A recent article, Overbilled by Your Lawyer? You’re Not Alone, told the story of a lawyer whose firm touted expertise that she didn’t yet have and billed for time that she didn’t work. That story led to an e-mail captioned “Bravo” from Professor Nancy B. Rapoport of William S. Boyd School of Law, University of Nevada, Las Vegas.

Collaborating with Joseph Tiano, the founder and CEO of Legal Decoder, a legal data analytics company, the pair have written extensively about the reasonableness of attorney fees as well as on using time entries to predict risk factors for legal malpractice.

“Your story is a client’s nightmare,” Rapoport observes, adding, “but most lawyers do their best to serve their clients fairly and do not engage in that type of unethical behavior.”

Both lawyers proceeded to list five things clients need to carefully notice about any bill they get from their lawyer and what to do when something appears to be not right.

1. Did the right level of professional work on your matter?

Rapoport: The retainer agreement — the contract that you sign with the law firm — will state who is going to work on the case. For smaller matters, this usually means one lawyer. For larger cases, there could be several attorneys and paralegals. Generally, each one of those people has an hourly rate, unless you signed up for a fixed rate or other alternative billing arrangements.

Partners are the most expensive, while paralegals are the least expensive. Not every task has to be performed by a partner. Make sure that what’s done is performed efficiently by the person with the right skill level. Partners don’t need to be doing basic legal research, and associates (newer lawyers) don’t need to be the ones drafting complicated documents from scratch. Read the time entries and get a feel for who did what for you.

2. How many people in the office worked on your documents or appeared in court?

Tiano: In larger matters, there’s a tendency for several lawyers to handle a document — often far too many than can be justified. Or maybe there’s a big hearing coming up in your case. How many people attended? One? Two? Ten?

There should be a unique reason for each person “touching” your matter to add input or expertise. Don’t be afraid to ask what they did, because all of those people are “contributing” time at their individual hourly rates. In the end, the “reasonable” fee analysis partly hinges on the unique, independent value delivered by each legal professional.

3. How specific are the descriptions in the time entries on your bill?

Rapoport: Clients are entitled to know who did what and how long that “what” took. If someone just “worked on” your matter, you can’t possibly know what was done. Did they draft something? Edit something? Negotiate something? “Worked on” and “attention to” are meaningless phrases.

Make your lawyers use verbs that tell exactly what they did so that you can evaluate the reasonableness of the fees. This should not come as a surprise to anyone.

Every state has an ethics rule that requires attorney fees to be reasonable, so before you can decide if the fees are reasonable, you need to know what the lawyer(s) really did.

4. Did those time entries break down the time spent on each task?

Tiano: How much time did each task take? If you see “prepare for and attend” or the like, ask, “How long did the preparation take? How long were you there?” If lumped together, you have no way to evaluate if too much time — or too little, or just enough — the lawyer spent on “preparing” vs “attending.”

Judges typically won’t let a law firm “lump” those fees together (a bad habit also known as block-billing). You shouldn’t either, and if the law firm can’t recall how long each of those sub-items took, a discount is often requested and warranted.

It’s the lawyer’s job under ethical rules to tell you what was done, so any mistakes or ambiguities should be borne by the lawyer and not you.

5. Did the law firm use artificial intelligence to speed up routine tasks?

Rapoport: AI can be designed to automate certain routine tasks and to speed up other, less routine tasks. But a lawyer must be responsible for the work product generated by AI.

When it goes wrong, “hallucinations” (wildly incorrect results) can occur, and only a trained eye will be able to spot them. Lawyers must embrace technology that lets them spend less time on things that computers do better than humans do so that they can devote more time on the things that only humans do well.

At least one court we’ve seen has reduced a legal professional’s fees based on the failure to employ AI tools.

If you see a time entry that indicates that an associate has spent days looking for a particular type of clause in a contract, ask, “Why didn’t your firm use AI, which would have found that clause faster?” And then ask for a discount.

Remember math problems in high school?

Concluding our interview, both attorneys suggested that we recall our days in high school geometry when we had to “show our work.”

“Requiring lawyers to show theirs is just plain common sense,” Rapoport said, “and in so doing, you’re more likely to be paying a reasonable bill.”

