/em><\/strong><\/a>.<\/em><\/strong><\/p>\n

The post Never Take A Case Billed Out On An Hourly Basis Without A Retainer Big Enough To Easily Cover A Month\u2019s Fees<\/a> appeared first on Above the Law<\/a>.<\/p>\n

\"\"
<\/figcaption><\/figure>\n

If you\u2019re in Biglaw, unless you\u2019re representing Donald Trump or Rudy Giuliani<\/a>, you generally don\u2019t have to worry too much about getting paid. Huge corporate clients don\u2019t run away from their legal bills.<\/p>\n

It\u2019s a different story at a small or midsize law firm. Longtime readers might recall the story of how I got stiffed out of $40,000<\/a> after my first trial \u2014 hilarious, given that I wasn\u2019t an equity partner and I could easily point out how it was 100 percent the fault of someone who was.<\/p>\n

When you\u2019re running your own shop, though, or are (understandably) more worried than I was about getting into trouble, you can\u2019t take a $40k hit. Fortunately there is a reasonable solution to this problem, and it is easier to implement than you might think.<\/p>\n

There is an almost infinite supply of potential clients out there who want to sue someone and mistakenly think a few thousand bucks is enough to get somewhere with that. A large number of these folks cannot be convinced that litigation is actually a bad idea \u2014 I\u2019ve lost count of how many people I\u2019ve failed to talk out of hiring a lawyer \u2014 and they almost throw their little war chest in your direction at the outset.<\/p>\n

Now, that\u2019s fine, it\u2019s a free country. Those who have more money than sense may certainly fund a donation to their local law firm should that be their desire. The big problem for the lawyer, however, doesn\u2019t take long to surface.<\/p>\n

Your relatively small bills for the first couple months might get paid. You may even be holding a large enough retainer deposit to feel comfortable with the first few monthly bills going unpaid. But at some point the other side is going to hire one of those firms whose sole strategy is to spend the other side into the dirt, or someone\u2019s going to file a big dispositive motion, or one of the million other things that can turn a case into your whole life for a month is going to take place. When that happens, if you don\u2019t have a tremendous retainer deposit comfortably squirreled away in your trust account, you\u2019re screwed.<\/p>\n

Ethical rules about when and how you can legitimately withdraw from a case vary widely by jurisdiction, of course. Almost everywhere nonpayment is a good enough justification for an attorney to hit the bricks. Yet, you can\u2019t just abandon a client on the intuition that they are probably not going to pay the current month\u2019s humongous bill when it eventually gets sent out, even if you\u2019ve lived through that scenario again and again.<\/p>\n

The financial management of the aforementioned firm where I failed to collect on $40,000 was not what I would describe as \u201cresponsible.\u201d When I was new there, I can\u2019t tell you how many times I participated in cases in which we had to harangue former clients over unpaid legal bills. We were almost never made fully whole, tons of firm resources that could have been better applied elsewhere were dedicated to collections, and it\u2019s not exactly a marketing win to be seen seeking judgments against your own former clients.<\/p>\n

As soon as I got enough power at that place to be managing my own caseload, I tripled the minimum retainer deposit I\u2019d accept in order to open a new file. I didn\u2019t bill against it, just held it to cover future unpaid balances, and the moment monthly bills were going unpaid reminder letters went out. A huge weight fell from my shoulders. I never had to deal with this problem again.<\/p>\n

Sure, if you turn away potential clients who only have a few thousands dollars to spend on what looks to you like an ultimately expensive case, you are leaving a lot of money on the cutting room floor. That\u2019s a good place for it though. It will never be worth the extra time and expense of all the free work you\u2019re going to put into these cases, and you\u2019re not really helping underrepresented indigent people by spending down their meager savings only to have to leave them in the lurch when they\u2019ve run dry.<\/p>\n

Government lawyers, contingency litigators, in-house counsels: my congratulations on never having to deal with this. But if you\u2019re the kind of lawyer who bills by the hour and handles cases that can get very expensive very fast, trust me on this. Should you have any doubts whatsoever about a potential client\u2019s ability to pay, think of what the bill would be for the most wildly expensive month you can conceive of, then at least double that amount. The resulting figure is your minimum retainer deposit.<\/p>\n

.<\/p>\n

\n

Jonathan Wolf is a civil litigator and author of\u00a0<\/strong><\/em>Your Debt-Free JD<\/strong><\/em><\/a>\u00a0(affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn\u2019t want to share the credit anyway. He can be reached at\u00a0<\/strong><\/em>[email\u00a0protected]<\/em><\/strong><\/a>.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re in Biglaw, unless you\u2019re representing Donald Trump or Rudy Giuliani, you generally don\u2019t have to worry too much about getting paid. Huge corporate clients don\u2019t run away from their legal bills. It\u2019s a different story at a small or midsize law firm. Longtime readers might recall the story of how I got stiffed […]<\/p>\n","protected":false},"author":3,"featured_media":102200,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16],"tags":[],"class_list":["post-102199","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-above_the_law"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/xira.com\/p\/wp-content\/uploads\/2025\/01\/agreement-business-cellphone-1154755-620x368-kMhGkU.jpeg?fit=620%2C368&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/102199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=102199"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/102199\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media\/102200"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=102199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=102199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=102199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}