How to chase unpaid fees in a law firm

To chase unpaid fees in a law firm, make sure the bill is no surprise, send it promptly, remind on a fixed schedule in the firm's name and not the fee earner's, and send every query, complaint and request for time to a person the same day. Fee debt in a small firm can sit unasked for when the fee earner who did the work is expected to chase it. An AI worker can do the asking. It never touches client account, and it does not answer a question about a bill.

Which rules govern chasing a solicitor's bill?

For firms in England and Wales, three sets of rules shape the job, and a fourth, for non-contentious work, sets the interest a firm may add to an unpaid bill. The SRA's Code of Conduct says clients receive the best possible information about how their matter will be priced, at the time of engagement and as the matter progresses, including the likely overall cost. It also says clients are told in writing, at engagement, of their right to complain about the firm's charges as well as its service. So a client who questions a bill is using a right the firm told them about.

The SRA Accounts Rules cover money the firm already holds. Money received for fees before a bill is delivered is client money. Where it will be used to pay the firm's costs, the rules require a bill of costs, or other written notification of the costs incurred, to be given before any of it is transferred, and the transfer must be for the specific sum in that bill. Every withdrawal from client account is authorised and supervised.

And the Solicitors Act 1974 says that, with limited exceptions, no action is brought to recover a solicitor's costs until one month after a bill, signed as the Act requires, has been delivered. What a firm does then is for its partners.

For non-contentious work, the Solicitors' (Non-Contentious Business) Remuneration Order 2009 lets a solicitor charge interest on the unpaid costs, with any paid disbursements and VAT. Unless the firm and the client have agreed otherwise, the interest runs from one month after the bill is delivered, at no more than the rate payable on judgment debts. Whether to charge it is, again, the partners' decision.

The job, step by step

1. At engagement: set the terms. The costs estimate, when bills will be raised, how long the client has to pay and any money on account are in the client care letter. The fee earner sets them.

2. During the matter: keep the estimate current. When recorded time approaches the estimate, the client hears before the bill, not from it.

3. Bill promptly. Time recorded and not billed is the debt nobody is chasing yet. A weekly list of matters with unbilled time past your limit goes to each fee earner.

4. Where money is held on account. The cashier, or whoever your procedures name, makes the transfer, not the fee earner, after the bill has gone to the client and for the sum on it.

5. Remind on a schedule. Send a note before the due date for larger bills, a reminder the day after, then reminders at intervals the partners have fixed, each with the bill attached and the ways to pay. They go from accounts, in wording approved once.

6. Read every reply. A promise to pay gets a date and a check on that date. A question about the bill goes to the fee earner. An expression of dissatisfaction goes into the firm's complaints procedure. A request for time goes to whoever can agree it.

7. Escalate with the history. When the reminders are spent, the partner sees one page: the bill, each reminder, each reply, anything promised.

Which steps can an AI worker take on?

The asking, the reminding and the record-keeping can go to an AI worker, checked here by the legal cashier or practice manager. Reading the ledger in your practice management or accounts system, it can list matters where time has passed your limit without a bill, and matters nearing their estimate, and send each fee earner theirs. It can send the reminders on your schedule, in your wording, from the accounts mailbox. It can read replies, send a copy bill when asked, record a promised date and check the ledger on that date. And it can give the cashier a weekly list: what was paid, what was promised, what has gone quiet, what is waiting on a fee earner. The role is described under invoice and payment chasing.

What waits for a person, and why

• Anything in client account. Transfers are governed by the Accounts Rules and are authorised and supervised within the firm. An AI worker has no access to client account and never moves money.

• The bill itself. What is charged, and any reduction, is the fee earner's and the supervising partner's.

• Queries and complaints. A client's right to complain about charges comes from the Code. The reply is the firm's, under its complaints procedure.

• Time to pay, interest, stopping work and recovery. The partners decide each of these.

• Phone calls, and clients you mark as hands-off. A bereaved client, or one whose matter is at a delicate point: the fee earner says who is not to be reminded.

A reminder says a bill is unpaid; it says nothing about the matter. The Code requires the affairs of current and former clients to be kept confidential, so reminders go only to the billing contact on the file, and their wording carries no detail of the work.

What to have ready before you start

A reminder schedule the partners have agreed, in days. Three or four approved wordings. A rule for who is hands-off and who may say so. A limit for unbilled time, and for how close to an estimate triggers a note to the fee earner. One mailbox that reminders go from and replies come back to. One partners' meeting can settle the lot. Our page for law firms covers the admin before the bill, from conflict searches and client care letters to ID evidence, and scaling a law firm without hiring makes the wider case.

For a law firm an AI worker would remind clients on your schedule and tell your cashier where each bill stands, and client account and every conversation about a bill would remain with your people. Are your fee earners also your credit controllers? Talk to our agent.