EXPERT PAY DISCUSSION
You May Enjoy Your Work, But Don't Work for the Fun of It — Make Sure You Get Paid!
A common refrain among expert consultants is, "How do I make sure I get paid?"
The most important step in getting paid is planning to get paid. Being compensated for your work is too important to leave to chance, hope or optimistic confidence in the decency of your clients. It's business, for goodness' sake!
Do attorneys like to sign payment agreements? Usually not, particularly plaintiff attorneys. But you should ask yourself why. If the fees are agreed upon, and you are obligated to do the work just as the client is obligated to pay for the work, why should putting that agreement in writing be a problem?
My recommendation is to use an agreement that lays out simply and clearly, at a minimum, your rates for review, deposition, court appearance, travel time, and expenses, as well as your required retainer. I also recommend that you include a cancellation policy so you are not left holding an empty bag along with an empty waiting room or office when deposition or court appearances are postponed or cancelled. There should be signature lines for you and the client and dates for both signatures.
In your engagement agreement, you can also choose to spell out your expected payment schedule and other details. You can specify additional elements as venue in case of disagreement, although some experts do not wish to bring up the negative.
Your engagement agreement can be called a Fee Schedule, Litigation Consulting Agreement or Contract, or it can be part of an engagement letter (see examples of engagement agreements in The Expert Witness Marketing Book).
The most important points in getting paid are:
1) Do not begin reviewing files until you receive a retainer
for the estimated time of the review.
You will notice in my recommendations, (which are based upon many true stories with unhappy endings), the absence of the words, "having received a promise that counsel will have your check when you arrive to testify."
In working with our expert clients on their fees and collection procedures my policy is this: If you are assertive, you will rarely have to become aggressive. For most people, having to be aggressive is not a pleasant experience, especially when dealing with attorneys. Avoid this situation by handling the administrative, invoicing and collecting procedures of your practice in a business-like manner — that is, clearly, consistently, and as early as possible.
— Excerpted from The Expert
Witness Marketing Book
Editor's Note: The preceding article stressed the importance of securing a retainer for estimated review work and getting paid in advance for deposition and court testimony. In response to the article, Alan D. Westheimer, CPA, CFE, a respected Houston expert and associate, was kind enough to send me his slightly differing views. I thought our communications were pertinent enough to forward to our readers (with his permission), along with additional comments from me.
— If I took your advice about refusing to perform the variety
of tasks you mention without being paid first I would rapidly
go to the back of line amongst the qualified experts here.
All that is nice and a good goal to shoot for, but when push
comes to shove you have to do what it takes to get the job
done, especially for your good lawyer clients. In, perhaps,
10% of my cases, I take the position you advocate, usually
with the lower end of the cases on my plate. But for the
other 90%, I take my chances to support my lawyer clients
who, after all, are hiring me but not footing the bill (most
of the time). Their clients or some nameless insurance carrier
is paying. I have a few bad debts, but nothing like what
I had in traditional public accounting practice. In the end,
it’s a judgment call and no two cases are the same.
I wish you would soften your stance and give more flexible
advice. Best, Alan
ROSALIE: Hi, Alan! It's nice to hear from you.
Conversely, most of the attorneys who 1) don't pay at all, 2) pay months later, after exhausting collection efforts, 3) claim the expert took too long and reduce the fees, etc., are plaintiff. Plaintiff attorneys usually are footing the bill themselves, particularly if they are operating on contingency—running the risk of paying up front expenses that won't get reimbursed if the case loses.
I really appreciate your taking the time to write. I have heard you speak on expert practice management, and I respect your viewpoints. In fact, feel free to add any additional thoughts you have upon receiving this response from me. Regards, Rosalie
ALAN: Rosalie - Here’s
a bit more. Credit decisions are business decisions,
regardless of your public accounting specialty. My rules
are (1) I ask for a retainer to be applied against my
last invoice of about 20 hours work, ostensibly enough
to cover preparation for and testifying at trial. But,
I don’t ask for one from big public
companies, nor do I ask for one if I have a solid relationship
with an attorney and he asks me not to. I make these
decisions on a case-by-case basis and go with my gut.
