Discussion:Burned by an attorney yet again...what a fool I am
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Discussion Forum Index --> Tax Questions --> Burned by an attorney yet again...what a fool I am
| 4 December 2007 | |
| You would think that after 15 years representing taxpayers I would have learned something. Nope. I am a fool. An absolute dope. A complete and utter idiot. How else can one explain my behavior; my lunacy. Do you know how many times I have represented clients and either gotten a levy released prior to getting paid or worse yet started working for an attorney prior to getting paid and never gotten paid at all???
So once again I choose to start representing an attorney...no names, of course, but this one is a divorce attorney in St. Louis. A nice guy, so I thought and there I was. Business has been a little slow as it always is in October and November so I decided to write up the POA, submit it to the RO and begin negotiations on a levy release without having gotten paid a penny. And once again, here I sit two weeks later...no money after investing several hours in this case. Finally today, I revoked the Powers of Attorney on both his business and the taxpayer as an individual. It seems I never learn.
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| 5 December 2007 | |
| I don't know if I should take offense or agree with this 100%? | |
Southparkcpa (talk|edits) said: | 5 December 2007 |
| In my practice we use a strict a engagement letter and get a decent retainer upfront. Usually $1,000. The engagement letter and the request for $$$$ usually gives you the right answer on the client.
Good luck!!! | |
| 5 December 2007 | |
| I assume you are not located in MO. I'd be suspicious of any out of town attorney calling to use your service. A lot of former IRS people get their law degree after retiring, I think there are at least 3 who advertise in my town. If he's a well thought of attorney in his hometown, why wouldn't he call one of these attorneys, or another attorney friend, or friend of a friend? The red lights would go on for me. It speaks strongly of his reputation in the legal community (zero), and it does get around. | |
| 5 December 2007 | |
| It is common for attorney's and CPA's to go out of town for their tax problems. The reason is that they are embarrassed and do not want their peers to know about their predicament. I have represented many. | |
| December 5, 2007 | |
| Another sad lesson in the need to get retainers...especially for those who walk in off the street. What do you want to bet the attorney in question NEVER does work without being paid up front? If the client is unwilling to pay a retainer, they are not truly committed to engaging your services and getting the work done in a professional manner. | |
| December 5, 2007 | |
| Well, now it's engrained and there won't be a next time, right? | |
Donniecastleman (talk|edits) said: | 5 December 2007 |
| Well, like Don Henley sang in the song "Get Over It", "Let's kill all the lawyers, kill 'em tonight". I never wanted to be a lawyer, I have better ethics than that! | |
| 5 December 2007 | |
| Add this note to your file: Remember to always get a retainer from an Orthodontist, too. : )= | |
| December 5, 2007 | |
| Remember to get a retainer always. I had a nonprofit stiff me as well. | |
Ksnoopytax (talk|edits) said: | 6 December 2007 |
| I've never quite understood CPA's and i've worked for them for awhile now. My boss doesn't even want to send out the engagement letter I wrote up because it's too long and no one will want to take the time to read it. We rarely get a retainer for work even though the work maybe for filing back returns. Obviously, if they haven't paid their taxes they may not pay us. | |
| 6 December 2007 | |
| I love engagement letters and retainers. Nothing I like better than sitting down with a client and going over the engagement letter paragraph by paragraph, or doing it over the phone. If you don't go over it with them, they just sign it without reading it. In addition to providing some legal protection, the engagement letter lends an air of formality and professionalism to the CPA - client relationship. Since I work out of my home, I really like that.
I won't do any work over $500 for a new client without a retainer. I do a lot of work for nonprofits wanting me to prepare Form 1023. Some will keep calling me for more information after the initial meeting (for which I charge), but I always tell them that I'll be happy to discuss more details with them after I get the signed engagement letter and the retainer. I also do a lot of penalty abatement request letters for Form 990 penalties and I ALWAYS get paid up front for those. One of the hardest things I've found to do as a CPA is to ask for money. But I'm getting to be pretty good at it now. I have a nice line in my engagement letter that says: "Since this engagement will require a significant commitment of my time, I ask that [business name] demonstrate its commitment to the project by providing me with an initial deposit of $$$ to begin work. The balance will be due and payable upon completion of the work." Usually I ask for at least 1/3 up front if I'm comfortable with the client (good referral). More if I'm not comfortable. I also include a line (for clients that procrastinate in responding to info requests) that says that if the work takes longer than expected "due to circumstances unrelated to my performance," I will send interim billings for work completed to date. I recently signed an engagement letter for graphic artist services that spelled out the terms of payment along with this note: "This is to ensure this project remains as important to you as it is to us." I really liked that and am considering adding something to that effect to my engagement letter. | |
| December 6, 2007 | |
| So David, it's great that you get the retainer up front, but that still leaves you open at the end. That's how I got caught. Now I keep asking for retainers or deposits along the way. I mention in my engagement letter that client retainers are held in a client trust account and that the do not earn interest.
Why do you put in the line about "unrelated to your performance"? | |
Death&Taxes (talk|edits) said: | 6 December 2007 |
| "My boss doesn't even want to send out the engagement letter" Snoop, are you sure you aren't working for Old Fezziwig? | |
| 6 December 2007 | |
| Natalie,
Yes, it would leave me open at the end. When I've completed the engagement, I meet with the client for signing of forms, etc, and I don't hand over the return/application until I have a check in my hand. For out-of-town clients I expect payment up front, but I've only had a few of these. The "unrelated to my performance" language protects me against clients that don't respond withing a reasonable period of time to my questions and requests for additional information. For instance, say I accept an engagement to do a 1023 for $3,000. I ask for $1,000 up front and I work up a very rough draft and a list of questions and have $2000 worth of time into it. The client then doesn't respond to the questions and keeps procrastinating. This delay is not caused by me, so I bill for the work I've done up to that point. Some clients will drag it out for 6 months. If I am causing the delay, because of other jobs, etc., then I am less likely to ask for more money until I've completed the work. I could, but I usually don't. I guess if you are doing interim billing anyway, then this would be unnecessary language for the engagement letter. | |
| December 6, 2007 | |
| Okay got it. I bill just about everyone every month, unless time incurred is less than an hour. That way clients know what to expect and don't get hit with a big bill at the end. Since you have something that you can give your clients that you can withhold if they don't pay, you're in a better position to apply leverage than I am. | |
