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Invoice left unpaid from foreign branch of good national customer: what to do?

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Hi guys,

I have a good and recurrent national customer with branches abroad. Two of these branches entrusted me with work more than a year ago. I was given this work, which consisted of legal assistance in revising and updating website privacy policies, from the supervisor of marketing of the whole group.

I revised one of these policies, and was paid for this work.

Then I was asked to revise another privacy policy, relevant to another branch of the same company in another country. I started working, produced a working draft, and asked for information on several points. The person who entrusted me with this work emailed me that my draft had been forwarded to the relevant branch, and that he would forward its answer to me asap. Then he went silent.

I waited six months, and at the start of this year I sent him an invoice addressed to the relevant branch of the company for the work done so far with reference to the second privacy policy, mentioning my continuing availability to work on it upon receiving the information I requested.

Another year has passed, and no response came my way, nor was I paid. So I recently sent the supervisor an email whereby I essentially wrote the following:

Dear ...,

I did not receive payment of the attached invoice yet. Did any problems arise?

I am available to speak on the telephone if you prefer.

Best regards.

One more week has now passed, and still I have no answer.

Some thoughts/context about this, flashing into my mind as I write:

  • throughout all my interactions with this person, via email, I was being very submissive, and at the time I did not understand what I was doing (the most striking feature of my emails is that I was thanking repeatedly for every little thing, including thanking for receiving work and thanking for receiving payment);
  • my submissive behavior at the time was probably out of line with my decision to ultimately invoice for the incomplete work without asking first: maybe the supervisor expected me to ask him if I could invoice the company for the unfinished work? However, I think I chose this way to proceed because I sensed disrespect in the supervisor going silent; also, if this were the problem, why don't tell me they are not willing to pay for unfinished work?
  • the group is financially powerful. They have no problems in paying for work. When I was paid for the work I did as to the first policy, they actually asked if I could add VAT to my invoice because it would be easier for them to process it, even if it was not due.

I am at a loss here at what to do now. My thoughts are:

  • the work was left unfinished, even if not due to my choice. I see from their website that they ultimately decided to have the second policy revised by another lawyer. While I was left in the dark and uninformed about their decision to not continue, I did work that was ultimately not used: so I would not have any problems in reducing my fees substantially, or even waiving them, also considering that this is a foreign branch of a good client of mine in my country;
  • on the other hand, I would prefer avoiding to be the one who proposes the reduction/waiver, since this person is basically disrespecting me in not answering and just fading me; and I would prefer avoiding negotiating against myself when I don't know the position of the other party. I think my aim in writing the above e-mail was allowing him to choose this "ask for reduction/waiver" route, but I am receiving no answer;
  • if I push and escalate, I fear repercussions from my local branch of the group, or even my name becoming blacklisted in the whole group. Also, however I decide to escalate, a lawsuit here is out of the question: so I would in any case have to stop pushing at a certain point;
  • if I do nothing, I will automatically lose all business from all foreign branches of the company. This is because they know that they owe me this payment, and they will probably continue just avoiding me not to trigger my request for payment.

In essence, my conundrum is that here I am ultimately losing all foreign business irrespectively of what I do. At present I cannot see a good way to correct this.

I could waive the invoice unilaterally, e.g. writing a new email saying "I see you decided to have the policy finished by another lawyer, so I am hereby waiving my fees in the interest of a continued work relationship with you". But I fear I would lose much credibility this way.

I think my mind is presently oscillating between three routes: (a) waiving fees unilaterally, (b) leaving things as they are, or (c) pushing some more just to receive an express answer.

I will try to answer my own question based on my thoughts so far: since it is clear that none of the three options is optimal, and since my main weakness at this time is not understanding the reason why the supervisor is not answering me, I should probably shift objective for the moment and focus on getting clarification, instead of getting payment.

How to do that is something that still escapes me. Maybe try calling the supervisor directly on the phone?

Is it common to wait that long to send invoices and ping people?

Because if not, it can easily feel "off" for people to receive is late.
And if the amount was small it feels like "bean counting".

What I'd do now is to call the supervisor and then go something like:

Hey, hi, you are you. I'm following on that work on the privacy statement.
(...)
Yeah, it's been a while, I know. I sent an invoice, but it's not so much about the invoice, it's about the communication. I think we have a good relationship, and in a good relationship, I'd expect an answer.

Chances are he will apologize, in which case you'd be all kind and understanding:

Yeah, yeah, it's cool, no problem, just wanted to talk to you quickly and make sure all is well.
And forget about the invoice.

It's a bit of a risk.
If he's a guy super high in power he will feel slighted and might push back. But if you hold frame without offending him -not easy but doable-, even in that worst-case scenario, you will gain a ton of respect (and very possibly more future business).

Bel has reacted to this post.
Bel
Have you read the forum guidelines for effective communication already?
Quote from Lucio Buffalmano on December 14, 2021, 5:23 am

Is it common to wait that long to send invoices and ping people?

Because if not, it can easily feel "off" for people to receive is late.
And if the amount was small it feels like "bean counting".

Thank you Lucio,

you are spot on. Sending invoices late is something I used to do in the past, and only recently I realized, as you say, it was making me lose customers.

The reason why I used to send them late was to wait for the work to be finished before invoicing, as the work would sometimes go on for months; some customers would actually then purposely avoid "finishing the work" with me, and I would feel tricked, and then I would send them the invoice for the work done so far. This is similar to what happened here.

Some other times I would wait some time due to needing to see how the matter went before determining fees. In all cases, as you say, I found the customer would get annoyed, but I only had this realization this year.

