Thursday, December 23, 2010

Resurrecting Deadbeats

by Craig Ball

Craig Ball
About the Author

Craig Ball is a Texas lawyer who limits his practice to service as a court-appointed special master and consultant in computer forensics and electronic discovery.

An op-ed piece in the New York Times called Begging for Your Pay describes the humiliating ordeal of freelancers forced to hound clients to recover thousands of dollars of compensation. It brings to mind the occasional posts on computer forensics lists where our colleagues vent about unpaid invoices.

Sometimes, the unpaid forensic examiners wonder if they must throw good money after bad or whether they can refuse to appear at deposition or trial. Other times, the posts prompt discussion of recourse—lawyerly letters, withheld work product or lawsuits. More than anything, these list posters seek commiseration: reassurance that he or she is not the only knucklehead who let a deadbeat run up a big tab.

Sometimes, we are so anxious to get new business that we don’t protect ourselves against bad business. Bad business is worse than no business because bad business costs you money.

Any business that extends credit to its customers risks non-payment. We don’t think of computer forensics as a business that extends credit, but when you work without retainer or the retainer is used up, you’re financing your client’s investigation and must take steps to limit your credit risk.

In tough times, clients will impose on your goodwill to finance litigation. If you want to be their bank, be sure you’re adequately compensated and acting in compliance with credit regulations, then be prepared for default. A mechanic has a lien on the car being repaired, but you can’t sell client data to defray unpaid bills.

Here are some of the steps I take to insure prompt payment and guard against default...


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