Over the past four decades, I’ve received hundreds of letters or emails from lawyers I’ve assigned to collection cases (after a few days or a week handling a case) to tell me, “The debtor isn’t responding to our demands for payment. Do you want to send us costs to begin a lawsuit?” However, precious little other information was provided to me. It always baffled me as to how that corresponding law firm expected anyone to make an intelligent and informed decision about an investment of time and money into the litigation process without providing substantially more than that in a report.
Debt Collection Lawyer May Not Provide Enough Information
Now certainly, if I provided the law firm with substantial information about the debtor, along with my own experience with the delinquent party, and instructions to say I did want an immediate quote on the amount needed for suit, that sort of letter or email sent by counsel would have been ok as long as it attempted to fill in any information I may have been missing.
However, take that first paragraph on face value without building additional facts into the scenario I presented. That sort of communication received from a firm of professionals is far less than a professional presentation at all. Worse, it’s not atypical of many law firms. Watch out for that as it’s a sign they may not have your best interest at heart.
Questions to Ask a Law Firm
If you’re not getting sufficient details from the people you engage to handle your collection cases when it comes to the fork in the road on a decision to file suit or go down a different path, here are the things I always expected to hear from that law firm:
- Confirmation the debtor remains in business – That means not merely shown as active on an official register.
- Can the lawyer confirm the legal composition of the debtor’s business entity (corporation, proprietorship, partnership, LLC etc)?
- Does the lawyer have sufficient information to complete personal service of process on the registered agent of the debtor? – Not merely an address where substituted service of process can be obtained (like service by mail or via the official government registration office).
- Does the law firm know of any specific assets which can be used to satisfy a Judgment if you obtain one?
- Does the lawyer believe the debtor might have any reasonable defense to a law suit or any cause to file a countersuit?
- What does the lawyer think about the sufficiency of your case documents to prove your case at Court? Are any other documents needed?
- Will your attendance for depositions or trial be needed later on?
- Is the amount of money requested by the lawyer sufficient to take your case through to gaining a Default Judgment? What other money does the lawyer believe will be needed after a Judgment is obtained in order to collect it?
This is the bare minimum set of questions you need to have answered by the lawyers you engage. Don’t settle for less and if less is given demand the rest. You should not have to make a decision about investing in a lawsuit without the answers to these few questions. If you have more questions, don’t stop until they’re answered and you feel comfortable with the notion that a lawsuit makes good economic and practical sense. There’s a reason lawyers are referred to as “counselor” – make them behave like one to provide you with good, professional “counseling”.
During the course of a law suit, or even if no law suit has been filed, it remains the lawyer’s duty to keep you informed of their progress with the case. With each report, they should tell you when to expect the next one, regardless of whether or not the status has changed. Then they must live up to the commitment to get you those expected reports on time. If they don’t deliver that report on time prompt them until it is received. If two prompts are sent without response, you may need to take extra measures to protect yourself (more about that in another blog post). Understand this critical point, “The first sign of a defalcation by the law firm is a failure to report in a timely fashion.”
When Should I Ask a Question?
So when is the proper time to ask counsel a question? Whenever you have a question and don’t hesitate.
Dave Greenberg began his career in commercial collections with Dun and Bradstreet in Seattle, Washington. After spending 8 years with D&B, Dave took a position with ABC-Amega Inc. Over a 32-year span, he vastly expanded their international department and became an industry leader in the commercial-international niche sector. He was a Past President of the California Commercial Collection Association, on the panel of commercial arbitrators for the American Arbitration Association, and the Council of Better Business Bureaus, while also remaining active in the US Air Force Reserve.
He is a co-author for both FCIB and ICTF for their online credentialing courses for international credit management offered through Michigan State University and Thunderbird School of Global Management. Over the decades, Dave traveled the world, providing speaking engagements to credit grantors from Cyprus to Germany to China. He currently serves as Legal Liaison with the Law Offices of Gary A. Bemis.
Dave is also an author of children’s books and, along with his wife, recently moved to California to be closer to their grandson.
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