How to Collect Late Payments without Destroying the Relationship with Sunni DiNicola Esq.

Hello, my friends, and welcome to another exciting episode of Negotiate Anything. This show is produced by the American Negotiation Institute, and with over 5 million downloads and listeners in over 180 countries, listeners just like you have made this the number one negotiation podcast in the world. Hi, my name is Kwame Christian, and I am the founder and CEO of the American Negotiation Institute. Here at AI we believe that the best things in life are on the other side of difficult conversations. And we are passionate about providing you with the best content that will help you to make your difficult conversations easier, both at work and at home. Lastly, I want to remind you that we offer consulting and conduct trainings both virtually and in person all around the world. Our focus is in three main areas. First, negotiation and conflict resolution. Second, leadership. And lastly, diversity, equity, and inclusion. Check the link in the description below to learn more about how we could work with you and your team. And now, without further ado, let's jump into the interview. Sunny, thanks for joining us today.

Hi, Kwame. Thank you for having me. I really appreciate it.

Yeah, and I appreciate your patience because this is take two. So for the listeners out there, the first time we did this, the recording didn't work out. So Sunny has graciously given her time again to do this again. So thank you for that.

Oh, no problem, Kwame. I always like talking to you.

Cool. So let's get started by telling the audience a little bit about yourself and what you do.

Okay. I am an attorney in Hilliard, Ohio. My firm is a small general practice law firm, which means we concentrate our practice on general business litigation. I do a lot of domestic family law, which is divorces, custody type issues, grandparents rights issues, some probate stuff. We have a wills and estates team. We have a personal injury team. And so we kind of encompass a lot of problems that could happen with any type of family type situation. And I first started as an associate attorney in March of 2013 and recently made partner of our law firm in May of 2017. And Kwame and I just saw each other on Thursday when we had a little reception for congratulations to myself and Chad Stonebrook, who also became partner.

And that was a fantastic get together with awesome food. My bad.

Well, thanks for coming.

So what made you start to get into this line of work?

You know, it's funny because I was an event Planner for about 10 years and then decided to go back to law school. So I was a little bit older than a lot of my other law school colleagues and didn't have any type of experience in a law firm before When I first started with Lardier McNair, my boss at the time, Darren McNair, was doing a lot of wearing a lot of different hats, and one of them was the family law portion of our firm. And so I kind of stepped in and ended up really falling in love with that area of law, which kind of sounds weird because it's a lot of drama and high stress type situations. But I find that I'm a pretty empathetic person and I really listen to what my clients are trying to tell me and figure out what their goals are to try to help them get, if not the best, you know, outcome for their particular situation, what's really going to be in the best interest of them and their families.

Right. And you know what's interesting is that now that I know you're an event planner, I didn't know that before, I can see how there might be a little bit of transference of those skills. And now as you practice law.

Yeah, absolutely. I mean, I had to be extremely organized. As an event planner, you have to be really organized as an attorney. I mean, as an attorney, you're drafting a lot of documents that as, you know, if you miss, you know, even a comma, it can change the way the Senate structure works. And you have to really pay attention to things like that. And so I think that organization skills of being able to get things accomplished in a timely manner, there's a lot of deadlines you have to do. And as an event planner and also as an attorney, and I think those skill sets that I had learned working in a corporate environment have really helped transfer over to being an attorney.

Very cool. And the main reason I wanted to come on the show was because when we met last month, you said something very interesting, and it was something I've never heard anybody say before, which is crazy. Yeah. Because it's such an important thing. And you said that you actually don't mind doing the collections work for your firm, as in collecting on past due accounts. And so I thought that was fascinating. So I wanted to bring you on to talk a little bit about that and tell us about your approach.

