Academy of Chiropractic
Doctors PI Program
Office Systems, Admissibility & Get Paid #38
From the Desk of :
Mark Studin DC, FASBE (C), DAAPM, DAAMLP
"Lawyer's Lien Formula"
NOTE: If you have taken the shortcut and bypassed reading the required consultations, DO NOT EXPECT THIS to be the “magic potion” in getting paid. It takes training on HOW TO DO IT PROPERLY. THIS IS ONLY 1 PIECE OF THE PUZZLE
Getting paid on liens is the #1 question I get from new clients because historically, lawyers have abused the chiropractic profession by "cutting our fees". The "Cut du Jour" nationally is 50% because that is what lawyers have been getting away with. NO MORE! Also, it appears there is still confusion on how to approach the lawyers in maximizing your reimbursement without damaging your relationship with the lawyer.
As you have read, or should have previously, I recommend that you do not take more than 1/3 of the settlement. When I say settlement, that in others, means reducing your fee. There are always extenuating circumstances and sometimes it feels like that happens in every case. However, you have to get a little tough with the lawyer, and remember their allegiance is to themselves first, their clients second and you are far down on the list, as a rule.
Here is the procedure and it is simple, clean and easy. You will never take more than 1/3 of the settlement. However, in order to take a reduction in your fee, the lawyer must send you a copy of the settlement and all disbursement checks. If the lawyer wants you to take less than the 1/3, you will do so only if THE LAWYER takes less than their 1/3, and this is done with verification of checks and a formal disbursement sheet. Here is where your documentation takes affect. Lawyers have a legal ethical constraint to NOT release this information without their clients giving "expressed permission" to release this information to you. If you have done a compliance review, I will have certified that you are using the correct documentation to allow the lawyer to release the settlement information.
Here is your Mantra; You are a team player, not the martyr in the relationship. The lawyers usually are not happy to be asked to take their own reduction. Either are you and without you consenting to accept the lien amount they are typically NOT allowed to distributive money to anyone giving you leverage in the negotiation. Regardless of the laws, you can always sue the patient for your fees, and that is a fact I would 100% let my patient know. Their lawyer is being unreasonable, and you will be taking legal action against them because of their lawyer's actions. Do not hesitate to put your patient in the process. Remember, you are being asked to take less so they can take more with the lawyer.
In my own case last month, I had a lien for $23,000. This was an unusual case, as the majority of my liens have been for $3,000-4,000. This particular patient was in bad shape and my office treated her for 2 years. The lawyer offered me $10,000 and expected me to jump for joy. I informed him that it was not a good offer and that I would not take less than 1/3 of the settlement. The lawyer then informed me that his client would never approve of more money and if I was smart, I would take the amount offered. I asked to see the settlement check and the disbursement sheet. The lawyer informed me that it would be an ethics violation to do so. My answer was "the patient signed documentation giving me irrevocable permission to receive all information." The lawyer said it would never happen, that the client had no assets and in the end I would have to sue the patient, get a judgment and not be able to recover any money. Therefore, if I was a smart doctor, I would take the money and run.
I thanked the lawyer for his advice and told him that if he disbursed any money to anyone with my valid lien in hand, and didn't satisfy the lien, than that I would report him to the State Bar Licensing Board for an ethics violation. I was also willing to wait and not get paid now. I acknowledged that the lawyer had a responsibility to represent his client’s interests first. However, I had a responsibility to represent my interests and I was willing to work with the lawyer if he was willing to work with me.
He understood and we kept the conversation very respectful. The next day he called me back and said his client gave permission to share the disbursement sheet, as she wanted to get paid, and the settlement check was for $40,950. Therefore, I told him that I would take $13,650, as 1/3, and nothing less. If not, I would not accept a reduction of any kind and they would have to take this case to court and try to get more money to satisfy everyone’s needs. The next day he called me to say his client agreed and I received the check within 2 days. The moral of the story is that you work hard and there are costs associated with caring for your patients and you are entitled to get paid a fair fee for your services.
This scenario is typical and one I handle almost on a daily basis with doctors nationally. Most of the time, the lawyer pays within the formula, provided you have your paperwork handled.
Be smart, be flexible, but get paid. If you have a great relationship with a lawyer, let them know up front what your policy is regarding settlements, but also let them know that you are flexible. Sometimes you expect your full fee and other times you are willing to walk for nothing if it is for the right relationship. Remember the 6 P’s.