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What is CreditLex?

CreditLex is a tool for lawyers and law firms to report and research the timeliness of a client’s payments to its lawyers. CreditLex allows subscribers to assess upfront, before taking on a new engagement, the likelihood that a new or prospective client will pay as agreed.

Why does it work?

CreditLex encourages for clients to pay legal fees as agreed. Clients with positive payment histories may benefit from reduced or waived fee retainers from other subscribers, while clients with less than stellar payment histories may be identified before a lawyer commences the representation.

What type of information is available on CreditLex?

CreditLex is a clearinghouse for subscribers to report and research whether or not a client pays its lawyers as agreed. As to reported matters, CreditLex subscribers will see: (i) the name of the client and related business entities; (ii) the client’s address; (iii) the client’s key principals; (iv) whether the client has paid as agreed, or other relevant details related to payment or nonpayment (i.e., the number of days late (30/60/90/120/180+), nonpayment of all or any billed amounts); and (v) whether or not the late payment/nonpayment is disputed by the client.

Who can subscribe?

Lawyers and law firms CreditLex was created by lawyers to help address the concerns of fellow lawyers and law firms. Subscriptions are limited to lawyers and law firms only.

Why was CreditLex created?

To allow lawyers to make informed judgments about the credit worthiness of new and prospective clients before committing to undertake the representation. Armed with this information, lawyers will be positioned to make decisions about which business, non-consumer clients they accept, the size of the retainers they need, and the risk of late or nonpayment.

How does it work?

Subscribers make and view reports on a business client’s payment history (paid as agreed, or 30,60,90, 120, 0r 150 days + past due) nothing else. Subscribers can search the CreditLex database to see if a potential new client has adverse reports on the filed on the system, allowing the subscriber to avoid the client or accept the engagement with appropriate safeguards. Subscribers can also note if a client pays as agreed. If after the completion of an engagement you wish to make an adverse report on a client’s payment history, simply click on the button that says “File a Report”, and complete as many fields as possible. The more detail you add, the better.

Why subscribe to CreditLex?

CreditLex allows subscribers to: (i) view the positive and negative payment histories of new or prospective clients in order to assess the likelihood and timeliness of payment; (ii) determine upfront, whether to require a retainer and at what size, or whether to structure alternative payment arrangements; and (iii) provide an incentive to clients to pay as agreed, without resorting to litigation or other more intrusive remedies.

What types of matters are reported to CreditLex?

Reports made to CreditLex will be limited to client payment histories related to business, non- consumer, non-household legal engagements, such as commercial litigation, commercial transactions, and other similar commercial law engagements.

Links to the ethics opinions permitting the CreditLex system are here:

  • District of Columbia
  • Florida
  • Virginia
  • Texas

CreditLex expects to add more states over the next several years.

Can clients dispute reports filed with CreditLex?

Yes! Clients have the right to dispute reports at the time the reports are filed, and any time thereafter. Client disputes will be noted on CreditLex and cross-referenced against any reports that are filed.

Why Should I join CreditLex now?

Because you'll gain a valuable tool to negotiate retainers with new clients, and to settle unpaid invoices with existing clients. Doctors, engineers, accountants and other professionals don’t work for free. Why should you? By joining CreditLex, you will become part of a growing list of attorneys who seek to control write-offs and reduce bad costs. CreditLex give lawyers a tool to help determine, before taking an engagement, whether business clients pay their lawyers as agreed, or whether that new client or matter would be best handled by another lawyer or law firm.

Do I need CreditLex?

Yes!. As most lawyers know, client payment histories must generally be kept confidential. This means lawyers have limited means to screen a potential client’s credit worthiness as it pertains to the payment of legal fees. Recognizing this problem, the attorneys at CreditLex have worked with the Ethics Committees of several state Bar Associations (more are on the way!) to devise an appropriate method for lawyers to report and research client payment histories within the scope of applicable ethics rules. CreditLex is the result of these efforts.

Isn’t a client’s payment history confidential?

Yes!. But by joining CreditLex, however, you will have access to a form of waiver that has been reviewed by the Ethics Committee in your jurisdiction. In keeping with ethical standards, CreditLex subscribers must treat the payment histories in the database as confidential information, affording it the same protection given to any information received from an existing or prospective client.

Why is CreditLex important to my law practice?

Reports filed on CreditLex relate only to the payment of legal invoices, nothing else. As such, CreditLex will be instrumental in helping you to determine the payment risks associated with accepting work from a new or prospective client.

Wouldn’t I be better off keeping collection problems to myself?

No!. Collection problems affect business lawyers and law firms of all sizes, across all practice areas. It’s time for lawyers to stop pretending we don’t all have bad debts. By reporting delinquent clients to CreditLex, you will help level the playing field, and arm your fellow colleagues with the vital information we all need to make informed decisions, before that new client becomes a problem.

Do I report the amounts owed by a particular client?

No. Becuase your rates are proprietary, CreditLex will not accept reports of pricing or fee schedules (including the amounts of any unpaid invoices). Rather, reports of negative payment histories will simply indicate whether a payment was past due (e.g., 60, 90, 120, 150, 180+ days past due) or, for current clients only, whether the client “pays as agreed.”

Is CreditLex a collection agency?

No. CreditLex is not a collection agency, but rather a member-generated database of client payment histories that will allow subscribing members to make an up-front determination about the likelihood a given client will pay as agreed, before committing to the representation. CreditLex will neither undertake collection efforts of any kind, nor will it allow collection agencies to be members.

How do clients benefit from CreditLex?

CreditLex promotes clear communications and expectations regarding payment, thus helping to avoid payment disputes later on. Clients who pay as agreed may derive significant benefits from reports of their positive payment histories (i.e., favorable payment histories often result in reduced or waived fee retainers, and reduced billing rates).