Debt Collection
History
Many firms have a two-pronged methodology for dealing with Debtors:
- Leave it to the Case Owner (Fee Earner) to address
- Assign it to the Debt Collection Team
The first method has a common flaw in that either:
- The Fee Earner is not comfortable addressing the issue with someone they have built a good relationship with
- The Fee Earner (sub consciously) considers it better to concentrate on current work with other clients
- Without reminders it is not focussed upon
Therefore, the second method is a preferred solution because:
- There is no “relationship” to tarnish between the Debt Collector and the Client
- The Fee Earner can maintain their relationship safe in the knowledge that “the dirty business of money” doesn’t need to be mentioned
- For the Debt Collection Team this is all part of the daily process, and the appropriate focus can be applied
Whichever method is chosen normally requires a debt list to be produced and circulated to Fee Earners who will take, valuable, time reviewing and eventually responding.
It then becomes necessary to run a process to check the debt still exists, and if it does start chasing the debt with a sequence of “chasing letter”, which is handled by the Fee Earner becoming elongated and inconsistent.
The Solution
This next section details the solution as implemented by a Debt Collection Team (one or many people). An Intranet (internal website) built on a free platform is used.
Identification
We allow the Debt Collection Team to select everyone with a value threshold (size of debt). The outcome presents the top 30 results for a chosen Fee Earners’ cases they want investigated.
Investigation
The Intranet shows the Cases details and allows the Financial, Matter and Entity details to be accessed via link directly into P4W.
The Investigation will allow the user to set the status of the Matter to one of three statuses:
- Check – the Matter will be notified to the Fee Earner.
- Ignore – the Matter has previously been set to ‘do not pursue’
- Active – the Matter is already in the process
Confirmation
We will use Task Centre to send a notification to a Fee Earner that at least one of their Matters is being considered for pursuit. An email is sent once per day to a Fee Earner with debt that needs reviewing to enter the next process.
The Fee Earner will be taken to a page on the Intranet where they can see the cases and do their own investigation if they wish. They will then be able to state whether they wish to have the Matter Ignored or Activated.
Pursuit
Start
The Debt Collection Team use the Management page to view progress across all cases. Once the Fee Earner has confirmed that the debt is to be chased the action is confirmed.
A new Agenda is automatically added to the Matter and any required Templates are also loaded.
Progress Chasing
The chasing process follows a set of steps which consists of a series of phone calls / emails and letters
This follows 6 contact steps each checking if contact and agreement has been made with a reminder time if not:
- Phone (2 days)
- Phone (2)
- Email (letter) (7)
- Chase 1 (7)
- Chase 2 (7)
- Chase 3 (7)
If no contact is made (32 days) or the client declines a repayment plan, then the Matter passed to the Enforcement Team (Dispute Resolution) to consider and issue proceedings.
Agreement
If agreement for a payment is reached, then this is confirmed to the client and the minimum amount and cycle are recorded so that it can be monitored.
Refusal / Disputes
If the client blatantly refuses to pay the bill or disputes it this can also be actioned
Monitoring
The monitoring process is based on exception reporting, if the amount owed has not been received then the Management page will flag the exception.
If the debt is cleared, then this will be flagged up and the client is sent an ‘end of agreement’ confirmation.
Benefits
- Using a Debt Collection team improves debt recovery
- The structured process gives visibility to Fee Earner and Management
- Debt Collection does not detract from Billable Time
|