(2) I try not to testify at either deposition or trial
if I have a bunch of money out, although I won’t
let a good lawyer buddy down. (3) What I tell the lawyer
is “Look, if I'm owed a bunch of money and
opposing counsel finds that out, he may use that to try
to impeach me by implying I am not being objective out
of fear I won’t get paid if I say something truthful,
but negative, about your client, so the best way to avoid
that is for me not to have any outstanding invoices at
the time. Some of your client’s problems are unavoidable.
This one is avoidable, so get me paid and we avoid it.” Sometimes
it works, sometimes it doesn't, but it is effective.
I hope this additional information helps you in instituting common-sense policies and procedures to ensure more effective and stress-free collection of your expert consulting fees.
Editor's Note: We received so many valuable and informative responses to this discussion that we wanted to share them with our readers. The responses are compiled (anonymously) below.
is interesting and of course since it is his business
that he's running, there are no wrong answers. But
my experience would not equate with his. No matter
the size of the firm, public or private, new or former
case clients; my rule is the retainer up front. I'll
take the case but no conclusions are offered before the
is always PayPal if the time frame doesn't allow overnight
of the check. He is right about insurance companies being
slow pay but they will cut a retainer, or at least that
is my experience. As
far as the individual that did $10,000 worth of work
and got stiffed; well da, I would hope that he is a better
expert than he appears to be a business man. Our differences
may well be in the type of cases and not necessarily
the type of client.
been testifying for twenty years. I don't charge or request
a retainer. I have never been "stiffed." In contrast
to all the lawyer jokes, I find counsel on either side to
be individuals of integrity. Demanding up front payment sets
a tone of mistrust. Think again.
Good advise to 'ALAN'
your accountant expert; but as a Forensic-Scientific Consultant,
in some 40 years of consulting, I have had only one court/collection
incident. You have to determine and know who to trust. Prior
to a deposition, by the opposition, I submit a copy of my
'Rate Schedule' to the attorney I am working with; and request
that the opposition calling for the deposition agree to payment
before I prepare and travel. In the Scientific field the
consultant can only 'tell it as it is', anything else will
lead to embarrassment in trial.
Thank you for sending
me this newsletter. I do have a question for Ms. Hamilton.
She refers to the "client" signing a fee or engagement
letter. Does this mean you have the person who is actually
paying your fees (the party and his/her insurer) or the party's
lawyer sign the engagement letter? It would be nice to have
the lawyer sign the engagement letter in addition to the
actual payer, but I doubt that many lawyers would agree to
pay your expert fees if the lawyer's client (the party) defaulted.
I'd appreciate your thoughts.
Since we don't have
a relationship with opposing counsel, I always bill in advance
for depos and ask that they have the check ready at the time
of the depo, with any extra time being billed. Most do, others
mail it later. Recently had a case where the deposing attorney
didn't have check at the depo and when we inquired about
it after a few weeks, they said they were splitting it with
3 other attorneys, but hadn't worked out the amounts. I contacted
our client and they got it paid via the insurance company.
As for our clients, when they're slow in paying and I have
a claim number or just know the insurance company paying
the bills, I will contact the claims adjuster directly. More
often than not they've not received my invoice and ask me
to fax it to them. Usually paid within a week after that.
I am writing as
a result of your correspondence with Alan Westheimer CPA
about payment in expert cases. I too am an expert — ... I
too run into situations with being paid, but I believe I
have solved this reasonably well.
