Debt Collectors vs Lawyers

“The lawyers are very highly paid people. To my knowledge, there aren’t many who specialise in small debts. And as they get busy, they tend to gravitate to more lucrative work.

“Where litigation is used, you should research it pretty thoroughly before you start. Lawyers tend to look at themselves basically to do litigation. And negotiations by a lawyer are pretty expensive, because of the time. They consider they aren’t serving their client properly unless they issue proceedings, because none of the costs are recoverable until they’re on summons or whatever. So there’s a problem about doing anything but minimum negotiation.

“It’s the opposite for a debt collector. I know very few debt collectors who encourage litigation. The lawyers really aren’t encouraging it — it’s just they can’t really do anything else. Lawyers don’t have people on the road, they can’t knock on doors, they don’t have those telephone skills and things. Their telephone skill is avoiding wasting time on the telephone. It’s bringing the thing to a head, defining the issues, and settling them.

“If other lawyers are involved, you need a lawyer. If we get a matter defended, we don’t try to argue with a lawyer. We brief our lawyer, who takes over. So perhaps where litigation is certain, you need a lawyer. Where another lawyer is involved on the other side, you need a lawyer.

“Where you don’t need a lawyer is where you don’t really know what you want. Where the debtor is missing, or it’s not clear if he has the assets. Or whether there are important non-legal aspects to be considered, like negotiating with the guy. I’m not talking about reaching a settlement with him. For example, where the guy is worried about what’s going to happen to him in procedural things. Where a lawyer might not want to talk to him. The lawyer might just say, if you don’t pay, we’ll serve.

“One of the biggest problems is when clients start to realise it’s their own fault they’ve got this problem. And they’re desperate to find someone else to blame. You know, the debtor is the worst bloke in the world — often he is. But frequently he never should have been given credit.

“Before you engage someone to give advice, you have to take a hard look at yourself. You have to be ready to write debts off if you can’t collect them. If you get burned, be careful about criticising the people who advise you. Very often people fly into lawyers offices wanting to issue summonses. The lawyer might say, ‘It’s 50-50, it’s your decision.’ He really means that. You might lose. You are really asking for it if you don’t listen to him.”

Some of this sounds critical of lawyers. It isn’t really — any more than criticising Mercedes because they make high-quality, expensive cars. That’s what they do. My aim is to describe things as they are, as I found them. Once you know how things work, how different worlds interact and what matters to different players, you can make effective decisions. And we are getting there…

Debtforce has their own in house solicitor, so along with having all the information in one place, there is no delay in organising legal proceedings and escalating the matter further if instructed.