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Overdue Client Accounts

Before or within a reasonable time after beginning to represent a client, lawyers and paralegals should provide the client with as much information about fees, disbursements, and interest in writing as is reasonably practical in the circumstances. This includes the basis upon which fees will be determined [commentary to rule 3.6-1[3] of the lawyers’ Rules of Professional Conduct (lawyers’ Rules; section 6(a) of Guideline 13: Fees of the Paralegal Professional Conduct Guidelines].

Despite confirming information about fees, disbursements and interest in writing, like many business people, lawyers and paralegals often have difficulties securing prompt payment of their accounts by their clients.  In order to improve their success in collecting on overdue client accounts, lawyers and paralegals may wish to consider implementing a collection policy that addresses the following:

  • when an account will be considered overdue
  • whether interest will be charged on overdue accounts
  • the contact method and schedule for following up with clients about overdue accounts
  • the staff member responsible for undertaking the collection tasks
  • acceptable methods of payment or payment plans, and
  • the steps to be taken if a client refuses to or cannot pay.

Regardless of whether a collection policy is in place, lawyers and paralegals who delegate collection of overdue client accounts to their staff must supervise such work in accordance with rule 6.1-1 of the Rules or subrule 8.01(3) of the Paralegal Rules of Conduct and By-Law 7.1.

Additional Resources:

Financial Management Practice Management Guideline

Interest on an Overdue Client Account  

Using a Collection Agent for Overdue Client Accounts  

Terms or Concepts Explained