Elite Law Firms Increasingly Suing Clients to Collect Fees

, New York Law Journal

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In an era when demand for legal services is softening, the country's largest firms are increasingly going to courts and arbitration against their former clients to collect fees in what consultants say is the "new normal."

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What's being said

  • Eli Uncyk, Esq.

    Eli Uncyk said: My small firm represented large law firms in fee collections. I found that, rather than just considering the matter of money, the firm looked at the good faith of the non-paying client. Where repeat business was a possibility, my offer to facilitate a resolution in a discussion was valuable. Then there were the occasions when a partner in the firm wanted the opportunity to testify about his and his firm‘s credentials generally (to establish the bases for hourly charges) and to discuss the former client‘s more difficult or embarrassing problems which resulted in the disputed fees and the former client‘s dissatisfaction with the outcome. We also found that the firm itself didn‘t want to be its own attorney (even if different departments handled collection arbitration or suits). On occasion, the firm‘s comptroller would be the named plaintiff, as assignee (with full disclosure in the Complaint) so the firm‘s name would not appear in a caption as a plaintiff or defendant. Where counterclaims were asserted (whether as affirmative claims or as offsets or defenses), the firm‘s insurers generally let us handle that part, rather than bring in insurance counsel and spend more on the learning process for the case.

  • E. Portman

    I have been representing other firms for their fee claims for many years. Most firms get past the emotional threshold of putting their receivable into a claim when they remember that we, as attorneys, are engaged in a "for profit" enterprise and have our own bills to pay.

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