Wednesday, January 20, 2010

Curmudgeon angry at being played for a chump

I go through a cash flow crisis at the beginning of every calendar year. I practice law as a corporation for tax reasons. And to maximize that tax advantage, my accountant tells me I'm supposed to drain my corporate account at the end of the year.

I did this -- incorrectly -- for several years and wound up paying corporate income tax in addition to my regular personal income taxes. I think I figured out my error last year -- at least I didn't have to pay a corporate income tax last year -- and I did everything the same way this year.

What this does is make January tighter than usual... and it's always been a pinch.

The "extra" that I took out in December is long spent on January bills and there's still a sheaf of them awaiting payment, both here at the Undisclosed Location and at home. Technically, my business checking account is in the red -- but only because I can't yet cash an income check on which my withholding taxes have been duly paid. My personal checking account is just about zeroed out, too. My bank will hit both accounts with penalties this month for dipping below the required minimums (another proof of the fact that it costs more to be poor in this country than to be rich).

And -- if you've stayed with me this far -- isn't this just the sort of self-indulgent whining that the Curmudgeon does every year?

Well... yes... and no.

For years, I'd get depressed about "my" failures -- "my" inability to maintain a reasonable cash flow.

But this year it occurs to me that I have two clients that, between them, owe me $28,000, all of it more than 90 days billed and some billed more than six months ago. (No, I'm not currently doing anything for either of these clients.) I always have receivables, but this is an unusually large amount. It helps me realize that "my" failures aren't mine alone.

When the client is desperate, it's all full steam ahead and damn the torpedoes! But when the crisis is past, and it comes time to settle accounts, the client is all excuses. Or simply invisible.

I can't repo the services I provide the way Ford can take back a car when payments are missed. I can't foreclose. I can sue... and invite a counterclaim for malpractice -- not because I've committed it, but because deadbeats know that it's a great way to bring additional financial pressure on lawyers. Not only do malpractice insurers spike rates for for lawyers who try and collect their fees (if they agree to renew at all), they require lawyers to pay the first x dollars of their own malpractice defenses. I have a very small retention on my malpractice policy -- as these are measured -- but $5,000 when you don't have $500 might as well be $5,000,000.

So I'm angry, not depressed at this point. (OK, I am depressed. But I'm not just depressed.)

And now I have to undertake a big project for another client -- a client who was, until just a couple of months ago, a very good pay.

Since then, though... nothing. And I'm worried that I'm throwing good time after bad in undertaking this project. Which makes me even angrier.

This pending project is one reason why posting will be sporadic and blog visits will be limited in the next week to 10 days. I have to work through this.

5 comments:

Patti said...

My cash flow crisis lasts year round, ha!

but seriously I do feel your pain at being taken for granted.

Empress Bee (of the High Sea) said...

you know this stinks. i am good friends with the attorney i used to work for and his business is in the pits, palm beach real estate. he has laid off paralegals, secretaries, attorneys, and is still trying to keep his head above water, but nearly drowning. it makes me really sad that some people that work so hard have to deal with this. i am really sorry.

smiles, bee
tyvc

Empress Bee (of the High Sea) said...

you know this stinks. i am good friends with the attorney i used to work for and his business is in the pits, palm beach real estate. he has laid off paralegals, secretaries, attorneys, and is still trying to keep his head above water, but nearly drowning. it makes me really sad that some people that work so hard have to deal with this. i am really sorry.

smiles, bee
tyvc

shell said...

Damned if you do (try to collect), and damned if you don't (forget collecting the money). Urgh.

What would happen if you sell the account to a collection agency? Is it prohibited in Illinois?

Shelby said...

that stinks. Get up. Go to work. Do the best you can. Hope for the best. Expect the worst. Take it as you can.

That's all I got.