I recently followed a link from one of the AIA eNewsletters:
http://info.aia.org/aiarchitect/thisweek09/1023/1023b_billing.cfm Read the article; it’s worth it.
Actually I have presented seminars at state, regional, and national conventions on the topic of “reducing liability in the sustainable firm." Inevitably the question comes up on how to get paid. I tend to be way more proactive and identify problems before they become big (I don’t take a marginal client; as I’ve said before, “I’d rather have mac & cheese dinner with my kids and be happy than work for a bad client”), so I have a fair bit of experience leading me to that decision.
So, back to the article. I have some suggestions for improvement to “the end game.” Reread the article, paying attention to “final options” section.
I have successfully used liens to secure late payment from clients in the past. The article notes that a lien should be filed after 120 days. In Georgia architects file liens under the Mechanical Lien Laws, and the deadline for filing is 90 days after the last date of service, not the invoice date, not the last conversation, etc. After the lien is filed, the filer has 12 months (from the last date of service, not the lien filing date) to perfect the lien. After that, we use the perfected lien to get a judgment (getting the judgment satisfied is another topic).
I have had the best success when someone is 45 days past due, starting the discussion and “blaming” the shortened timeframe on the state laws. At 60 days past due (which is about 75 days after last service) I’ll send a completed (not filed) lien form; any “on the fencers” will typically jump at paying when they know it’s only a trip to city hall and recording fee to being reality. Upholding good design and standard of care is essential, being “right” on being owed the money helps, too.
Most of all, what I took away from the article (ok, go read it again now) is that all firms and practices, regardless of size, should have a methodology in place (writing it down is very important) guiding business decisions. Include a brief discussion with your E/O insurance carrier when you’re developing your methodology and turn it into a real policy for your firm.
—Lisa Stacholy, AIA