Resource Library / SOP 03 · Collections
Money · Full guide
Collections
Attorneys are reluctant collectors, usually out of decency, and the delay makes the eventual conversation harder. This guide replaces the judgment call with a graduated sequence that protects the client relationship while the balance is still collectable.
Process owner
Admin, escalating to owner
Reviewed by
Firm owner
Applies to
Any invoice past due
Review cycle
Every 12 months
Section one
Why a sequence beats a judgment call
Almost every attorney has an unpaid balance they have been meaning to address for four months. The reason is not laziness. It is that each individual day, asking feels awkward, and postponing costs nothing visible. Multiply that across a year and a small firm is carrying a meaningful share of its revenue in balances that get harder to collect every week.
Two facts make this worse than it looks. Money owed becomes less collectable with age, steeply. And a client who has stopped paying has usually also stopped talking, which means the silence the firm is respecting is often the sign that something needs addressing rather than waiting.
A written sequence removes the daily decision. Nobody has to judge whether today is the day; the calendar decides, an administrator sends the first two contacts, and the attorney is only involved when the matter genuinely needs them. Most balances resolve before the attorney is ever drawn in.
It also protects the relationship. Because the sequence is the same for everybody, a follow-up is not a signal of distrust. It is simply what the firm does on day fifteen.
The best collections work happens earlier
A firm with a predictable billing calendar, clear narratives, and an expectations conversation at engagement will have a fraction of the collections work of a firm without them. Read client billing first; this guide handles what is left over.
Section two
Purpose and scope
Purpose
Recover outstanding balances promptly and professionally through a documented, graduated sequence, with every contact recorded, while preserving the client relationship and observing the firm's professional obligations.
In scope
Follow-up on invoices past their due date, escalation between stages, payment plan arrangements, and the point at which an attorney must take over. Applies to all fee arrangements.
Out of scope
Fee dispute resolution and fee arbitration, which follow your jurisdiction's process. Withdrawal from representation, which is an attorney decision governed by conduct rules and, where a matter is pending, by the court. Referral to a collection agency or suit on a fee, both of which require owner approval and careful consideration of the professional consequences.
Section three
The graduated sequence
Five stages, each with a trigger, an owner, and language prepared in advance. Day counts below are an example; set your own and apply them consistently.
01
Admin
Day 15 — courtesy reminder
A short, friendly written reminder with the invoice attached again. Assume it was overlooked, because usually it was: "I wanted to make sure the invoice from the 1st reached you. A copy is attached. Let me know if you have any questions about it." No mention of consequences. A large share of balances clear at this stage.
02
Admin
Day 30 — second written notice
A firmer written notice restating the amount, the original due date, the payment methods available, and a request for payment or a response by a specific date. Still professional, still no threat. Offer a route: "If there is a reason payment has not been possible, please tell me and we will find a workable arrangement."
03
Admin
Day 45 — telephone call from a named person
A person calls. This is the stage that resolves most of what the letters did not, because it converts a document into a conversation and usually surfaces the actual reason: a dispute about a line item, a cash flow problem, a bill sent to the wrong address, or a client waiting for something they think the firm owes them. Log the call and the outcome the same day.
04
Firm owner
Day 60 — escalation to the attorney
The responsible attorney takes over. The purpose is a direct conversation about the balance and a decision: a payment plan with stated amounts and dates in writing, a review of the disputed items, or a frank discussion of whether the engagement can continue. This is a client conversation, not a demand.
05
Firm owner
Day 90 — documented decision on next steps
The owner decides and records what happens: continue on a plan, write off some or all of the balance, pause further work where the engagement and the rules permit, or take a step outside the ordinary course. Nothing beyond a payment plan happens without owner approval and, where a matter is pending, without attorney judgment on the professional obligations involved.
Section four
Lines the procedure does not cross
A collections process inside a law firm operates under constraints an ordinary business does not have. These are stated as firm policy so that no one has to work out the boundary under pressure.
The file is not leverage
A client's file and property are not withheld to compel payment. Retention and return of client property is governed by your jurisdiction's rules, and the answer is not "when they pay."
Necessary work is not conditioned on payment
Deadlines are met and required steps are taken while representation continues. Where nonpayment makes continued representation untenable, that is a withdrawal question decided by an attorney under the applicable rules and, if the matter is pending, by the court.