Well, I mean, I don't want to say I don't mind doing it because everybody hates. Everyone hates trying to collect money from people, I'm sure. But I think that the ways that we handle our firm from the beginning make the debt collection part of what we do every day a little bit easier. So I think, like, like the really important thing about debt collection is what you do from the very first time you meet with a client. So, for example, I will meet with a client, and the client says, yes, Sunny, I'd like to hire you to do xyz. I have a very detailed fee agreement that sets forth how I'm going to bill my hourly rate, what type of retainer I get. And we sit down and we walk through paragraph by paragraph of the fee agreement, letting them know, hey, you know, you can fire me client anytime you want. There's two big reasons I could potentially terminate our attorney client relationship, and that would be if you're not current on your bills with our firm, or else if the client lies to me. So I'm very upfront with the fees and the cost, and I will. We can't predict the future, right, Kwame? We can't say this is going to be a winning case or it's going to cost $500 to resolve everything. But if I, you know, I have a lot of experience doing just the family law portion of the law. So I can say, well, in a case similar to this, if it was very, you know, litigious and the parties were not coming to any type of agreement, it was around this amount of money. However, if you and your ex spouse or your spouse can agree on things, that changes the dynamic and potentially, you know, it could be cheaper. So by being really upfront with the clients about the engagement letter and the fees up front, I think that that helps that conversation a little bit on the back end, if you do ever get into the position, which we all do, of having to collect that debt.

Right. And this is one of the things that I think sets you and your firm apart when it comes to beginning the engagement, because you actually take time to systematically go through, step by step, what they can anticipate and the terms of engagement for the representation. And that's huge, because what you're doing is you're setting clear expectations.

Yeah, absolutely.

And I think that's one of the most important parts about negotiation, but I think it's one of the most important negotiations that people often miss if they don't take the time to set those expectations. And so afterwards, when something goes. When you go through it with the representation, maybe things go awry. What is your strategy then? What's the next step once you see that somebody's been delinquent?

Well, I try to head it off at the pass a little bit. I'm really, especially in my line of work, you know, my clients are coming to me because a very stressful situation is going on in their life. They're either in a custody battle or their marriage is ending or their kids are on drugs and they need to get, you know, custody of their grandkids, and they're stressed and they're hurt and they're panicking. I try to keep that in mind when I'm talking to them about, hey, you know, we've been working on your case a lot, and now, you know, I've put in $500, $1,000, and I haven't been paid since my initial retainer. You know, what's your plan? And I try to work with them on what their plan is, rather than saying, you owe me $500. If you don't pay, we're done. Even though I have that in my fee agreement, Kwame, I still like to work with people that are going through a really stressful situation. And maybe it's, I can pay you x amount of dollars on each paycheck, or I'll pay you this amount of money every week. I will work with people as long as they come to me ready to have a plan in place to get caught up on certain bills, things like that.

That's brilliant. I love it. And what's brilliant about it is its simplicity, because oftentimes what we see. And I'm a small business attorney, too, so I see people freaking out about this and coming to me like, hey, Kwame, sue this person. I'm like, there's another way.

Yes, I know.

And you're showing this other way, because what happens is we've reached this point of conflic, and most people decide, instead of using diplomacy, we'll go to war. And this is a diplomatic approach. You're saying, well, let's work something out. Let's negotiate. And when you approach the people like this, what's their typical response?

You know, if you do it early enough in the case, it's, what can I do? I will do anything I can to keep you. I really want the help. The problem is, if you wait until their case is over, you know, there's been some sort of resolution, then it's not as easy of a conversation, because they've already received the services. They don't need you anymore. The need isn't there. And so I have. I have mixed reactions, Kwame, and I have a little bit of different things I do in those situations, which I think is what you and I really talked about the first time we met that you were interested in.

Absolutely, yeah. Let's get deeper into this, because I think this is really where the meat of the matter Happens.

Yeah.

Yeah. I think the timing is key. So what, what type of things do you look for when it comes to timing of this negotiation? Does your company invest in professional development training? If you believe that your team would benefit from a negotiation workshop, all you need to do is go to our website, fill out the workshop request form, and then we'll set up a time to chat. These workshops are completely customizable and we've done them all around the country. Negotiation and conflict resolution skills are beneficial across all professions, but they're especially useful in procurement, purchasing, sales, sourcing, and contract management. Our calendar is filling up quickly and we even have some workshops scheduled for next year if you think you might want one. I'd suggest reaching out soon so you don't miss out. Check out the link in the description to learn more and we will be right back after this.