So now I either send an invoice at the end of each month, or at least mention to the customer that I would invoice later for specific reasons. I still need to understand what to do when the customer purposely gives me work that is not finished just to avoid paying.

What I'd do now is to call the supervisor and then go something like:

Hey, hi, you are you. I'm following on that work on the privacy statement.
(...)
Yeah, it's been a while, I know. I sent an invoice, but it's not so much about the invoice, it's about the communication. I think we have a good relationship, and in a good relationship, I'd expect an answer.

Thank you, I am going to call the supervisor as you say and I'll post the result.

Lucio Buffalmano has reacted to this post.
Lucio Buffalmano

Got it, and good call on sending invoices out earlier.

I think the social exchange lesson in PU also touches on this -it's a form of "hyperbolic discounting"-.

When people receive work today, that work seems "in the past" after 6 months, so as crazy as it might seem, in many people's subconscious the invoice is almost unfair.

Plus, albeit many people won't admit it, when they don't receive an invoice for a while they start thinking that they "got away with it".
And when they realize they didn't, they get annoyed -independently of how irrational it is-.

Quote from Bel on December 14, 2021, 11:22 am
Thank  you, I am going to call the supervisor as you say and I'll post the result.

Cool, curious to know.

Also, the reason why it's a good idea to call and solve this issue is that the pending invoice might prevent the person from working with you again. Thinking of you will make him think of that invoice and he might not contact you simply to just save face -and/or to avoid the work of getting the invoice settled-.

Another thing you can do to increase the cooperativeness of the call is to start with something like this:

Hi X, I hope all good with you.

Look, let me say it first, this is no big deal, I think we always did good work together, and I think you guys are a class act.

But I wanted to quickly clarify this thing...

Bel has reacted to this post.
Bel
Have you read the forum guidelines for effective communication already?
Quote from Lucio Buffalmano on December 14, 2021, 11:41 am

Plus, albeit many people won't admit it, when they don't receive an invoice for a while they start thinking that they "got away with it".
And when they realize they didn't, they get annoyed -independently of how irrational it is-.

Thank you, this explains why customers got invariably annoyed in these cases. I am eating my hands knowing I have lost so many customers this way. Social exchange rules trump legal rules.

Another thing I started doing in some cases is sending out monthly reports detailing the fees accrued month by month.

Also, the reason why it's a good idea to call and solve this issue is that the pending invoice might prevent the person from working with you again. Thinking of you will make him think of that invoice and he might not contact you simply to just save face -and/or to avoid the work of getting the invoice settled-.

I agree. This is something I realized from a book by Jay Foonberg about lawyer practice; I am quite certain that she will never contact me again if I don't speak to her.

I am trying to reach her today.

Lucio Buffalmano has reacted to this post.
Lucio Buffalmano

Couldn't reach her, will try again tomorrow.

Some additional thoughts on the above:

  • while I understand it was a mistake on my part to issue invoices with significant delay, I feel some clients of mine purposefully manipulated the situation by either drip-feeding work so that it would be impossible for me to invoice them monthly, or by giving me the idea that some work would have to be followed by other work that never came; another client (an engineer) even told me "I have lost clients by asking to be paid immediately without waiting", which I now understand was an implied threat to me;
  • Jay Foonberg suggests, to handle some of the above cases, to wait, and then send a "zero-sum" invoice to the client: he reasons that even not sending anything is going to make the client disappear for fear that you will remember to invoice them later. In my experience this is true, and sometimes I did not follow up with the zero-sum invoice (nor with the proper invoice) exactly because I wanted to lose the client.

I am at a point in my life where I just can't stand manipulative people.

Bel this seems to be another example where some kind of progress payment would have helped you.  You also don't mention having regular meetings arranged.  Normally for any activity that will go over a few weeks or months I put in placeholder meetings with the client and say just to let you know how it's going so I can make sure things are tracking as you want and you don't get any surprises we will only use them if we need them.

So my take is if they push back on regular invoicing and you re willing to accept that still have the meetings.

Personally I would just look up on their website what their payment terms are and mirror those.  Pretty hard for them to argue that you are being demanding and cash hungry if you have the same terms as them.

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Lucio BuffalmanoBel

Thank you Transitioned, you are absolutely right and your suggestions are really useful.

It's been a slow crawl up from rock bottom, starting with how to do good work, then how to just be able to ask to be paid, then how to spot manipulators (I didn't even understand they existed!), then how to protect from them, and so on. At the time I just couldn't fathom how someone could take work and disappear, or manipulate to defer or avoid payment.

Lucio Buffalmano has reacted to this post.
Lucio Buffalmano

Upfront payment per project instead of per time might be possible?

Or staggered payments as the project goes on, on a "monthly billing basis"?

Maybe to entice on that plan you might offer a discount -which might still not be a loss to you because you save time and headaches in chasing invoices-.

Quote from Bel on December 14, 2021, 6:19 pm

another client (an engineer) even told me "I have lost clients by asking to be paid immediately without waiting", which I now understand was an implied threat to me;

Yeah, sounds like a power move.

A good answer might have been:

They don't sound like great clients to me. The way I see it, good work deserves timely payment. Anyway (move on and talk upbeat and friendly now)...

The "anyway" right after is to move on so you avoid getting stuck in the confrontational frame.

You send the message you're not going to roll over and submit to his power moves, but you also avoid a battle of will.

Bel has reacted to this post.
Bel
Have you read the forum guidelines for effective communication already?
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