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A common complaint — especially from small-business owners — is the failure or refusal of their customers or clients to pay their bills on time, or pay them at all.

I submit that a certain amount of this, sadly, is encouraged by owners. Here is a recent example:

“Wonderful Tree Trimming and Landscaping” is a mom-and-pop company in my town.

“Marge” runs the show, and she is the nicest, most patient business owner you’ll ever meet. And that’s the problem. She is way too nice, too patient and non-confrontational to a fault.

I got a call from her office manager, asking if I can help them with several past-due accounts.

“Of course,” I reply. “How old are they?”

“Only two years.”

“What? Only two years,” I repeat in a less-than-happy tone of voice. “What were you folks thinking?”

“Well, Marge likes to be patient and nice to people.”

“I am not. Please scan and send me the bills now!”

Not paying for services rendered could be fraud

Without legal justification, an intent not to pay can be inferred — like dine-and-dash restaurant rip-offs — as fraud and theft of services. This can justify an award of punitive damages.

Notes on their accounts revealed textbook examples of fraud and theft of services by people who agreed to pay for the tree trimming but offered one nonsensical excuse after another, made repeated promises to pay but never did or contested their entire credit card charge.

I reached one of them and asked that he bring a check to my office. He replied, “Money doesn’t grow on trees.”

My response in a most unfriendly tone of voice was, “I am going to enjoy suing you for the tree trimming and punitive damages for your obvious lack of intent to pay.”

Soon thereafter, Marge texted: “Whatever you did worked! He called me around 2:30 p.m. and brought us a check by 3 p.m.”

Strong office manager/collections person, good

In my experience representing small-business owners, patience is not a virtue. A strong office manager/collections person who you authorize to immediately jump on past-due accounts is critical.

Often crooked customers say, “I never got your bill, so please mail another.” If possible, fax the bill to them. This gives you proof of receipt. If you are in the same town, go to them and politely hand a copy to the customer or, a receptionist.

Online recommendations suggest being sugary sweet on the phone to past-due customers.

I disagree. The customer who, without justification, doesn’t pay, is a thief, and the sooner you and your people recognize and accept that, the better.

So, the payment is past due, was promised to be received by a certain date, does not arrive, you have one option: Call and say, “No more delays. We will pick up a check at your office today, and if it isn’t there, this goes to our lawyer, whose nickname is Mad Dog.”

But why even put yourself at risk of being jerked around by an unknown customer?

Check your court’s plaintiff/defendant index to see if a potential customer has been sued and for what. Require a signed credit application that will allow you to check their credit and find out if they’ve gotten in trouble before for not paying.

Convince customers you aren’t serious

Want to be stiffed? Convince your customer that you aren’t serious, and I hear this all the time: “We’ve been sending them past-due notices every month for a year, and we thought that would scare them into doing something.”

They did something all right: They ignored you.

If the first letter or phone call gets no response, consider having your lawyer place a call and send a demand letter. That should be very inexpensive. Still no response? If you are within or close to your small claims court’s monetary jurisdiction, file suit.

Action earns the respect of employees, customers

“When business owners give collections the attention needed, this earns respect from employees. And, no matter how well you pay someone, respect and loyalty have no price,” observes David Schein, Cameron Endowed Chair of Marketing & Management at the University of St. Thomas in Houston.

“I tell businesses to have a one-two-three approach to collections,” he says. “Send invoice within 30 days. If not paid in 60 days, send letter with overdue invoice indicating that it will be turned over to your attorney if not paid promptly. At 90 days, turn it over to your attorney. Many of my businesses get paid with that 60-day letter.”

In case you wonder, “Dennis, how do you personally feel about these situations?” I’ll tell you. Angry, and I share the feelings of my clients who have done the work, performed the service and been ripped off. To treat people that way, in addition to a breach of contract, is simply immoral.

Collecting those debts gives me a great deal of moral satisfaction.”

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It is more than the American dream. Many would say that it is our birthright: starting a business.

“Regardless of what kind of business,” observes Bakersfield-based CPA Michael Stevenson. “The risk of failure should always be kept in mind along with a large question mark: ‘What, if anything, could I be doing wrong? What have I missed?’”

