According to a recent article in the Financial Times, a lawyer will charge between £150- £400 per hour in the UK (at today’s date that is roughly $190 to $500), in the USA its closer to $100-$250 in rural areas and $200-$500 in the cities per hour. This means that a lawyer’s letter can cost you a fortune. A legal bill can look like this:
- Preliminary telephone conversation / email correspondence to discuss matter- 15 ninutes
- Consultation with client- 1 hour or part thereof
- [client sends the information]- consideration of email from client- 15 minutes
- Drafting and settling letter- 25 minutes
- Sending letter
- Various follow ups (this is an advantage of using a lawyer, but it comes at a cost- normally per attendance which start at 6 minute increments)
I’m of the view that lawyers are though essential when starting businesses, negotiating settlements and drawing up contracts. It is money well spent to get sound and thorough legal advice.
Many law and accounting firms put pressure on time-sheets and billing and set fee targets for employees- KPMG penalize employees I do understand though, their overheads are high (think: fancy offices, employees, support staff, entertainment- the list goes on.
When it comes to sending payment reminders, we’ve created a system that for the 1st step in collecting- sending a letter from our platform is a good move- especially at the rate we’re offering.
Statistics show that upon receipt of a demand letter, odds of collecting go up substantially.
When performing various due diligences of companies who are finding it difficult to collect, the aspects we suggest are vital to good collection rates are:
- making sure that the debts do not get old before you take action, the older the debt- the harder it is to collect
- keeping your client contact details up to date
- follow up
- keep file notes and records of all correspondence
Many companies are scared to send out formal letters in case it jeopardizes the relationship, but if you’re not getting paid- what kind of relationship is it? Sometimes the client just needs a push.”