The Gratuity Scale = Motivation to Pay
The GRATUITY SCALE below shows the normal level of gratuity in any service type industry. In relation to Law Firm services this scale shows how gratitude relates to a client’s motivation to pay. At first their gratitude rises to a crescendo and then plummets. This is the same pattern many clients have when it comes to paying your invoice.
A prospective client comes running into your firm screaming "Please! I need your right now! IMMEDIATELY! If you don’t help me I will lose everything!”
So, what do you do? You drop what you’re doing, put other clients on hold, clear your schedule, and invest your time into the person who desperately needs your help.You take on this prospective client, file all the necessary documents in court (on a rush basis mind you) and start prepping for trial.
During the preparation stage you advise your client that the trial may not be easy, but you will do your utmost to help. Your client is elated. "Thank you so much for taking on my case” he says, "I had no idea how much is involved with pursuing a Suit”.
Trial comes. You have spent hours preparing. Any roadblocks encountered are easily avoidable due to your diligence before trial.
You eventually navigate a successful result for your client and he walks away with a win. Walking out of the courthouse your client is elated. He can’t stop thanking you. "I cannot thank you enough! You saved my business”.
A few days pass. You are finally able to respond to phone calls you may have neglected during trial. You deliver your invoice to your client later that week, or the week following the trial.
A week passes after the initial invoice date. You still have not received payment from the invoice you delivered to your client a week before. "Why has he not paid yet” you wonder. "If someone had gotten me the same results I had gotten him I would have paid within the hour”!
You decide to give him a call to discuss. He may have reasons for getting around to repayment, but the sinking feeling you have is when he starts bragging about how good he was on the stand. "Did you see me in there? I was a champion on the stand. That wasn’t so hard” he boasts.
Throughout the next 30 to 45 days you send reminder emails and letters (taking up more of your valuable time).
After 45 to 60 days you contact the client again and ask if there is a problem with the invoice you rendered. Your client responds to your call by saying, "Yeah, yeah, yeah, I will get to it when I get to it”. Your client, in hindsight, makes some comment about how easy the process was. You remind him that the course of the action took you numerous hours over the course of several months. He comments by saying, "The trial was a breeze. I could have done it myself.
The phone call ends and still no payment is received for another week. You respond by sending a final letter to him outlining that you have no other choice but to send his invoice for collection to a collection agency. The client receives the letter and says to his friends and family, "Who the hell does he think he is? I did all the work in there and now he is rushing me? It wasn’t like he spent much time in trial”.
Now, you as a professional have two options: you can either let the situation affect you and absorb more of your valuable working hours. Or you can send the invoice to IRS. Our trained professionals are used to handling these sorts of ‘sticky’ situations.
And what is most important, you can get back to what is most important – billable hours. Don’t let these delinquent’s waste any more of your valuable time. This is the most common effect when dealing with overdue Law Firm accounts receivables.
The Gratuity Scale is a great way of showing how an average consumers mind changes over time.
The importance with sending an account for collection is sending it when you immediately know it will not be paid. We suggest providing a final letter to the client suggesting that you have exhausted all avenues in dealing with the matter amicably and will provide 7 days before sending the account to professionals.
If your account still has not been responded to it is always important to list the account for collection immediately after the provided time has been neglected. Waiting another two to three months before sending it to an agency will show the delinquent client that you are not that serious about the collection of your account, and the level of gratuity will have decreased dramatically again.