Use the following steps to help avoid fee disputes.
Know your prospective client
It cannot be said enough: while your clients evaluate you, you should evaluate your clients. Doing so reveals whether you want to work with them and what contractual protections you need. Some clients are unfamiliar with the design and construction process and misunderstand your role; others are experienced but may have a track record of withholding payment, demanding extra services for the same fee, or using threats of litigation to avoid payment. Vetting clients early reduces those risks.
Use a clear, specific contract
Standard forms (AIA, EJCDC) are precise for a reason. If you use a custom contract, make it equally explicit about scope, fee, billing frequency, late-payment terms, collection efforts, and leverage (for example, withholding deliverables until invoices for the work that produced them are paid).
Manage your billing process
Regular and prompt statements detailing the services provided summarize the progress you have made since the last billing period. Timely invoices both document progress and create opportunities for clients to flag dissatisfaction before it becomes a dispute.
Manage the client relationship
Many disputes grow from misunderstandings that could have been avoided with straightforward communication. Keep clients informed with regular written and verbal progress reports. Involving them throughout the process makes it easier to identify and resolve problems early.
Avoid litigation over your fee
If you have not included an arbitration provision specific to payment issues in your contract, consider your collection efforts carefully. Litigation should be a last resort. Before filing suit, ask:
- Is the outstanding amount substantial enough to justify the cost and time of litigation?
- Is the client satisfied with the project’s outcome?
- Has an experienced, disinterested professional reviewed your work and found no potential liability?
- Is any judgment likely to be collectible?
Only if you can answer “yes” to all four questions should you seriously consider suing. Anecdotal claims data shows that suits for fees often trigger counterclaims for negligence or breach of contract.
And always consider mediation
Even if not required in your contract, non-binding mediation affords you and your client a low-risk, non-threatening way to use a neutral party to help you craft a mutually acceptable resolution.
Protect your firm
In short, the most reliable way to resolve fee disputes is to prevent them:
- vet clients carefully;
- use clear and specific contracts;
- maintain timely billing; and
- keep communication frequent and documented so problems are caught early.
When disputes arise, prioritize low-cost, low-adversarial options—early negotiation and non-binding mediation—before considering litigation, and only pursue a lawsuit after assessing the recoverable amount, client satisfaction, potential professional exposure, and collectability. Taken together, these steps protect your firm’s cash flow, reputation, and resources while preserving the best chance of an amicable, enforceable resolution.
Additional resources
We also have additional resources about how best to avoid and subsequently deal with fee disputes. You can read about Avoiding claims through fee collection (access limited to current Victor insureds and brokers) or suggestions for avoiding issues with fees before they become disputes in the blog post below.