When looking to consolidate a legal firm, what steps should be taken to insure it works well?

Key Elements Of An Effective Legal Merger

Image courtesy of Danilo Rizzuti / freedigitalphotos.net

These days more and more companies are working hard to stay afloat in today’s struggling economy.  This has made more of them delve into a reserve of different ideas and concepts to keep their struggling companies from folding.  One concept companies have been utilizing is merging.  Some of the benefits a legal company will see with a merger are:

• Lower costs
• Improved business structures
• Improved bottom line

A consolidation can be very complicated causing delays in bill payments, missed communication and a host of other possible errors.  In order to have a highly successful consolidation or merger some of the following should be considered:

Strategic Planning

Firms have to look at other firms as a tool when they are considering consolidating with them.  This means they have to hunt for a firm that has key players that will be a good addition to their team.  It also means it’s critical to consolidate with a company that is of the highest quality you can. 

Look For A Firm That Complements Yours

When looking at other firms to consolidate with, you should look for one that has skills that can be considered a compliment to those that your firm offers.  If you’re looking to move into other areas of legal practice then you should look at firms that offer these services.  If you’re looking to expand in a particular area that is the type of company you should consider merging with. 

Due Diligence Is A Must

Consolidating or merging with another firm can be one of the biggest things your firm does to increase business.  For this reason it’s critical that your due diligence is completed.  Finding annual reports, interviewing those who work for the company and doing as much research as possible are all critical in making sure it’s a move that will be beneficial to your firm.  

Creditors Play an Unrecognized and Powerful Role in the Debt Collection Process

Image courtesy of David Castillo Dominici / freedigitalphotos.net

While third-party debt collectors and collection law firms get the blame when it comes to collections calls, most people don’t think about the fact that it is a creditor that is responsible for the initiation of the collection activity, and creditors pay a large role in how the collection activity is carried out.  Debt collectors are paid only if they can recover payment for the creditor and they are required to follow the laws regarding collection activity. 

Creditors claim that it is important to them that debt collectors acting on their behalf are respectful when they make collections calls because the reputation of the creditor is at stake.  One reason for this is that third-party debt collectors are often working for creditors that the customer is likely to work with again in the future. 

Utility companies, hospitals, government agencies, etc. want to maintain a decent relationship with the customers to avoid potential problems in the future.  However, despite the claims of the creditors, they are not choosing collection agencies based on their ability to uphold the reputation of the creditors. 

As unusual as it may seem, choosing a service provider based on who can provide the lowest price is the bottom line when creditors choose a collection agency.  The average amount of money they recover, known as the recovery rate, along with the price they charge, is how most creditors select a collection agency to recover the money they are owed.  The creditors, it seems, care more about who can perform the job at the least expense, rather than which collection agency has the best trained employees and the least number of complaints. 

Creditors also claim that they are strict in what they will and won’t allow collection agencies to do on their behalf; however, their ultimate goal is to recover some or all of the money owed by each customer, and they make it clear to the collection agency they hire that the recovery rate is what is of most importance to them. 

Creditors are often large corporations or government agencies, and the reality is that regardless of how the collection agency they hire to recover debt treats their customers, many of the customers won’t have the option to discontinue future services.  

Collectors Take Their Stand: Seek Sanctions in FDCPA Cases

Many collections companies find themselves spending their time in court responding to boilerplate complaints, only to find that the plaintiff doesn’t actually participate in the litigation yet won’t drop the suit.  Meanwhile, attorney’s fees and court costs continue to build up.  A recent case in California resulted in two debt collectors being awarded more than $13,000 in the form of sanctions against the plaintiff’s counsel.

During the year prior to the sanctions, multiple consumers filed lawsuits of an almost identical nature against various collectors of debt.  The complaints were boilerplate, with allegations associated with reporting activity on the plaintiffs’ credit reports as the basis.  Multiple debt collectors, creditors and debt buyers were named in the suit.  The majority of the cases were dismissed immediately due to the failure of the plaintiff to make a claim or to comply with various rules, in addition to plaintiffs’ counsel not attending discovery meetings. 

One of the dismissed lawsuits made assertions under state laws, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act.  Other than serving the claims, the plaintiff did not take part in the case, resulting in the dismissal of the case.  On behalf of two of the defendants, Issa Moe, an attorney with Moss & Barnett, P.A., filed several motions that sought an award for the various costs and fees associated with the case. 

The court declined to hold the plaintiff responsible for the costs incurred by the defendants; however, due to the actions of the plaintiff’s counsel, which the court regarded as being “unreasonably and vexatiously” conducted sanctions against the counsel totaling $13, 278.50 were awarded.  While sanctions being granted in a case such as this are rare, it is good news for collection lawyers and  debt collectors subjected to such frivolous litigation to know that they have paths they can pursue to recoup their losses.  

What is the creditor's role in the collection process?

Collecting Debts From A Run Away Debtor

Image courtesy of imagerymajestic /freedigitalphotos.net

When you have invested your time and money into a suit, it is frustrating to have the case awarded in your favor, only to find that the debtor is no longer in the state.  Once you track the debtor down, then you’ll have to pursue your judgment.  It is not uncommon for a debtor in a suit to change locations, but that doesn't mean that it will be difficult to collect a judgment from a state other than the one the judgment was awarded in. 

What About Cross State Moves?

Some plaintiffs are under the false impression that if a debtor moves to another state before a judgment is settled that they will have to get a judgment in the new state, and that they will need a collections attorney to complete the process.  However, this is inaccurate on both points.  The plaintiff can take care of the paperwork himself, as it typically involves a relatively simple form that registers the original judgment in a civil court in the new state.  For the quickest results, register the judgment in the county where the debtor works or owns property. 

The Finer Details

After you have registered the previously awarded judgment in the debtor’s new locale, then you’ll need to contact the sheriff’s department of the county in which the judgment was filed.  The sheriff’s department can then put you in contact with whoever is levying officer of the county.  This person should be contacted to find out what needs to be done in order to pursue the judgment. 

A writ may be necessary, in addition to the newly registered judgment as well as the original.  Once the levying officer is aware of the judgment and has all of the necessary paperwork, then the claim can be pursued.  Once the debtor’s assets have been located, you will be able to collect on your judgment.  If you have questions regarding your ability to receive your judgment from a debtor who has moved, contact the law offices of Ross Gelfand.  

What are some of the best methods to get clients to get clients to pay on balances?