How to Evaluate an Attorney Network

The Internet has made it easy to find anything. Finding attorneys to handle your collection needs is no exception. Type “attorney network” into Google and it will return 116,000 results. Even narrowing your search to the phrase “commercial collection attorney” yields a still overwhelming 6,470 lawyers.

So, how do you know if the attorney you find through some Internet website is really qualified to handle your commercial collection case successfully and without bringing potential liability upon your company?

Typically, I advise business credit professionals to look at four factors when evaluating outside legal collections help:

1. Credentialing: Check out the network and how well the network checks out the attorney.
2. Cost: How does the way the network charges the attorneys affect you?
3. Service: Will the network make your life easier?
4. Bond: The answer to “what if?”

Credentialing

Check out how the network evaluates law firms and attorneys. Before choosing an attorney network to work for you, make certain they have a strict screening process for all attorney members. Some specific steps that a quality attorney network will take to screen attorneys before allowing them to be in the network include:

• Running a credit check on the law firm/attorney
• Checking references
• Verifying professional responsibility insurance coverage (i.e., malpractice)
• Confirming admission to practice law
• Reviewing record of complaints with the attorney registration department of all states where attorney is admitted to practice

In addition, when seeking out a network of attorneys to aid in collections, it’s important to use one that screens its attorneys not only for integrity and honesty, but also for their experience in the field. Not all collection cases are the same. There are significant differences in collecting a transportation claim than there is when pursuing collection under a factoring arrangement. Handling subrogation matters requires a specific understanding of the insurance industry, so be certain that the network evaluates their attorneys on their specific experience in the credit industry.

Check Out the Network

There are several characteristics a quality attorney network will possess. Some of the questions you should ask include:

• Does the network support important industry associations and attend their conferences to stay on top of what is happening in the industry?
• How long has the network been around?
• How many attorney members does the network have?

Request that the network provide you with several references.

Cost

How the attorney pays a network can affect your own cost. Some networks will charge you a fee to access their attorneys or use the network’s services. Determining your cost when using these types of networks is relatively straightforward. Most of these will charge based on an annual fee, a fee per transaction a percentage collected or placed, or some combination. Knowing your cost up front allows you to make your own informed business decision.

However, the vast majority of networks will claim that there is no cost to use the attorneys. Nonetheless, the way a network charges its member law firms will affect your real cost to use the network. So, it is important to question the network about their business model in order for you to make an informed business decision on which network to use.

If the network charges the attorney a fee per claim or a contingent fee based on the amount collected, this cost will most likely be included at a direct cost. It will ultimately be reflected in the rates the attorney charges you.

Other networks instead charge an annual membership fee to their attorneys. Typically this annual charge is absorbed into the firm’s overhead and the cost is spread among all clients and all matters, rather than being charged directly to you and your individual cases.

Service

Does the network lessen your workload? One of the benefits of using a network of attorneys is that it should make your life easier. One way a network can help you is to manage a far-flung group of attorneys each handling one or two claims for you.

Ask the network what types of service they provide in addition to putting you in touch with an attorney. For example, how does the network match you up with an attorney? Before making a recommendation, do they contact an attorney on your behalf to confirm that the law firm meets all your requirements? Ask whether the network has a set fee structure that it recommends to its attorneys. Does the network encourage you and the attorney to negotiate your own rates based on your type of matters and your unique needs? Find out if the network will assist you in finding legal representation to work under your rates, terms and conditions.

When making a recommendation, what information does the network give you? For example, do they inform you about the firms specialties, size, collection procedures, technology capabilities, geographic areas they serve, credit and collection organizations they are members of, etc.?

Although infrequent, there are times when problems between you and the attorney can occur. Inquire about how the network helps you in the event of a problem. For example, what is the process for service problems such as obtaining a status report, closing a file, getting remittance of funds, etc.?

One suggestion is to ask the network for the name of the specific individual or individuals in the service department who will help you in case of problems. Then talk to that person to get a feel for how well they will work with you. How much experience do they have interacting with attorneys and dealing with your type of matters? Are they friendly to you over the phone? Do they respond to your email or phone calls promptly?

Selecting a network that has a strong service department and philosophy will make your life easier.

Bond

What if … ? Unfortunately, given the complexity and high risk nature of collections, it’s possible that you may find yourself a victim of an unscrupulous attorney who settles your collection file but doesn’t pay out the correct or agreed upon amount.

These attorneys are in the minority and do not represent the thousands of ethical attorneys who discharge their duties in a responsible manner, but they do exist and you need to protect yourself.

Does the network protect your claims with a bond? Is there an extra cost for your claims to be bonded? A bond protects you against any acts of defalcation. Don’t be surprised that an attorney that didn’t remit to you, most likely didn’t remit on other cases. Make certain that the bond is high enough to protect you no matter how large the total defalcation amount is.

In today’s environment, you will find networks without bonds. Bond policies range from little more than zero to an industry high of $3.5 million.

Conclusion

If you follow these guidelines, you’ll be assured of connecting with a qualified attorney skilled in the collections business that will negotiate with you in good faith and protect your interests while successfully closing a high percentage of your collections files. ●

©2008 National List of Attorneys