I am hearing from all over the country about what appears to be an ever increasing problem in the delay of payment of professional fees or, worse, people expecting services for free.
Is it the state of South Africa’s economy that is causing this problem, bad management or deliberate actions? Probably a combination of all three, but whatever the reason, it is not acceptable. When I was in the UK I saw similar problems, although the Government did take some action by guaranteeing prompt payment from all government departments. Can you imagine that happening here when it is the government departments and entities that are more guilty than most?
All businesses need payments from clients to sustain, grow or protect the business and of course, it is often SME’s that suffer most. There is an old saying in the legal world that a good client is one who pays and of course that is a truism.
Looking at a typical case in my field of eDiscovery, service providers are usually engaged by the law firm on behalf of their client, as of course are Counsel and any expert witnesses etc. Already you can see a chain emerging when it comes to payment for services provided. There is no problem at all if the end client pays its bills to the law firm each and every month and, in turn, the law firm pay the rest. But, what happens if the client does not pay on time or has extended payment terms with the law firm? The truth is that the service providers and others suffer through no fault of their own unless the law firm pays, even when it has not received payment from the client.
What happens if the law firm says it will not pay until the client pays them? This is a really tough one because if it was taken to the conclusion whereby the client never paid, then the service provider would never be paid which cannot be right on any view. The law firm contracts with the provider and others and unless there is an agreed clause about payment not until the client pays, the responsibility, legally and otherwise, lies with the law firm.
Of course, some say they charge a penalty percentage after a certain amount of time, which ensures payment. I do not believe that works. From a service provider viewpoint there is a much stronger deterrent for us in that we host data for the case and we can always turn off the tap. No service provider wants to do that but what choice do we have when we are being charged (usually in USD) on a monthly basis and we cannot defer payment to the software supplier?
As I mentioned I am hearing more and more of these issues across the country. I can say that we at Harrisons eDiscovery Consulting (Pty) Ltd have had one unfortunate experience in this regard. I will not “name and shame”, but a Member of the Bar engaged us to do some urgent eDiscovery technology work for him on a case that involved him personally. We worked at the weekend and saved him an enormous amount of time in reviewing, and de-duplicating emails and attachments. This work was done in November 2022 and we have still not been paid – he cites “awaiting payment of fees from Attorneys”. The amount involved is just R6000. Furthermore, Waseema Harrison was called as an expert witness by the NPA on a matter and, after 2 months, is still waiting to be paid for her attendance.
These are just small personal examples but is there an overriding bigger picture here?