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| March 20, 2008 |
| Developing A Collection Practice: Technology, Series 1 of 7 |
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The National List of Attorneys Raises the Bar!
Congratulations on being a member of the leading attorney referral and networking service! We value your membership, and strive to help you strengthen your practice. The National List is more than an attorney referral service. In addition to our many membership offerings including bond coverage and a listing in our online and hardcopy directories, members also receive our monthly eNewsletter. The eNewsletter covers industry news and trends on technology, products and services available to enhance your collection practice. For the next two months we'll feature a special eNewsletter exclusively for our attorney members, highlighting seven key topics:
• Technology
• Security and Compliance Issues
• Client Relations
• Marketing and Networking
• Skip Tracing
• Staffing
• Buying Charged-off Receivables
We continue to raise the bar for debt collection attorneys, collection agencies and the credit industry as a whole. We understand the fundamental issues you face as a debt collection attorney. Our publications feature articles written by attorneys who cumulatively possess over a 100 years of experience. These articles are particularly useful for new attorneys just starting in the debt collection field, and are also a solid refresher for more experienced collection attorneys and representatives of collection agencies, particularly in addressing debt collection laws.
Watch for your next members-only publication filled with relevant, in-depth articles focused to benefit you and your collection practice.
Do you have something to contribute to our Raising the Bar Campaign? We are always seeking quality content for our monthly eNewsletter. Having your article published in our newsletter is a great way to gain recognition as a prominent attorney in the industry. Please email your idea to results@nationallist.com.
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Technology
By: Warren S. Rosenfeld, Esq., President and CEO
Automated Collection Control, Inc. (YouveGotClaims®)
A common mistake made by debt collection attorneys and even collection agencies when starting a collection practice or trying to grow an existing collection practice is the failure to plan for an adequate investment in essential technology. Without such an investment, starting or growing a quality collection practice will be a very difficult task.
It is important to distinguish necessary initial technology from the “nice to have if I can afford it” technology that enable collection practitioners to be successful. The necessary initial technology will include:
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A quality accounting system that can interface with your software.
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A quality phone system that will enable the seamless flow of collection calls throughout the collection process. A real plus is a phone system that can also capture data necessary for the ongoing analysis of your phone usage.
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Electronic Data Interchange (EDI) capabilities are also necessary if you want to compete in your marketplace. Your software may possess simple EDI capabilities. Look for systems that support the YGC data format, since that is the format most heavily used at this time. Others are used but to a lesser degree.
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A quality printer and fax system will always be put to good use. Scanning capability is considered a necessary investment at this point in time.
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It is imperative to have a reliable Internet service provider (ISP) and a high speed connection (e.g., DSL, cable, T1) not just for the e-mail communications that drive our industry presently, but to take advantage of other technologies and information resources that can reduce communication costs and increase production efficiency. Do not skimp on this service. A slow provider or one that has frequent outages will severely damage your practice.
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Additional technology investments should be made once your collection practice needs to get to the next level of sophistication. Your clients will let you know when this becomes necessary either by explicitly telling you or by implicitly telling you so through their placement of new accounts with your competition in your geographic marketplace. The next level of technology investment you will need to make if you want your practice to continue to expand and compete for the best clients will include:
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An auto-dialer, if you intend on performing substantial pre-litigation collection calls as part of your overall service. (IAT offers debt collection communication solutions, visit their website for additional information).
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A subscription to a scoring service, such as Fair Isaac or Predictive Metrics, if you want to get away from the manual review of pre-litigation accounts received from your clients.
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A subscription to portfolio scrubbing services, such as Accurint or Acxiom Insight, so that you can make certain no accounts having suit filed are bankrupt, deceased, or incarcerated.
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A contract with a Web-based debt settlement solution company such as Debt Resolve or Apollo. This may make it possible for you to limit the number of collectors that you hire since these services allow the debtors to settle without the need for collector participation.
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A relationship with a good skip tracing company that will work paperless files for you without the need for routing hard copy communications back and forth. There are many established skip-tracing companies in the marketplace such as VeriFacts.
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If your collection practice is already somewhat sizable, you should begin to add some or all of these if you want to move to the next level of sophistication and/or if you want to remain competitive in your marketplace.
When considering any technology, keep in mind that you will need to take sufficient actions to put into place the necessary levels of data and physical plant security. Even small clients will have some data security requirements; the most sophisticated of clients will have substantial physical plant requirements also. Your software vendors will most likely handle most of your data security needs, but depending on the specifics of your in-house software/hardware tasks/configurations, further data security actions may be necessary. You can decide for yourself if a prospective client’s requirements are too rigid or costly to justify the pursuit of future business from them. Sometimes, the additional costs involved in meeting the requirement for physical plant security aren’t reasonable nor worth the risk if the client could turn out to be only a short-term one. Find out what their past track record has been with other law firms.
Lastly, although it is not a technology investment per se, begin to add seasoned collectors to your practice if you have not already done so. Many attorneys make the mistake of thinking that a paralegal can serve the same purpose. Nothing is further from the truth. A good collector will let you know the technology s/he needs to be successful, and will get results both in the pre-suit and litigation processes that you may not have realized in the past. Even a single collector can make a big difference. Technology is necessary but is of no use if seasoned professionals who are adept in its use are not employed. Learn “who and how” – that is, learn who can and how to effectively use all technology purchased. To do otherwise is to simply throw money away.
Warren Rosenfeld is currently President and CEO of Automated Collection Control. He was President of NARCA, 1995-1997. He was founder and managing partner of The Rosenfeld Attorney Network, 1980-1998 and managing partner of McNeily & Rosenfeld, 1985-1998. Warren was a practicing collection attorney for about 20 years, 1980-1999.
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The National List of Attorneys
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