The balance is discussed only with the client
Not with a spouse, an employer, a family member who has been calling, or anyone else, absent the client's informed direction. Confidentiality does not relax because money is owed.
No threats, no pressure tactics
No implied consequences the firm would not actually pursue, no contact at unreasonable hours, no repeated calling. The tone at every stage stays the tone the firm would use with a paying client.
Suit on a fee is a last resort with real costs
Suing a former client for fees invites a counterclaim, consumes attorney time, is a matter of public record, and often costs more than the balance. It is sometimes right. It is never routine, and it belongs to the owner alone.
Section five
Payment plans that actually work
A plan is better than a balance that ages. Four rules make the difference between a plan and a postponement.
Put it in writing, always. A short letter or email stating the total, the instalment amount, the dates, the method, and what happens if an instalment is missed. Verbal arrangements are remembered differently by each side within two months.
Make the first payment immediate. A plan whose first instalment is thirty days away is a plan with no demonstrated commitment. Something today, however small, changes the dynamic.
Keep the schedule short and the instalments real. Three to six months of amounts the client has actually said they can manage beats twelve months of a number that sounded acceptable on the phone. Ask what they can pay rather than proposing what you would like.
Automate the collection where you can, and put a review date on it. Standing card or bank instructions remove the monthly decision. A note in the calendar to check whether the plan is being honoured means a lapsed plan is caught in week two rather than month four.
Ask the question that resolves things
"Is there something about the bill you disagree with?" is the most useful sentence in collections. A surprising share of non-payment is an unraised objection to one line item, and it is far cheaper to adjust that item than to pursue the whole balance.
Section six
Records and where they live
Every contact is recorded, on the matter, with date and outcome. A collections file reconstructed from memory is worth nothing.
Aged receivables report
Produced monthly from billing; drives which accounts enter the sequence
Contact log
Date, stage, method, person, and outcome for every contact made
Copies of all notices sent
Filed to the matter with the delivery date recorded
Call notes
Written the same day, including what the client said and any objection raised
Payment plan agreement
The written terms plus the client's acknowledgment
Adjustments and write-offs
The amount, the reason, and the approval, recorded against the matter
Owner decisions
What was decided at day 90 and on whose authority
Section seven
Where firms get this wrong
Five patterns. Each one is a version of the same avoidance.
Waiting for the awkwardness to pass
It does not pass, and the balance ages. The sequence exists precisely so that no one has to feel brave on a particular Tuesday.
The attorney does all the chasing
Stages one and two are administrative and should never reach the attorney's desk. Firms that route everything to the owner do less of it, later.
No record of contact
Three calls were made, or were they two? Without a log the firm cannot escalate credibly and cannot tell whether the process is being followed.
Plans agreed on the phone
No writing, no first payment, no review date. Six weeks later both sides remember it differently and nothing has been paid.
Objections never surfaced
The client had a problem with one entry and no one asked. The firm pursues the full balance for months over a dispute that a five-minute conversation would have settled.
Section eight
Adapting it to your firm
Five decisions before this becomes your procedure.
Set your day counts. The 15/30/45/60/90 pattern above is a common starting point. Shorter is fine. What matters is that the intervals are fixed and the same for everyone.
Write your five pieces of language. Draft the reminder, the second notice, the call script, and the two escalation letters once. Prepared language is the difference between a stage that happens and a stage that gets postponed.
Name the administrator and the escalation point. Who runs stages one to three, and which attorney takes stage four for each matter type.
Decide your write-off authority. What amount an administrator may adjust without approval, and what requires the owner. A small threshold prevents tiny balances consuming hours of attention.
Read your own rules on withdrawal and client property. Both are jurisdictional, both are frequently misunderstood, and both come up in collections. Check your own authority before you need it.
One more thing worth measuring: the average age of your receivables, reviewed monthly. It is the single number that tells you whether this process is working, and most small firms have never calculated it.
Next
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This guide is educational material published free of charge by the Law Firm Innovation Foundation, a 501(c)(3) nonprofit, EIN 42-2464496. It is not legal, ethical, tax, or accounting advice and does not create an attorney-client relationship. Professional conduct rules, trust accounting requirements, limitations periods, and procedural rules vary by jurisdiction; every reader is responsible for conforming their own practice to the authority that governs it. If you find an error or something incomplete for your jurisdiction, tell us and we will revise the page.