Posts Tagged ‘Demand Letters’

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Attorney Demand Letter – Will It Get You Paid?

lawyer letter

Everyone in the construction industry has trouble getting paid at some point. In fact, when Construction Week Online conducted a poll inquiring who in the industry had payment problems, it found that a whopping 0% – that’s right, zero percent – reported they were always “paid in full and on time.”

Payment applications and invoices get sent out, and then it’s unfortunately a battle to always get cash flowing. What can you do to mitigate these circumstances and get paid more and more often?

The answer may be quite simple – sending a demand letter, and then sending an attorney demand letter / lawyer letter.

Getting Your Account Paid Means Prioritizing Your Invoice With Your Customer

First, non-paying customers are not uncommon, nor is it a problem unique to the construction industry.  One website I really love is the “World’s Longest Invoice,” which is just an on-going list of people and companies across the country who are not paying their bills.

If you’re going to turn a non-paying account into a paying account, you must first ask why the customer isn’t paying.  In most cases, it’s because your invoice is not a priority for that customer. This frequently boils down to something very simple: following up on invoices and amping up the pressure to pay.

Make your invoice or payment application top of mind. How? Make sure they have the invoice. Followup with phone calls and emails. Followup, followup, followup…and let us suggest sending a demand letter.

Payment Demands From Attorneys Presses The Right Buttons To Get You Paid

When followup phone calls, emails, and correspondence just doesn’t work, it’s time to start considering your other options. At the end of the tunnel is litigation, and you’ll want to avoid that at all costs. You can also file a mechanics lien to bridge the gap. Before these legal remedies, however, you may get good results from a simple and ineffective step: sending an attorney demand letter.

An attorney demand letter will accomplish two very important things:

  1. It will communicate to your customer that you are serious about the debt, and it will prioritize your account;
  2. The lawyer letter will put you in your best collectable position by availing you of all laws on your side to protect your right to payment.

There’s no reason why you should avoid sending a lawyer letter. It’s easy, and can be very affordable. Take our firm – Wolfe Law Group – for example. We have a flat fee to send an attorney demand letter. You don’t need to sign a complicated fee agreement, do a formal consultation, and worry about an hourly bill adding up.

You simply put your information into our online form and watch your letter get sent – it’s that easy. One flat fee and your customer gets the demand letter, and usually pays up.

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Sports and Construction – Lessons Learned

Growing up in South Louisiana, originally from Baton Rouge and now residing in New Orleans, I’ve had a really rough week being a sports fan. After LSU laid an egg in the BCS Championship game and the Saints came up seconds short in the NFL playoffs, I began to ponder, what can we learn from this? Being a construction law attorney, I wanted my clients and readers to learn form the mistakes and shortcomings of my favorite teams.

Some general themes we can take away from both losses are that the teams who are most prepared and execute the game plan the best will be the most successful. In both instances, LSU and the Saints did not execute and were not as prepared as their oppoinent. In the construciton world owners, general contractors, subcontractors and suppliers succeed when they are fully prepared for the project at hand and fully execute the company’s specific game plan for success.

IF LSU’s BCS PERFORMANCE WERE A CONTRACTOR IT WOULD NEVER GET PAID

LSU worked very hard all season to get into the big game. This paralles a budding company doing all it can to land that very promising bid for a substantial project. A contractor prepares for months and years to get that big once-in-a-lifetime project. When the big stage rolls around, the contractor needs to make sure, he/she does everything correctly so that they get paid and produce quality.

In LSU’s case this contractor would have not been successful in negotiating a quality contract that is mutually beneficial to each contracting party. They would not have filed all of the preliminary documents such as a notice of contract. This is a company that would have had numerous delays along the way, many of its own doing. During the course of the project this company would have not made any adjustments as the project went along continuing to further bury itself with no chance for success. When then end of the project rolled around, there would be no substantial competion filed, no adequate demand for payment, no lien filed or any other tool used to secure payment. This company would be last in line to get paid, and when its all said and done, the dream project would have been a disater, possibly putting this company in financial ruin. I encounter this type of company all the time and unfortunately, by time it gets to my desk, there is little or no hope of securing full and final payment.

IF THE SAINT’S PLAYOFF GAME WITH THE 49′ERS WERE A SUPPLIER IT WOULD FALL SHORT OF SUCCESS

The Saints on the otherhand had a game that played out just a bit differently. Had it not been for mistakes early on and poor late game defense, they too would have advanced and been in the NFC Championship game. This is analogous to many issues that suppliers have when trying to successfully obtain full payment at the conclusion of a job.

By the time I get a call from a supplier who is not being paid on a job, many of the typical right protection devices are no longer present due to the mistakes that suppliers have made early on. When supplies are delivered to a job, notice to the general contractor, hiring party and property owner need to be given to preserve lien rights. Also, suppliers need to make good practice of obtaining a personal guarantee from the contracting party. Further, suppliers need to set up an “open account” in the supply contract, which will statutorily preserve rights for attorney fees and costs. All of these precursor items can be set up in the begining and save a supplier lots of time, money, and stress at the end of a project.

When I finally get the call from the supplier to aid in collection efforts, we make a strong last minute charge to file a lien, send a demand letter asserting rights under open account, and file suit to protect these causes of action. Depending on the set of facts at that juncutre will determine our chances of success. In the case of the Saints, too many early mistakes and a shoddy prevent defense, led to their downfall. If this were a supplier then they would have gotten pennies on the dollar at best on this project, no matter the last minute heroic efforts.

WRAP UP

We need to look at the success and failures of others and learn from mistakes and good calls. There are lessons to be learned here. My teams will live to fight another day, but many companies do not. In these economic times an ounce of prevention is worth a pound of cure, to steal a medical analogy. Set up your game plan to do it right from the start and you will end up with success, unlike the teams noted above.

Posted in:     Collections, Construction Contracts, Construction News, Delays, Filing Requirements, Litigation, Louisiana  /  Tags: , , , , , , , , , ,   /   3 Comments
Posted in:     Collections  /  Tags: , , , , ,   /   2 Comments