Part 2: How is the collection lawyer chosen?
Choosing the lawyer is an art and a science. Most experienced agency personnel have relationships (or at least familiarity) with creditors’ rights lawyers in most major metropolitan areas. If they’ve been in the business any length of time, the agency person has had to find (and evaluate) lawyers for clients in the past. Agencies choose lawyers (and give them repeat business), because the lawyers are “good.” But how do they find the lawyers in the first place and what defines them as “good”?
A recent survey of those choosing lawyers to enforce commercial obligations found that most clients look for lawyers who know the industry and who are known in the industry. That stands to reason. Agencies, on behalf of clients, want lawyers who know what they are doing and who are players in the field.
In the first instance, an agency will look to recommendations from people they trust. Clients, other agencies, other lawyers and commercial Law Lists, are all regular sources of referrals for agencies. These recommendations will generally cover important issues that affect the recovery rates and the cost, such as:
- Is the lawyer effective at collecting?
- Does she have experience?
- Is he cost-effective and does he provide good value?
- Does she cover a wide geographic area, but still effective as a “local” lawyer?
- Is he board-certified in creditors’ rights?
- Is she listed on recognized Law Lists?
- Does he act (and report) promptly?
Agencies will then overlay their own particular philosophies on the process:
- Some want competition among multiple lawyers in the same geography.
- Some look for the best service, not just the best price.
- Others want new lawyers who are “hungry.”
- Others want lawyers who are active in the Commercial Law League of America (CLLA) and International Assn. of Commercial Collectors (IACC).
Lawyers who concentrate in collections make their availability known to agencies in many ways. They purchase listings in Law Lists, attend industry trade group meetings, and obtain (and advertise) their board-certification and specialization in creditors’ rights. Lawyers will advertise directly to the agencies and often visit the agencies to get better acquainted with the personnel. Since agencies will typically place claims for many clients with the same lawyers, the lawyers recognize strong agency relationships as a steady source of business and they market for that. Lawyers recognize that agencies and lawyers are part of the collections team that serves the credit needs of businesses.
Some clients remember their good (or not so good) experiences with creditors’ rights lawyers on other accounts and make specific requests of the agency when the time comes for legal placement. As the client, the creditor should always have the right to choose (or approve) the agencies’ choice.