Where credit's due
20 June 1995
17 February 2014
21 October 2013
28 August 2013
5 February 2014
9 December 2013
When this firm formed its specialist debt recovery unit in 1990, it adopted a novel approach. The firm wanted to ensure that the service it offered matched client requirements, and in what was considered a major departure from accepted practice, it employed credit managers to show it what sort of service they would want as credit managers in an ideal world.
The unit has prospered as a result. And the image of lawyers within the credit management field has been radically transformed. While some firms still help to perpetuate the view of a profession aloof from the commercial implications of its actions, more progressive firms have embraced new technology and adopted a new culture. This sees legal action in the broader context of effective credit management.
This broader view has seen many firms invest in event-driven computerised systems which permit much more commercially realistic pricing structures. "The service a lawyer can offer has always been superior to that of other collection services," says credit manager Martin Hughes, "but cost has always been a problem. The Law Society's regulations still handicap firms to a degree, but today firms like our own are highly competitive on cost."
Seen from the perspective of credit managers in industry, law firms who are able to offer competitive fees are attractive in a whole range of ways. This firm tries to support credit control departments not replace. As with other firms, what is on offer are bespoke packages which can cover the whole spectrum of credit management from pre-legal chasing through mainstream debt recovery and commercial litigation to bankruptcy, liquidation and injunctions. Clients work with the relevant department to establish which elements of our service best suit their requirements.
The additional credit management resource offers a logical extension to this. The firm's credit managers regularly advise clients on the structure of their credit control departments and their internal procedures. "We try to get beneath immediate problems and tackle the root causes of bad debts," says fellow credit manager Barry Stephens. "Often we find that poor terms and conditions, credit vetting or sales processing are throwing up problems which a reworking would avoid."
This firm encourages clients to focus themselves on cash flow generation which may mean splitting simple, fresh debt from more complicated ageing debt, retaining the former and putting out the latter.
The various methods of outsourcing work continue to develop. Modem links with clients mean that data can be input into the system remotely and the progress of matters checked at will. The firm is currently experimenting with the next generation of IT-driven solicitor/client communications which will give even greater freedom and latitude to clients.
Looking to the future, the dynamics of the market for debt recovery are changing rapidly. Client expectations are increasing and the profile of their debt portfolio is evolving. Companies are crying out for effective solutions to their problems. In a fiercely competitive market it will only be those firms who place their clients in the driving seat who will prosper."
Sandra Shepherd is head of debt recovery operations at Shoosmiths & Harrison.