So one of the things our firm does is we meet once a month to discuss all of our retainers and where we are with our retainers, with clients. And if people have, you know, a past due, counting. And we're religious, like religious about billing. We bill every month. I feel that not a day goes by and I'm already, you know, doing what we call our pre bills. And each attorney reviews our bills before they even go out to, to the client to make sure that they're detailed. A client would rather pay a very detailed bill that says, you know, Sunny worked on drafting document X, Y and Z. She met with opposing counsel for 15 minutes to discuss proposal X rather than phone call. 15 minutes. Our bills are extremely detailed and by billing monthly, Kwame, it makes it so much easier for that client to make those monthly payments rather than they don't receive a bill for five months and then they have to catch up on five months of hourly work. So that timing perspective makes a huge difference when you're trying to collect those past due accounts. We accept credit cards so we don't pass those fees along to our clients. So we just chalk those percentage fees for using credit cards up as a cost of doing business. And we have a secure web portal on our website. Clients can easily pay their retainers and their invoices on the web using a secure site, which, hey, they don't have to call us, they don't have to mail anything into us. It really, you know, cuts down on a lot of time with that. And our clients really seem to like that.

That makes sense. You're removing barriers from getting what you want. That's smart. And another way to put it, and another thing that you do. That's really great is the fact that you are so religious about billing monthly because it kind of ties into what we talked about earlier with regards to setting expectations. If they miss a payment and then you continue like nothing happened. And in your mind, a lot of times what happens is if somebody slights us in some way or fails to pay or whatever, the trigger of the conflict is, we just hope that if we ignore it and pretend like everything's okay, somehow everything is going to become okay.

Absolutely.

But the fact that you and the people on your team are so proactive about this, it's makes it a lot easier to address these problems while they're still relatively small. Instead of, like you said, five months down the road, now you have a big problem.

Yes. Which we can talk about that, too. What happens when you're. When you get to that five months down the road and you have a big problem?

Yeah, let's go ahead. Let's do it.

Yeah. So I think we've talked about some of the strategies that I use, and again, it's not anything I made up on my own. It's not rocket science. But I think that we're creative with how we are going to collect on this past due debt. I'm not a collection agency. Now, I have a personal relationship with you, Kwame. And if you owed me money, it's harder for you to say no to me because you know I did a service for you. Rather than if Bob Smith calls you from XYZ Collection Agency trying to collect on someone's bill. You don't know Bob at all. But you and I have created a relationship, and hopefully there was a positive outcome of services that were rendered. That changes the scenario a little bit. Some of the different things we do are we send out reminder letters. So if people are past due, 30 days more past due, we'll send out a reminder letter. And each of the attorneys we hand write notes on those reminder letters saying, hey, dear Kwame, I hope everything's well and you're doing okay since the last time we talked. You still have this outstanding bill. If you could give me a call, I'd be happy to discuss a payment plan with you or any other creative suggestions you have to get this bill paid. Another thing we do is say you owed me $1,000. I would write you a letter saying, hey, Kwame, if you could pay 750, I'll write off the other $250. So you're getting a little bit of a benefit if you paid it off immediately, rather than owing the entire thousand dollars. So people are really accustomed to doing that. I'll take off a percentage of people's fees. I'll even do it over a course of time. I just recently worked with one of my clients and said, hey, I'll take 30% off your bills if you pay me in three increments in the next month and a half. And he got his bill paid off and he had owed me an outstanding arrearage for probably over a year. But until I went and did that handwritten note to him giving him that option, I suddenly got a response.

I love this. And the thing that's again, so brilliant about this is that you're not utilizing any super complex negotiation strategies or anything. You're making personal connections and you're being, you're willing to be flexible. And the thing is, like you said, once you get to the collection agency level now it's straight business. It's a financial decision for them at that point. But if you take the time to build rapport and actually build a relationship, you can leverage that relationship down the road when it's time to collect. That is a very, very strong technique.

You know what? I think what's nice about it, especially a general practice law firm like mine, is that we have clients that have got into divorce. With me, they did a will with Ben in our office and then they maybe got into a car accident and we're doing a personal injury case for them. So if they didn't like our firm and we were, you know, hard nosed about every single thing we did with them, they wouldn't come back and do other things with us. And a lot of my business is from personal referrals. So someone, you know, people go through hard times in their life and they'll say, hey, do you, did you ever use somebody or do you know anybody? And if they like you, they're going to refer people to you. So I get a ton of business from that. So you. I don't want to, you know, burn that bridge with somebody because you never know how much somebody really liked you. They don't. People don't just write their lawyers letters telling you how much they loved you. We don't get a lot of love letters from our clients though. So the little things that you do, I think, keep you in their back of their mind if somebody ever asks them for a referral.

