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Good day everyone,

I am wondering if there has been a consensus regarding how to handle late fees on accounts that become past due in your forensic practice?  

Over the last several months, really since the government shutdown, I have had an increasingly difficult time collecting on late accounts related to forensic cases as well as life care plans.  Generally, I tend to work with law practices that tell me they need more time and offer payment plans, if requested prior to the case becoming past due.

The problem lately has been that attorneys have just ignored my invoices until they become late.  Specifically, I have one attorney now who has been four months late in paying their invoice.  There was a retainer fee in place, but the amount was nominal in relation to the total amount invoiced, and they sent one partial payment after the invoice was already 30 days past due.  Now that the same law office is asking that I waive all late fees because they state their client (the evaluee) cannot afford the fees (I charge 12% simple interest on late invoices without compounding the interest to the principal).  

This late fee policy was clearly spelled out in the retainer agreement the attorney signed prior to my work on the case.  I attempted several times to reach the attorney by phone, email, and through the invoicing system (FreshBooks) without any response from anyone in their office.  On their one late partial payment, there was no note asking for a payment plan or any communication at all on how they intended to pay the rest of the invoice.  In fact, I reached out via email and phone, checking in on the attorney to make sure he was ok and to tell him to contact me to discuss the invoice.  I would have been ok with the payment plan had he responded at all.

Late fees are not meant to be punitive to the Evaluee, but rather to the attorney who failed to pay as agreed upon in the retainer agreement.

If anyone has any experience or would like to share how they handle these situations and/or what their late fee policies are, it would be greatly appreciated. 

Many thanks,

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Sara Statz
sara.statz@gmail.com
Middleton, ID, United States
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Sara,

I came here to say that if your retainer fee is "nominal" in relation to the total amount invoiced, that you need to get a larger retainer. I'm glad Katherine beat me to it.

If you struggle(d) to set a reasonable retainer, here's what I did: After a while, I had a pretty good guestimate of how much time it generally took me to perform the work. So, I set my retainer at about half of that.

Also, a little bit of insight: I learned years ago, that attorneys and/or insurance adjusters do not like large invoices. It doesn't matter that they pay the same amount at the end of the day, they want smaller and more manageable expenses at any given time. In fact, some companies require second or third approvals for any invoices over a certain dollar amount. Katherine made the suggestion about interim billing. That's certainly one way to handle it. I've done that. It's in my fee schedule that I reserve the right to do it, but I don't usually because my retainer is high enough that I don't fear having giant final invoices. The only time I've done interim billing is when I have a client specifically ask for it and it's usually related to that first part (Whoever's paying the bill doesn't like large invoices).

Back to your original question of whether it is "industry standard" to charge late fees. I state in my fee schedule that I reserve the right to impose late fees, but I have only actually implemented it once since 2019. I try to be understanding with the delays, particularly when I'm working on behalf of the defense. I've worked directly with insurance adjusters and trust me when I say that some of them will put off issuing payment as long as humanly possible.

One last bit of advice: if you're receiving push back because their client (the evaluee) cannot afford the fees, regardless of whether we're talking about late fees, I would strongly urge you to make sure you're all on the same page in terms of budget when you take on a case. Last year, I accepted a case from an attorney, but all expert fees were being paid directly by their client. Before I even accepted the case, I made sure that they understood my fees, and we agreed on a budget. I promised to stay within that budget if it was within my power and if not, to let them know before I exceeded it.

Best of luck, sometimes these business practices are a learning process.