Answers spell Success or Failure

Agreeing with his colleague, Dr. Di Wu, department chair associate professor of accounting at California State University, Bakersfield, strongly maintains, “It is critical to know what takes a fledgling business down the road to failure.”

And that is what we’re looking at in today’s story: How business owners cause their own downfall by failing to see these issues.

Wu: Believe all the supportive statements from family and friends about your product or business idea.

You will almost always hear more compliments from those people close to you about how your product or service idea is a sure thing. But feedback from the general population could easily be much different and pertinent.

Stevenson: Rush into market with your great idea or product without seeing if anyone else is already doing it or has a patent on it.

There are very few things in the world that someone else isn’t already doing. For example, a client had a great software idea and rushed into marketing it only to discover that another person held a patent on the same exact type of software, so thousands of dollars were lost because of failing to do something as simple as a Google search to see if a similar product was already on the market.

Additionally, merely having a patent does not guarantee that you are the only one who can produce or market a product. Your patent is only as good as your ability to defend it. So, if you do not have the financial resources or the ability to bring legal action, you really can’t defend that patent.

Wu: Know your limitations! Don’t be a cheapskate!

When you get out of your area of expertise, hire people who have the competence and ability to give you what you need. For example, if you are going to bring in a partner, retain a lawyer to draft a partnership agreement tailored to the needs of your business – don’t just grab something you find on Google or do it yourself! You may wind-up spending more later for a fix.

Stevenson: Success can be a curse that leads to lifestyle creep which can destroy your business and all you hold dear.

Accountants far too often are witness to what happens when a business – or a professional lawyer, doctor and even a CPA – becomes tremendously successful, generates lots of cash flow and embarks on a spending spree!

They go from Top Ramen in a studio apartment to buying a mega home, expensive toys, weekends in Las Vegas or similar venues and begin to associate with people who are more well off than they are, and think:

“Well this guy has a 32-foot fishing boat. I want a boat!” And they buy one – which later gives them a sinking feeling as their spending reaches a point where the enterprise can’t generate enough money to sustain this lifestyle creep.

So the owners start to borrow against the business to sustain the lifestyle; their business is neglected, which left unchecked can result in failure of the business, bringing down families with it.

Wu: Fail or refuse to live well under your means.

Economies are never stable. Just look at the Great Recession of 2008 and what we are facing at present. Families and small business owners who spent every last cent they earned faced certain trouble then and will now.

Those who lived well below the level of their income – maintaining six months or more of income in a savings account – are able to weather these storms and not worry about putting food on the table.

Stevenson: False economy! Get in tax trouble by treating your employees as independent contractors.

A sure way of getting in serious trouble with the IRS and state taxing authorities is to treat your employees as independent contractors, thereby not paying the employer’s share of employment taxes, workers compensation insurance and other fees.

This may result in significant payroll tax savings until the employee walks into H&R Block to get their taxes done and hands them a 1099-NEC “Non-employee Compensation” form from the employer. Then the H&R Block employee says, “We are filing your taxes as an employee so you get back another $5,000.”

The result is that the employer is red-flagged by the IRS and can wind up being audited and assessed back payroll taxes and penalties exceeding 100% of the back taxes resulting in the possible loss of their business while the assessment is still owned by the business owners even after bankruptcy.

Stevenson: Inviting family to participate can be asking for trouble.

Family complicates things and generally family members believe they should participate in the success of a business equally if they are employed while unrelated people generally do not have that expectation.

If you are going to include family in the business it is important to set expectations and boundaries up front to mitigate the potential for issues down the road. Do not forgo controls over cash or product simply because your employees are related to you, too often we see fraud in business regardless of familial relationships.

Where to get sound advice before you launch your own business

So, how can you avoid these pitfalls? “Spend time – at least six months -learning how a business functions,” both Stevenson and Wu strongly maintain, and feel that, “the Small Business Development Centers located around the country are a great resource.”

“Also, a basic course in accounting is so beneficial,” Stevenson points out.

Taking a course in business law that is offered at just about every college in America, in my opinion, is absolutely essential.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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March 16, 2026  • By Dennis Beaver

Once upon a time in a galaxy far, far away, e-mailed invoices became common, and business leaders, CPAs with calculators and company owners rubbed their hands together with glee.