Right. And this reminds me of one of the central tenets of this book called the E. Myth. E. Myth. It's a really great book for anybody who wants to start their own service focused business.

Okay.

And they also have various different types of that book, different versions. So there's an e myth for attorneys, which is really cool. And one of the points that they make is that what ends up happening is that the majority of the money that we make will come from referrals. But when it comes to marketing, a lot of times people put so much of their marketing money into different types of marketing things like, I don't know, Google, AdWords or things of that nature. But they don't invest in the clients that they already have. And essentially, essentially this. It's almost like a marketing expense. If you're willing to be flexible with your payment plan and work things out with people, you might end up losing a couple hundred bucks for it. But as far as a marketing expense goes, if that person then refers somebody else to you, it was well worth it because you invested into the relationship.

Absolutely. And I think a lot of people, they want to pay their bills, but they're going through a hard time and you just have to make it easier for that person to want to put you at the top of their list to pay.

Right.

You know, a good time to go out, you know, to get some past due expenses is right around tax season because they're getting some money back. So you just kind of gently remind them of that. And it's not about the threats. No threatening here. You know, I'm just. I provided a service and, you know, you had agreed to pay me, and we're trying to figure it out.

Exactly. And people don't like it. Even if you do have the legal and moral high ground, people don't like to feel like they're being bullied. And when you approach them and say, oh, my negotiation tactic is to just run through people, that's not good. You know, it actually reminds me of a story I heard about Larry Bird's sports agent. His name was Bob Wolf, and he said that he would intentionally leave 10% of the value that he knew he could claim on the table because he knew that there was more value in the relationship and people would remember the way that he treated them. He didn't squeeze them for everything he could get. He knew there would be more value if he could come back. And so, yeah, if you approach them in this way, and now I'm seeing the empathy that you referred to earlier shining through. If you approach them in this empathetic way, recognizing that nobody wants to be behind on these bills, there's a reason for that. And working with them at that point, they're going to remember it and appreciate it.

And, you know, that's our hope. And you know, we're obviously in a profession that we're helping people. Right, Kwame? At the end of the day, we're helping people. So you have to keep that in mind when you're, you know, discussing anything. And people don't have millions of dollars to spend on lawyers, but sometimes they don't have a choice. And so you have to be able to work with them as best as you can.

Right. This makes me super excited for our upcoming sparring session because we will, we will see your empathy on display because this will be a.

Okay.

But it'll be really good at test. But yeah, before you go, I want to ask you what is one thing that you think our listeners can do to be more persuasive?

I guess when I'm trying to be persuasive, I always, you know, what's the saying that you can catch more flies with honey or bees with honey or something with honey. But I try to treat people how I would want to be treated. And I know that's kind of cliche, but you're not going to get anything by steamrolling like you said earlier, steamrolling people and bullying people, but persuading them to see your point of view. It's easier if you can kind of read their body language or even read it. You can read people's smiles over the phone or their anger over the phone.

When you talk about reading body language and hearing the smile over the phone, that is a skill set that takes some time to develop. And a lot of times people, especially when they're in a situation like the one we're discussing now where you're behind on an account, they might be saying, yeah, yeah, absolutely, I'll pay you back. But what they're doing is giving you the right answer but really not the real answer. And if you are very attuned to their body language and the way they sound over the phone, you could ask follow up questions that might not follow what they said, but follow the emotions that you hear on their voice. And if you're empathetic, like you said earlier, and you're really, truly listening for the emotions through the body language, they'll tell you. So yeah, I think that's important. But yeah, let's tell the audience how they can get in touch with you if they need any help in the central Ohio area.

Okay. My phone number at My office is 614-534-1355 and my email is sunny s u n n I@lm counsel.com. that's Ellis and Larry. Emma's in Mary. C-O-U-N-S e l dot com.

Perfect. Thank you so much.

Thanks, Kwame.

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