Here is the bottom
line in providing expert service. If the client cannot afford or
is reluctant to pay a significant retainer against billable
hours, that client will not be able or will be reluctant
to pay your invoices. The retainer at least protects part
of your fees. I require $5,000 up front. No retainer, no
service. I have adjusted this down in rare circumstances
when it appeared that my initial involvement would be less
than usual, hours wise, but there is still a retainer to
cover my anticipated fees. I developed the contract and retainer
system after being screwed too many times by lawyers who
have the dollar as a bottom line and no concern for professional
honor. I used to operate on the honor system until it became
clear to me that I had the honor, and some lawyers had the "system." This
may not be the case in accounting matters, but I think it
applies to most other fields of practice. Even if you successfully
sue slick lawyers, they do not pay the judgment. Then you
get a FIFA from the court to place a lien against any property
they own, only to find that although they live very well,
they have nothing in their name. This is the voice of experience.
agree with your payment-in-advance stance. I do not
open my computer for a client who has not paid an initial
retainer in advance. Also, I will not send my final
report until all fees are paid. And of course, that
goes for depositions and trials too.
was first class. I have followed the rules outlined and had
many long waits but was only stiffed once very early in my
testifying career. Thanks for the information.
I have to agree
with Alan. I take on cases before I'm paid and they usually
increase my business. I have been burned recently by a lawyer
(Robert Boyd) in Clinton, MS for $5,400. He has refused to
pay for my services and will not respond to my certified
mail. Any suggestions on how to get reimbursed?
Your advice is very
Enjoyed the conversation
between you and Alan. It's good to know people in different
areas of expertise and hear what they do in certain situations.
I do get my retainer up front and also have a statement in
my Fee Agreement that states "All fees must be paid
before oral opinion, written opinion letter or any work product
is released" and under Court Related Services: "The
attorney/client's account must be current of all pre-trial
preparation, exhibit and examination charges prior to my
testimony at trial/deposition." Also, "I retain
the right to withdrawal from retention on any account that
is not paid in full." So far, this has worked for me.
The attorneys don't have a problem signing my fee agreement.
While cutting back
my hours devoted to Obstetrics and Gynecology, I have
pursued an active medical-legal practice since 1991. Now,
for the first time, I am having a serious collection problem
with the forensic practice. Our policy of requesting
additional retainer before report preparation, deposition,
trial or other out of town services has met with abysmal
failure. Yet I continue rendering the services and
watch my accounts receivable soar. I am eager to consider
any reasonable advice or suggestions. Thank you!
If one does not
obtain a retainer, they are not serious about their work.
The lawyers respect money but as anyone else they WANT THE
BEST for the money. One only needs to speak the truth and
there is no difference in plaintiff vs defense cases, federal
or state. Most of the doctors in my experience do not even
bother with actually reading the entire case and studying
the literature to provide a valid advice, and so they are
not hired or paid little if anything—HMO vs fee for
Very good exchange!
I have been doing expert work for longer than I care to think
about, and Alan's advice is exactly correct. I appreciate
receiving the newsletters. Thanks!
Great stream of
thoughts, Rosalie. Keep 'em coming ...
I believe you are
both right although my experience with lawyers has mostly
been hit and miss at best. They are (the lawyers) for the
most part in the business of extracting money from people.
This they do in any way they can and they use the system
to support their efforts. I for one will not budge without
a hefty retainer. Perhaps this is why I am not busier than
I should be, but when I am busy I am getting paid for it.
It's a tough call.
I agree. The hard
nosed pay me now or I quit is short sighted and not client
friendly. A more balanced and informed case by case approach
I also have a
clause in my standard retainer agreement that has the attorney
hiring me acknowledge that, even though my bills will be
sent to his/her client (or carrier) for payment, my contract
is with the law firm, which ultimately is responsible for
paying me regardless of what any third party may or may
not do. If the lawyer won't agree to this (rarely happens),
then I definitely will require an up-front retainer.
This is great. [We]
were just talking about this today. Thanks.
