Turning Deadbeats into Doves

Posted on June 12, 2015 in Business Transactions, Disputes

The Thursday morning started calmly enough. In the office early, a fresh cup of steaming coffee by my side, I was ready to dive into the day’s work.

Then “Alice” called. The wife of a client I had served in a small matter several years earlier, she had an urgent situation: she needed to sell her business. By Monday. Forget the fact that there would be all manner of due diligence, getting familiar with the transaction, creating the sales documents, complying with the Bulk Sales Law…and sacrificing the weekend. She grumbled at the rates I quoted. She couldn’t understand why I would insist on a written engagement letter (a/k/a a contract) – don’t I trust her? And when she got the letter, which specified a partial up-front payment, she went ballistic. “I do business with some of the largest law firms in the city and they don’t treat me like this. The only reason I’m using you is because my husband used you several years ago. I could go anywhere!” I paused, calmly took a deep breath, and said, “Frankly, I think you should.” She uttered an expletive, demanded that I do something physically impossible with myself, and hung up the phone.

“Alice” was instructive for me because I clearly saw the signs of how this relationship could be rife with problems. And difficult relationships often manifest in deadbeat behavior.

Seeing the Signs

Alice had several behavior patterns that made my “deadbeat meter” (my gut) go off the charts. First, she acted the tyrant by trying to demean me (“The only reason I’m using you…”). Bullying has no place between people who intend to do business honorably. Also, her demands made no (common) sense: who wakes up on a Thursday and needs to sell a business by Monday? The timeframe alone made me suspicious that there might be something underhanded going on, in which case, I wanted no part of it. Her grumbling about my rates made the relationship start on a note of dissatisfaction – hers. I would have constantly had to prove my worth to her (with only dim hopes of success). All the manipulation would do is add tension to the client relationship. And finally, she bristled at my wanting terms in writing, which indicated that she did not want to be held accountable. Which is precisely what I needed her to be, given that we had had no prior relationship, and in light of the urgency of the work she needed.


Obviously, the best way to deal with deadbeats is “abstinence” – don’t take them on in the first place. Your productivity and success will depend on your ability to pre-screen them. Trying to collect on a delinquent debt is rarely profitable- in any sense. Financial exigencies can, however, get the better of us, or something happens during the course of the relationship, and we find ourselves facing nonpayment. What steps can we take, short of taking them to Court?

  1. Don’t let outstanding invoices fester. If a client has an outstanding invoice, don’t wait before trying to sort out the situation. Act immediately. The sooner you address the situation, the less it will loom – in your mind or your client’s – as a major problem (from which people either run or stick their heads in the sand).
  2. Keep communication open. Many non-payment situations arise because there was “a failure to communicate.” Maybe you didn’t understand what the client needed and, therefore, the client is unhappy with your service. Perhaps you weren’t clear on how and when you needed to be paid. Be open to the possibility that you failed to meet expectations.
  3. Keep working toward a solution. The saying goes, “The customer is always right.” Which is not to say that the customer is always in the right. Hear them out. Arrange for face-to-face meetings with clients, when you can. And don’t fight what they say. Try to move the process toward resolution by asking, “What might help you to feel satisfied?”
  4. Have options ready. Keep your mind open and nimble by thinking of options other than “full payment of the outstanding balance all at once.” Maybe a payment plan would help. Maybe you need to reduce the amount of the invoice. Maybe you need to redo the work first. Your goal is to get paid and, ideally, to preserve the relationship.
  5. Put it in writing. You should document whatever arrangement you and the client agree to, so that you can avoid misunderstandings going forward. And don’t let a client’s verbal promises of payment deter you from sending out follow-up collection letters. Keep a record of all payment reminders – letters, faxes, e-mails – that you have sent. These will provide an invaluable “paper trail” in the event that you need to take more drastic measures, such as bringing in a collection agency or a lawyer.

Finally, once the client has paid the outstanding amount, the matter – and the headache – has come to an end. Take the high road. Say “thank you” and send a note to that effect. Even something as simple as “Thank you for your payment of $___. Our invoice is now paid in full. We appreciate the opportunity to be of service.” You may screen this client differently next time, raise your fees, have different payment terms, or refuse to perform any more work for this client, but it doesn’t hurt to act graciously now. Doing so – despite the bother you encountered – will be a sure way to earn your clients’ appreciation and to turn future deadbeats into doves.

To get the latest posts delivered right to your inbox, enter your email in the box below:

back to top