“Just think of all the postage we are going to save. Time to break out the bonuses,” said one recent MBA graduate.

“Not so fast,” said his father. “I foresee real problems.”

And, as is so often true, Father knew best.

‘Before email billing, we never had a problem’

“Mr. Beaver, my wife and I are retired university journalism professors who moved about 100 miles away from the college town where we taught, but remain ‘news junkies’ and subscribe to several newspapers and magazines that are delivered by a third-party delivery service.

“This worked out very well for years — until just a few weeks ago, when we got a rather sarcastic-sounding phone call from a collections office, asking when we planned on paying the many-months-old bill for newspapers,” the email from “Nick” began.

When he called them back, he said he asked, “‘What are you talking about?’ Implying that we are thieves, Miss Friendly said that we had not paid the newspaper delivery service for all of 2026.

“Let me research this, and I will call you right back,” I told her, but she’d already hung up. “We looked for the invoices and could find none for 2026. I called the company, and they said they’d gone to an email-only billing system, though they did not notify customers. We looked in our spam folder, but we saw no bills there.

“I had them mail those bills, which we immediately paid. In talking with neighbors, we learned they also use that delivery service, and several had had the same experience.

“We still receive our utility, credit card, health insurance, life insurance and most other monthly bills the old-fashioned way — by the U.S. Postal Service. Can you explain why so many other merchants and vendors seem to be too cheap to pay for postage and are willing to subject their customers to accusations of trying to avoid paying their bills?

“What can the average person do to prevent this embarrassment and waste of time?”

When did email invoicing become common?

Over the past 15 to 20 years, email has become the way many businesses send customers their bills. This shift began in the mid-2000s as companies moved away from fax machines and snail mail. By the 2010s, most industries relied on emailed PDFs as their primary billing method.

While email invoicing is fast and inexpensive, it also introduces risks that some consumers and small businesses do not fully understand. And to the thousands of folks who are ripped off by invoice scams, this is the very definition of “penny wise and pound foolish.”

Several stages leading to trouble

There were several stages as email became mainstream for many business communications, including billing.

Stage 1 (late 1990s to early 2000s). As PDFs became a universal format, many companies, most commonly tech or cost-conscious businesses, began attaching invoices to emails instead of mailing or faxing them.

Stage 2 (the mid 2000s). Emailing invoices became the norm for many small and midsize businesses. Cloud accounting platforms (QuickBooks Online, FreshBooks, Xero) even made “email invoice” a default selection.

Stage 3 (the 2010s). Most industries had shifted to email invoicing as the standard.

Stage 4 (the 2020s). Many countries now require electronic billing for tax compliance, fraud mitigation, transparency and the reduction of paper use.

Common problems caused by email invoicing

Emailing invoices has, from what I have seen, created far more problems — and ripped off more people — than using the U.S. Post Office ever has. When was the last time that, when opening your email, you did not find a fake bill for something you never ordered?

These are a few of the more common problems caused by emailing invoices:

Spam filtering and lost emails. Invoices often land in folders for spam, promotions or junk mail. Also, some firewalls block attachments entirely, resulting in customers never seeing the bills to begin with.

No proof of delivery or confirmation that the email was opened. Most inboxes provide no proof that the recipient opened or received the invoice. Optional “read receipts” are often disabled. This can create “we sent it” vs “never got it!” payment disputes.

Also, if duplicate invoices are sent, customers could pay the bill twice.

Fraud, spoofing and phishing. Email is a major source of invoice fraud. Customers receive emails that look like they’re from someone they do business with, but if they click on the attachment, their private data can be compromised.

Security and privacy risks. Email is not inherently secure, and sensitive financial data may be exposed if emails are forwarded improperly.

You want the bill mailed? You have that right

Businesses generally have no legal right to insist on emailing your bills unless you previously agreed to electronic-only communication — for example, by signing a service agreement that specifies e-billing.

The billing method is a customer preference, not a legal requirement. You can choose how you want to receive a bill.

Paper billing is still a standard practice for plumbing, HVAC and electrical work.