Rosalie; we have
not talked in a while but I am reading your letters with
a great deal of interest, especially about the getting paid
issues. I just concluded a plaintiff case that indeed had
a retainer deposit and the billings going forward to trial
were modest and well within the retained amount. Just before
discovery cut off I was notified by opposing counsel for
appearance on the last day of discovery. My counsel sort
of panicked and forwarded 5000 pages of documents for review
prior to the depo and I complied spending a lot of time to
get ready. The depo was very thorough and without having
read the material I could have looked rather ill prepared.
Opposing counsel paid for my time in depo but the 14 hours
of travel to and from his office was by agreement on record
to be paid by my guy. Two days after the depo the case settled
very favorably to our side. I presented a fair account of
all my time but at the end had to settle for 50 percent of
the outstanding amount. I was well covered by our engagement
agreement and could probably have prevailed in a dispute
but it did not seem to be worth the effort.
I enjoy your newsletter.
I am doing tons of expert work for attorneys.
One more point,
if your written contract with the hiring attorney is proper
and legal, and he/she has signed it, fear not!!! Find an
attorney that is willing to sue and do it!! I have, I am,
have won so far and expect to win again ... ps, when the
lousy atty loses, they pay atty fees too. ... (over 100 cases,
3 lousy, non-paying atty attempts).
Great info. After
having 213 cases in 35 states, I always get a retainer (based
upon how much there is to review). Sometimes if I go beyond
that retainer I will bill it out, for old and new clients.
I never let it get to be too much though (however much you
can afford to lose is a good rule of thumb). I always have
each client sign a Contract as well. Sometimes they won't
and I don't take the case. Sometimes they send a retainer
without the Contract and I do the work while awaiting the
signed Contract to be sent in, but will never go as far as
giving a depo or trial without a good Contract.
Stick by your guns
... your advice is right on. Alan may be a good speaker and
a nice guy, but ... you have to turn a profit, which I do
and did as a national partner with Laventhol & Horwath. "Go,
Most of the time I do not get retainers. I have not had collection
problems. Basically I rely on the attorney. My position has
always been that the law firm is my client and thus responsible
for my fees. Consequently, I was disturbed to read the recently
reported decision in Touchstone Bernays where the court held
that the law firm was not responsible for the expert's fee.
Any thoughts on this?
I maintain an expert
witness practice in the Los Angeles area as an adjunct to
my core human resources consulting practice. I appreciate
all you and your friend Alan have said about the tough business
decisions involved in accepting expert designation. I
would add that my Professional Services Retention Agreement
is signed by the lawyer or law firm that retains me. I
do not accept a defendant signing the agreement. I
realize that one never wants to sue an attorney but at least
by contract they are on the hook. As a practical matter,
I realize that they are often waiting to get reimbursed by
their client or by an insurance carrier but at the end of
the day if the agreement is drafted and executed properly,
they are responsible.
I find the newsletter
very valuable. Regarding retainer and other fiscal issues,
my own experience is that I must adapt to the market place
I am in and also to my own psychology. Things that
work well for many or most experts just do not work well
for me because of my personality. I have found peace
in the fact that I lose some business and am not paid occasionally
because I operate within my psychological and moral comfort
zone. But peace of mind and personal comfort & delight
in performing one's work are values also. However,
I would never contradict those of you who know better than
I do and whose advice I try to implement as best I can.
I disagree with
Alan. I have been doing this work for 35 yrs. If a lawyer
calls with a case I talk with him about it and if I agree
to review it we require a retainer. After I review
the case I send him a letter telling him I have reviewed
his case and my billings are enclosed & I will be happy
to give him my opinion but only after he pays my fee and
we receive the check. This pertains to all attorneys no matter
how many times they have sent cases. This now works 99%of
the time. Most attorneys explain this to their clients or
Much good advice.
I have a few things to add.
I refer to the expert’s client, I am referring to his
attorney client. Due to issues of objectivity, I recommend
that you not refer to the litigant (the party who engaged
your client as his attorney) as your client.