In the legal sector, it is well known that unpaid invoices can severely impact cash flow and operational efficiency.
Law firms specialising in intellectual property, such as trademarks and patents, often face challenges in recovering outstanding fees from commercial clients.
Federal Management successfully provided legal debt collection services for a renowned law firm, recovering 82% of debts owed across 22 accounts in the space of 6 months.
This case study explores the challenges faced, the solutions implemented, and the results achieved.
The Client
The client, a distinguished law firm specialising in trademarks and patents, provides expert legal services to commercial clients across multiple industries.
Over a 20-month period, the firm had accumulated unpaid invoices from businesses that had sought legal support for trademark registrations, patent filings, and intellectual property disputes.
The Challenge: £317,000 in Unpaid Invoices Across 22 Accounts
The law firm struggled with recovering outstanding legal fees from commercial clients, which resulted in a total of £317,000 in unpaid invoices spread across 22 accounts.
The firm encountered several key challenges:
- Ghosting Clients – A small minority of Business Clients simply ignored request after request for payment. This despite having already been provided with their requested services.
- Spuriously Disputed Invoices – Some clients challenged the legal fees, despite having agreed to the terms and conditions beforehand.
- International Clients – Some debtors were based overseas, making the collection process more complex.
- Resource Limitations – The law firm lacked an internal team dedicated to debt recovery, impacting their ability to chase unpaid invoices efficiently.
The Solution
Understanding the impact of unpaid invoices on their firm, the client sought the expertise of Federal Management, a trusted name in professional debt collection services.
We implemented a structured and professional approach to recover the outstanding amounts while maintaining the client’s business reputation.
Federal Management’s Legal Debt Recovery Process:
Federal Management utilised a comprehensive strategy to recover the unpaid legal fees efficiently and ethically:
1. Initial Assessment & Case Evaluation
- Conducted a thorough review of the outstanding debts, including contract terms and client correspondence.
- Identified high-priority cases where recovery was more feasible.
2. Instruction & Communication
- Initially sent a notice of instruction to debtors, highlighting the overdue nature of their accounts.
- Engaged in professional but firm negotiations with clients to facilitate prompt payments.
3. Formal Debt Collection Procedures
- Followed up the first letter with Phone Calls, SMS Text, Emails and the option to visit where appropriate to do so.
- Assisted legal professionals to escalate cases where payments remained outstanding to County Court then subsequent enforcement where needed.
4. International Debt Recovery Expertise
- Implemented international debt recovery methods for overseas clients, leveraging their global network of legal partners.
5. Resolution & Client Support
- Provided continuous updates and transparent communication to the law firm.
- Successfully negotiated settlement plans for clients struggling with financial constraints while ensuring optimal recovery.
The Results: 82% Recovery Rate Achieved
Federal Management’s professional and persistent approach led to remarkable results:
- 82% of debts recovered (£260,000 out of £317,000)
- 22 accounts successfully settled, ensuring the client regained financial stability
- Improved cash flow and reduced financial strain for the law firm
- Enhanced client relationships through ethical and professional collection practices
The swift recovery of outstanding legal fees allowed the law firm to focus on its core legal services without the burden of financial uncertainty.
Conclusion
Unpaid invoices can be a major challenge for law firms, impacting financial stability and operational efficiency.
By engaging Federal Management, this trademark and patent law firm successfully recovered a significant portion of outstanding fees, reinforcing their financial health.
If your law firm is struggling with unpaid legal fees, we offer a proven, professional, and ethical approach to debt collection. Contact us today to learn how we can help you recover what’s rightfully yours.
Don’t let unpaid legal fees impact your business – contact Federal Management today for a free consultation and see how our expert team can assist you.