I must underscore that many automatic e-billing systems have a “deselect e-mail and use the U.S. Postal Service” feature. You just have to look for it.

I would also recommend sending a short, polite request that says something like, “Please send invoices by the U.S. Postal Service only. Do not email billing documents. Also, please update my customer record to reflect this preference and confirm that future billing will be sent by mail only.”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Snail Mail vs Email Fail: How E-Billing Has Led to Missed Payments and Fraud Risks (What Can You Do?) appeared first on Dennis Beaver.

Our article “Buying a Business? Get Proper Help,” was based on my interview with Josh Tolley, a nationally syndicated talk show host and author of recently published, Acquisitional Wealth.

Tolley’s message: Given the high risk of failure a new business faces, purchasing an established, profitable enterprise is often far better.

His advice touched a nerve.

“The idea of buying a business never occurred to me,” so many readers said.

Hanford business attorney Ron Jones, who has been a friend of this column for many years, sent a list of important “due diligence” questions that anyone thinking of buying a business must have answered.

“Why not run these by Tolley?” he asked.

I did. He was happy to answer Ron’s questions.

‘Be curious, but don’t let the naysayers frighten you away’

“When buying an established business or going out on your own, it is important to be curious and get answers to tough questions. However, when you repeatedly hear, ‘Yes, but what about these things? Did you think about these issues?’ do not let yourself become frozen with fear.

“Yes, there are many valid objections, but too much doubt, and a failure to realize that every business will encounter problems, can wreck motivation and creativity.

“So use your common sense when told, ‘No, this isn’t a good idea.’ Perhaps it is a good idea, so obtain advice from several, knowledgeable sources and be alert to those jealous of your efforts to grow.”

1) How much knowledge and experience do I need to qualify for an SBA loan?

You do not have to know everything. If you apply for an SBA loan, they want some relatable experience, but if you are buying a plumbing company you don’t have to be a plumber. You do need some experience in management, with the trades, something relevant where the SBA will feel comfortable issuing a loan.

Also, this would be satisfied by elevating someone currently employed by that business to management so the SBA sees a person with experience in charge of the operational side of the business.

2) Should I be concerned about existing competition or new competitors coming into town?

Absolutely! These questions are an important part of the vetting process where you are examining the business and its possible liabilities including new competitors.

A public records search on the location is critical. For example, if you buy a restaurant, is your city looking into ripping up the road, laying new water and sewer pipes, preventing access, which could destroy your business?

Is a labor union involved? Do they have any say in an acquisition? Is there a franchise agreement — that the seller hasn’t looked at for years — where corporate requires it to be offered to them first? This is why business buyers and sellers never should do this on their own.

3) Do you know where to order supplies, parts, inventory, and like items? Does the cost vary with time or the time of year? Who can help prevent you from being taken advantage of by vendors?

If done correctly in the due diligence process, not only will you get that information from the sellers, but they should remain with the business for six to 12 months for that very purpose.

When a finance company puts up the funds, typically they require sellers to stay at least six months.

4) Have you carefully reviewed the company’s books? Do you understand what you have read? Are these audited reports or just the seller’s chicken scratches?

There are several types of financials. Some are created by the business owner and:

(A) Professionally compiled financials;

(B) Adjusted financials — adjusted from the seller’s perspective (add-backs, credits, debits to get a more accurate picture.)

(C) An analysis of price, value, and worth.

Too often buyers focus on the price of an acquisition, rather than its value or worth.

This is where the concept of goodwill enters into the equation which can be manipulated to distort the selling price. So different are price, value and worth, a business that is losing money on paper — priced at next to nothing — could be worth a small fortune to the right buyer, especially when its inventory has great value in itself.

Combatting Social Media Insta-Experts

Tolley is deeply concerned about the “Insta-Experts” who appear on social media, appealing to people desperate to get into business and then “selling them thousands of dollars of often plain worthless guides and business plans which lead to horrible financial carnage and families on the rocks.”

To combat this, his organization is holding eight-hour, free seminars, around the country, explaining how mergers and acquisitions work and what you need to know before investing in a business.

More information can be found at Joshtolley.com or acquisitionalwealth.com. If his seminars come to my town, I’ll be in the first row.

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

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