How to Use a Legal Network Effectively in your Collection Strategy

Having the right legal network in your collection strategy can mean the difference between success or failure in your collections efforts.  With a downturned economy comes the need to find new and improved ways of collecting on unpaid debt and there is no better way of learning these than through working with a legal network of collection professionals.  The words of Ken Blanchard—renowned author, speaker and global leader in leadership training—certainly ring true in this business: “None of us is as smart as all of us.”  

Finding a nationwide legal network of professionals and attorneys in the industry will make your collections practice an evolving one—one that is aware of new industry trends and new approaches to successful recovery methods.  You will learn from each other and obtain valuable insight from collections professionals who will become trusted mentors.  These professional relationships will help grow your business and solidify its success. 

A legal network also adds that added punch to your collections attempts, encouraging delinquent customers to pay more quickly due to the multiple attorneys backing up the claim.  Everyone wants to avoid litigation (including you) and having a legal network on your side helps make your collection attempts more “pressing” to the average consumer who fails to pay their bills on time. 

Additionally, a legal network will be able to help you handle a wide variety of collections endeavors that might not be easy for a traditional debt collection firm to handle.  These include contracts, international collections, insurance subrogation, PPO claims and HMO disbursements, commercial/retail collections, and high technology accounts.  Legal networks also provide the necessary resources for skip tracing to find contact information for accounts in which the holder has moved or changed phone numbers and jobs.  This type of tracing is extremely valuable in tracking down non-paying customers who are able to ward off traditional debt collection strategies.  

How to Avoid Burnout in the Collection Industry

Collection industry professionals are some of the most misunderstood professionals working today, prompting many within the industry to burn out before they are able to achieve success.  For any job—whether within the collections industry or not—the state of career burnout results from a combination of exhaustion (both physical and emotional) and an overall displeasure and diminished interest in the work.  It can happen to anyone in any career field but is most common in those fields that are misunderstood by the general public or carry enormous pressure, two qualities that certainly apply to the collections industry. 

So how do I avoid it?

The first step to avoiding burnout in the collections industry is to set realistic expectations for yourself and avoid the tendency to be a perfectionist.  Perfectionists tend to set goals that are too high; when the goals are inevitably not met, they blame themselves for the failure when really, very few people (if any) could have met such unreasonable goals.  When you admit that there are facets of the collections industry that are out of your control, you allow yourself to set more reasonable expectations and goals. 

The next step to avoiding burnout is to become an active part of building the business for which you work.  Many of you reading this blog are collections attorneys or professionals who are building your own collections firm, so this advice is a given, but still others reading might have been hired on as an employee without a vested interest in the success or failure of the company.  In either case, taking on an active role in building the business will do two things to help you avoid burnout: 1) It will help you look beyond the momentary struggles and see the bigger picture and 2) it will provide the incentive to look for solutions to problems instead of becoming overwhelmed by them. 

Finally, and perhaps most importantly, immerse yourself in tasks that are at various stages of completion.  Not only will this make your work more varied (thereby preventing boredom), it will allow you to celebrate small victories across a timeline of several months.  These small victories will be the impetus for renewed energy in your job and renewed focus, preventing the dreaded burnout so many in the collections industry experience.  

What are some of the perks with working with a legal network instead of a traditional debt collection agency in collecting on unpaid debts?

How to Use Automation and Virtual Collection Systems to Reduce Costs and be Profitable

The economic problems of the past 5 years have been significant, resulting in the double-edged sword of increased collections opportunities AND increased difficulty in collecting on those accounts.  In order to compensate for increased accounts and increased need to cut on expenses, collections firms are learning to make use of the benefits that automation and virtual collection systems can bring. 

The term ‘virtual collections’ generally refers to applications that include:

1. Electronic payment options
2. Automated negotiation features
3. Interactive collection communications (ICC), such as the Internet, e-mail, text messaging, and interactive voice response systems (IVRs)

Through the use of an automated collection system, it’s easy to offer delinquent customers the opportunity to agree to an individually tailored settlement any time of day or night, 7 days a week.  These automated systems allow collection firms and collection attorneys to collect on debts immediately online and use real-time credit scores to help determine the customer’s ability to pay on a debt.  Such information can be vital in providing a suitable automated negotiation that will be mutually beneficial to both the collector and the delinquent customer. 

You’ll find that the payment initiation procedures vary, depending on the virtual collections system used.  Some virtual collections systems will be limited to electronic bill pay, while other will add more extensive features allowing debt negotiations.  The types of payment channels will differ, as well, with some collecting mainly via credit or debit cards and ACH payment, and others offering additional features such as PayPal and other online payment portals.  These additional payment initiation features can help with your collection efforts, as many delinquent customers make money on the side through eBay or Craigslist and are often paid for these transactions through PayPal. 

The greatest benefit to virtual collections systems, however, lies in their ability to provide advance reporting and analytics regarding collection accounts.  This, combined with the feature of real-time credit report information, help collection agencies determine the extent to which their delinquent accounts should be pursued based on the customer’s most up-to-date credit information.  

Does an automated collection system offer ways to access a customer's credit score and ability to pay in order to provide a tailored settlement online?

Important Questions to Ask Before Taking on International Collections

Outsourcing has moved businesses into a global arena but along with the perks of this comes a very real downside – collecting on unpaid international debts.  In the wake of an economic downturn that has forced many businesses to cut costs by using overseas labor or products, international collections as a viable collections activity has increased.  But is the hassle of dealing with international laws worth the money gained?  

The simple answer is “yes” but that answer comes with a caveat: you have to ask the right questions to determine if international collections will be worth the time and effort you put into these accounts.  And since the laws relating to international debt collection vary from country to country and can often be affected by international treaties, it’s important to be as specific and up-to-date as possible when obtaining the answers to these questions. 

1. What does the original contract say about jurisdiction? Specifically, will courts uphold your contractual jurisdiction clause?
2. Will the court in your home country have jurisdiction over the company in another country?
3. If the court in your home country has jurisdiction over the foreign company, what is the process of serving your complaint on that foreign company, how difficult will the process be, and how long will the process take?
4. If you are able to achieve a judgment in your favor in your home country, how will you collect from the foreign company?  Will the home-based judgment stand in the country of the foreign company or do you need to bring a new lawsuit in that particular country?
5. Would it be easier to just file the lawsuit in the country of the foreign company?
6. Will you be able to seize assets of a company in a foreign country?  What is the process for doing so and will the courts require a bond?  Also, is there a way that the company can claim false seizure and how successful would that claim be if it did?