In the legal and collection industry we call this document a demand letter, but in most other circles its simply known as an “attorney letter.” There are many people who are fearful of this type of correspondence and others who simply trash or avoid it as a matter of course.
Regardless of how it is treated by the recipient, an attorney letter can 1) get you paid quickly and 2) is generally inexpensive. Neither of these two qualities exist in many legal offerings.
Components of an Attorney Letter
An attorney letter can be either a simple one page letter demanding amounts owed or it can be a multi-page document containing legal authority, legal argument and voluminous exhibits. Typically the more time and effort spent on the letter will determine the costs, but that is not necessarily indicative of the outcome: to get paid.
The attorney letter must be written on attorney letterhead and contain the signature of a licensed attorney, in order to have maximum effectiveness. Its better when the parties, amount in disputes and other important facts are put in the “regarding” section before the narrative begins.
The narrative or body will contain who the attorney represents, the amount in demand, many times the location of the dispute or accident and the legal support as to why the attorney’s client (represented party) is entitled to the the funds or specific performance demanded.
Many attorneys will attach contracts, invoices, pictures, other correspondence, and other supporting documents to the demand letter in order to bolster its strength. Further, many of these letters are used later on if the dispute does not resolve.
Strengths of an Attorney Letter
There are many aspects as to why a person or company should send an attorney letter. Many times a contract or statute require such a letter be sent in order to preserve or effectuate certain rights. Other times a statute may require written demand be sent before rights such as attorney fees and costs, mature. A perfect example is the Louisiana Open Account Statute, La R.S. 9:2781:
“When any person fails to pay an open account within thirty days after the claimant sends written demand therefor correctly setting forth the amount owed, that person shall be liable to the claimant for reasonable attorney fees for the prosecution and collection of such claim when judgment on the claim is rendered in favor of the claimant.” La R.S. 9:2781.
Here, an open account claimant can be awarded attorneys fees if written demand is sent and the claimant waits thirty (30) days before prosecuting. Recouping of attorneys fees can make or break whether a claimant chooses to go after a bad debt.
There are a number of examples like this in Louisiana law and in contracts between parties that make attorney letters even more powerful.
Circumstances to use and an Attorney Letter
Sending an attorney letter is a strategic move and the consequences of sending such a letter should be contemplated ahead of time. Attorney letters do not always have to demand money. Sometimes parties can send attorney letters to lay out a dispute or certain rights that the claimant is entitled to.
Other circumstances where attorney letters are used is in response to a demand of some time. My Construction clients often get letters or other notices stating that my client needs to do something related to a contractual provision.
Many times a general contractor will order a subcontractor to do some type of work that the sub does not consider part of his scope of work. At this juncture the sub can either do the work or risk the possibility of default. A response with a well thought out attorney letter will often let the general contractor know that this subcontractor will not be easily pushed around.
As stated above, the complexity of an attorney letter can vary. Nevertheless, the effectiveness of the letter is the same. The outward look of your company is also changed, letting potential adversaries know that your company is prepared and informed of its rights.