Tips for Expert Witnesses: Playing the Game of Billing & Collection
As an expert witness, billing for your services and receiving payment can sometimes be a difficult and drawn out situation. Horror stories that are the norm in the industry have ranged from extremely long payment wait times and non-payment of invoices to ugly disputes over the scope of work and billing discrepancies. You can often minimize payment problems by developing clear billing policies and procedures for your practice. This is business after all and nothing is more important than putting your terms and conditions down on paper. If clearly written, it can only serve to protect you down the road.
Solidifying Your Contract
A signed contact with your client is always a must prior to commencement of work. It should spell out your hourly fees and costs broken down into areas such as case review, research and consultation (meetings, phone conferences, review of documents, research, site/product inspections, written or verbal reports), travel time and appearances for deposition, arbitrations and court testimony. Higher hourly rates may apply for testimony, however some jurisdictions maintain rules regarding billing for deposition and trial testimony and as an expert, you should be aware of these rules.
Many attorneys select experts based on experience and cost which can be a sensitive issue. Pricing services can make an expert more or less attractive to an attorney who is considering retention of an expert. Generally, most attorneys view experts who have higher hourly rates than their peers as being more experienced and important. However, to stay competitive, you could charge a lower rate for travel or offer travel breaks on a case-by-case basis.
The following are some general terms to consider for your Fee Schedule/Client Contract:
Do you require a retainer? Is the retainer refundable or non-refundable? Is the retainer applied to a first or last invoice? Will the retainer need to be replenished? If so, under what circumstances?
What costs are anticipated for the assignment? Do you require that your expenses are reimbursed “at cost” or at cost plus a markup?
If you perform IMEs, what are your terms regarding cancellation? Do you require cancellation fees?
Regarding payment, do you require payment within a particular time period? If payment is not received, what will happen? Will you cease work on an assignment until all outstanding balances are paid?
Is it agreed upon that an invoice is acceptable if no challenge is made to invoice entries within a particular time period? The last thing you would want is for your client to come back to you and dispute an item on your invoice after the case has concluded.
On The Road To Getting Paid
As you prepare to submit an invoice to an attorney client for services, the most important point to keep in mind is that the attorney must be able to explain the invoice to his/her client and justify the bill. Good communication between expert and attorney throughout an assignment can eliminate confusion and lead to a clear definition of scope of work. An attorney, and his/her client, will usually not pay for work they did not request or for work which appears unnecessary. You should explain why certain activities are required and obtain attorney authorization to complete the work before it is actually performed.
An invoice should include the day services were performed, a brief description of the services, and the amount of time spent on the task. Always reference the case in which you are billing for as well as your client’s case number. Also include your Federal Tax ID number along with any payment terms you require. Make it easy for the recipient to see amount owed and where to send payment. After submitting an invoice, it is good practice to place a follow-up call to the attorney or his office to ensure that the invoice was received.
Invoices should be submitted at least monthly during an active case and immediately upon notification that a case has been resolved. Consistent monthly billings will even out payment and collection cycles and will avoid a “sticker shock” situation where the attorney receives one large bill at the end of an assignment. Invoices with smaller dollar amounts usually receive less scrutiny and are easier for the attorney to digest as well as for them to explain to their client.
Block billings should be avoided. Don’t expect an attorney to pay a bill that says simply, “For professional services rendered: $2,000.00.” Another unattractive billing practice is “Opening the File” or similar administrative fees charged where no work has been completed. Experts should consider billing for work completed, costs incurred during an assignment, and a retainer fee. Non-refundable retainers are unattractive to attorneys. Instead, you should consider requiring that a portion of a retainer be non-refundable in order to cover a situation where a case settles shortly after you are designated, with the balance of the retainer refunded upon conclusion of the assignment.
It is and has always been the standard in the industry to receive invoice payments in the form of a check. While that can continue to be the main form of payment, you could also consider accepting credit cards. This alternate method of payment can serve you well in certain situations, for example, when a client does not have enough time to overnight a retainer to you on an urgent case. It will also give your clients an alternate form of payment and could reduce the possibility of a long collection process down the road.
Since credit cards will unlikely be your main form of receiving payments, consider the convenience of an online payment tool such as PayPal. PayPal facilitates secure credit card transactions online and is simple to use. To register for an account, you are required to have an active email address. There are no monthly fees in maintaining your account, however, PayPal charges a fee based on the percentage of payment received. For more information about this service, please visit www.paypal.com.
Collection of unpaid fees should be completed on a regular schedule, beginning with telephone, fax and email correspondences followed by more formal methods such as letters. You should consider requiring payment of unpaid invoices prior to case milestones, such as deposition or trial testimony. This practice will not only give you leverage with your client but will also minimize the opposing counsel’s questioning of your credibility on the witness stand.
It is widely known that defense attorneys who work for insurance companies take the longest to pay. This is primarily because your invoice would first need to make it to the attorney, then forwarded to the insurance carrier who would forward it to their accounting department for payment. In some cases, the insurance carrier could be on the other side of the globe. If you find that phone call after phone call with the attorney does not yield results on payment status, ask for his permission to contact the insurance company directly. Some attorneys may allow this so they no longer have to play messenger. It would enable you to get a better idea on the status of payment directly from the payer instead of playing a big game of phone tag with the attorney who has no control over how soon you can get paid.
If you are ultimately faced with non-response to collection efforts and non-payment, you can either take your client to small claims court or write the invoice off. Obviously, if it is a small invoice, the latter would be a wiser solution. Not all accounts can be resolved in small claims court but you will find that some attorneys may finally cough up payment at this point to avoid a trip to the courthouse. For the ones that still do not respond, be prepared to gather all evidence of your work on the case and defend your invoice in court as it would increase your chances of winning your case. Regardless of the outcome, you would have learned from the experience.
One final tip to consider — if you have never worked with an attorney before, do your homework. Look him/her up on Martindale Hubble (www.martindale.com) or through your state’s bar association (www.calbar.org for California). If the attorney has no record on Martindale Hubble or has disciplinary problems through the State Bar, proceed at your own risk with a hefty up-front retainer or pass on the case altogether.
Calif-legal.com
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