Writing off legal fees a client will never pay

When a law practice should void, credit or write off an unpaid fee account, how the age analysis helps, and why a partner approves each write-off.

By Achekam · 11 October 2026 · 5 min read · For Legal businesses in South Africa, Nigeria, Kenya

Most unpaid fee accounts in a law practice are slow rather than lost. The client is waiting for a settlement, querying a line, or juggling bills. A few, though, will never be paid. The client has emigrated, the company has been deregistered, or chasing the balance would cost more than it is worth.

Those accounts sit in debtors month after month. They inflate the figure the partners look at and hide the accounts that can still be collected. Clearing them out is not a chore to hand to a junior: each one is a judgment about a client relationship, and using the wrong tool can cancel a correct invoice or understate what the practice earned. Here is how to tell the cases apart and which tool fits each.

Disputed is not the same as irrecoverable

Before anything leaves the books, ask why the account is unpaid.

• The client disputes the account. A disbursement was charged twice, or the fee exceeds what was agreed. That is a question about the invoice, and the answer is to correct the invoice.
• The invoice should never have existed. It went to the wrong client, was duplicated, or was raised on a matter that never proceeded. That calls for cancelling the document.
• The account is right but cannot be collected. The client is insolvent or untraceable, or the balance is not worth recovering. Only this case is a write-off.

Mixing these up causes trouble later. A correct fee written off as though it were a billing error understates fee income. A disputed fee written off without fixing the invoice leaves the client's statement showing a charge the practice has accepted was wrong. Investopedia's explainer on bad debt covers receivables a business expects never to collect and the methods used to estimate and write them off.

Let the age analysis choose the files

Achekam ages receivables into 0-30, 31-60, 61-90, 91-120 and over 120 days, with overdue totals. Use the oldest bucket as the review list instead of relying on memory. A workable routine is for the bookkeeper to bring the over-120 list to a partners' meeting each month with a note on each account: the last contact, any promise to pay, and whether the client still instructs the practice on other matters.

By the time an account reaches that list, the client should already have been reminded. Credit control is on for new Achekam workspaces. Once a day it e-mails overdue reminders and a monthly statement to customers with a balance, by default at 7, 14 and 30 days overdue with the invoice attached, and records whether each e-mail went out. It never charges anyone, and it needs the workspace's e-mail settings to be working, so check those before assuming clients have heard from you.

Void, credit note or write-off

Two rules follow. A void is only possible while the invoice has no payments or credits against it, so a part-paid invoice cannot simply be voided. And there is no credit note without an invoice: a credit note always points back to the document it corrects, which keeps the client's history readable.

A partner approves every write-off

In Achekam an unpaid debt is written off only once a partner approves it. That is the right place for the decision. The partner knows whether the client is worth keeping, whether the matter is still open, and whether there is a professional reason not to sue a former client.

Before approving, the partner should see:

• the invoice and the matter it relates to;
• every receipt and credit already applied;
• the reminders sent and any reply;
• the reason for the write-off in one sentence.

Whether any tax relief follows, for income tax or VAT, is a question for the practice's tax adviser in its own country. The ledger records the decision; it does not settle the tax treatment.

Get part payments right first

Many write-offs are of a balance left after the client paid something. Achekam records a client payment against one invoice or spread across several, shows a part-paid invoice as part-paid, and holds any excess on the client's account. A receipt can be re-allocated if it landed on the wrong invoice, and administrators can refund or reverse it.

Check the receipts before writing off a remainder, or you may write off money the client paid against a different invoice. Afterwards, send a fresh statement of account. Achekam produces it as a PDF that can be e-mailed, and the screen shows whether it was sent. A statement that reflects the write-off avoids a confused call from the client months later.

A write-off policy the practice can adopt

1. Accounts over 120 days are reviewed every month by a named partner.
2. Disputed accounts are resolved with a credit note against the invoice, never by a write-off.
3. Invoices issued in error with nothing applied are voided by an administrator.
4. Every write-off has a partner's approval and a one-line reason.
5. Receipts are checked and re-allocated before any balance is written off.
6. The client receives an updated statement after any credit or write-off.
7. The tax treatment of written-off fees is confirmed with the practice's tax adviser.

The cheapest write-off is the one you never need. A deposit taken before work begins changes the picture, as described in collecting a fee deposit online before work starts, and so does a fee basis the client has signed, covered in getting a client mandate signed electronically.

Put the over-120 list on the agenda for the next partners' meeting, decide each account one of the three ways above, and write the policy down so the following review is quicker.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.