Collection on Unpaid Legal Invoices in Tennessee: One Really Good Reason to Wait One Year

The Tennessee Court of Appeals issued a recent opinion discussing the elements of legal malpractice claims. The case is Tucker v. Finch,No. E2010-01704-COA-R3-CV, Slip. Op. (Tenn. Ct. App., Aug. 30, 2011).

The case provides a good summary of the statute of limitations on legal malpractice actions, which must be “commenced within one (1) year after the cause of action accrued.” Tenn. Code Ann. § 28-3-104(a)(2). The one year clock starts ticking “pursuant to the discovery rule “when (1) the client suffers an actual or legally cognizable injury, and (2) the client knows, or in the exercise of reasonable diligence should know, that the injury was caused by the attorney’s negligence.”

How is this relevant to collections? According to the ABA, most attorney malpractice claims are filed in response to attorneys taking collection actions against clients. Once you sue or threaten to sue a client for unpaid bills, it’s exponentially more likely that that client is going to attack the value of your legal services.

But, don’t forget, the statute of limitations for collection on unpaid debt–including unpaid legal invoices–is six years in Tennessee.  Malpractice actions must be filed in one year.

As I’ve written before, this is why lawyers wait at least a year to collect on unpaid invoices.

If the underlying lesson to aggrieved clients in the Tucker case is “don’t sit on your malpractice claim rights,” the flip side of the coin may be “let sleeping dogs lie, at least for a year.”

(Side-note: I’m not condoning malpractice or encouraging attorneys to avoid responsibility. But, I know from experience, you can provide world-class services and, faced with a bill for world-class services, some clients are going to allege you did something wrong. On those clients, wait a year.)

Author: David

I am a creditors rights and commercial litigation attorney in Nashville, Tennessee.

2 thoughts on “Collection on Unpaid Legal Invoices in Tennessee: One Really Good Reason to Wait One Year”

  1. Absolutely spot on advice and suggestions. I spend countless hours on cases that I never bill, just to be as reasonable as possible. However, just one of countless examples, after winning a modification of “primary residential parenting”/”custody” case, (TWICE ACTUALLY!, due to the Chancellor, after the first trial, allowing the opposing counsel to “amend” her Petition and include allegations that substantiated her case pursuant to Tennessee law). So, I won the first trial after a 5 hour hearing, through cross examination only, as I believe strategical analysis and application of such is imperative to win cases. Therefore, I argued no evidence had been alleged, nor had been so testified in Court, that there was a “material change of circumstances that was not in existence at the time of the prior Order and was not reasonably foreseeable at the time either”, hence no reason to proceed to a best interest analysis.
    The Chancellor agreed, granting my Motion to Dismiss, but, also, allowed the opposing attorney 30 days to amend her Petition and so allege the necessary law and substantiating allegations.
    Naturally, of course, after the initial brutal hit she took at the first trial, she amended the petition, yet simply inserted the “material change of circumstances” language and alleged past events (prior to the finalization of the previous Court Order [aka PPP]), and so we had yet another trial, again with 4 experts this time, and again, I won the case on Motion to Dismiss at the end of the Petitioner’s proof (largely on the cross examination and extraordinary amount of research I had performed).
    However, when I informed my client of the most reasonable fee, after winning two trials on the same issue, and, in fact, the opposing party even lost some parenting time with the minor children, the client, being frustrated with the Court allowing two trials, and that the client had to pay for my representation for both trials, the client refused to pay, and filed a completely and utterly baseless claim that was dismissed, but took countless hours of time to defend despite the transparency of its lack of merit.
    So, thank you for your advice, particularly:
    “I’m not condoning malpractice or encouraging attorneys to avoid responsibility either. But, I know from experience, you can provide world-class services and, faced with a bill for world-class services, some clients are going to allege you did something wrong. On those clients, wait a year.)”
    However, one HUGE question: should an attorney send a bill to such a client soon after representation is over, or, should an attorney wait for an entire year to bill a client for the remaining fee due and owing? I realize that an attorney can bill without threatening to sue, or commencing a lawsuit, but the remaining fee owed seems just as likely to provoke such a response. It has appeared to me, after 23 years of practice, that it is the bill, just as much as the threat to sue, or the lawsuit over the attorney’s fee, that provokes a client’s reaction regarding either filing a malpractice claim, or, at least filing a Complaint with the BPR, despite the merits of either. And, it takes an extraordinary amount of time to defend against either, despite the obvious lack of merit regarding such a client’s complaint (malpractice or BPR in nature).

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