ATTORNEYS, LOVE THEM OR, HATE THEM
Have you ever thought, ‘Attorneys are expensive, and they take forever to deliver results, or that they do not deliver results’? If so, you’re not alone. Many share this perception, often fuelled by a lack of insight into legal processes. However, I invite you to join me on a journey to uncover the real value of harnessing a powerful relationship.
There are many factors necessary to drive a solid relationship with Attorneys to your benefit, and this paper will deal with some of them.
At the outset, we need to bear in mind that attorneys are not miracle workers. They operate within a legal framework, and the quality of their outcomes is intricately linked to the quality of the information and documentation they receive when you instruct them. As the saying goes in the IT world, “rubbish in, rubbish out.” This principle holds true for the legal realm as well. You cannot expect attorneys to work magic if the materials you provide them lack strategic depth, logic, accurate and meaningful information.
This blog is a sequel to my previous blog wherein I delved into the relationship between sales and the rest of the team – we delved into credit granting scenarios and highlighted do’s and don’ts. Due to the incredible success that I have received in this area, I am excited to share this with you. It will change the way you do business.
We will deal with a few transformative examples showcasing the relief and assistance available to you – if and I repeat if, the relationship is managed wisely. You change a perception by turning a misconception on its ear and by delivering results. I have championed many instances of transformative change to obtain results, my client’s being from both the legal and the commercial space, and in line with my brand promise, I will continue to provide you with real life practical examples showcasing reality.
The secret to success is firstly to follow correct credit risk mitigation and growth strategies (as explained to you in my blog “Respect your Sales teams”. Thereafter, and from inception of opening an account, it is essential to ensure that all correspondence relating to the account and management thereof is filed and maintained. The same applies to all accounting and transaction records. Always know your customer intricately, this is by having constant and informative contact with them and even includes knowledge of the landscape that they operate in.
This allows for a proactive approach to collecting your debt on time with adequate security in place to mitigate the risk. When you gauge that the account is in trouble, that is the point where you send pertinent correspondence to the debtor, the contents whereof must not read like a demand but rather a strategic message that details the history of the matter. Nine times out of 10, the debtors never responded. This is crucial, as it sets the tone for the Defendant to find difficulty in finding adequate reasons for a defense, and of course, easier for you to recover your money.
I want to give focus to the knowledge required aspect – this is so important. Leading the legal process from a commercial point of view, if you have requisite legislation and legal knowledge, is a pre-requisite. I have often instructed attorneys to proceed with a matter in a certain way and have received resistance from them as, according to them, precedent has not been set. I refer them sections of certain legislation that deals with relief that is provided to creditors and instruct them to set the precedent. This has been achieved on many occasions. If the Companies Act (as an example) promises relief to creditors and if this relief guides decision making, then use it – work it, it works.
The aim is to exponentially increase turnover and to increase sales whilst minimizing exposure.
Some results that have been achieved:
Pre-Legal Department 80% success
Attorneys
Collection success 86% success
Costs to Collect 9%
Bad debt write off 2%
These figures do not do justice to the real purpose, which is the aim of increasing turnover. Measured results showed turnover gained in hundreds of millions of rands.
Bear in mind that Attorneys do not always have the commercial knowledge embedded in their instructing client ‘s day to day business commercial habits – there often needs to be a bridged skill set available to plot the relationship between attorney and client. The converse applies and I alluded to it above, the client does not understand the legal process.
I will give you an example of this:
I was recently called in to consult and review a matter where a claim was being defended. The Plaintiff’s attorneys hit a wall as client was concerned about costs of the defended matter as well as the possibility of success. The principal amount of debt was in the millions which resulted in stress all around. The nature of the claim was goods sold and delivered. The defense was that the product was often defective which related in damages claim against the Plaintiff. I reviewed the matter and ascertained that there were no credit notes processed, ever. Therefore, the product could not have been faulty. Game changer! The case was now closer to settlement.
The challenge with this matter was that the Plaintiff’s service deliveries were dreadful – always late and the Defendant had correspondence to this effect. This did not negate from the fact, however, that goods were received and sold from Defendant to their client. The aim is to try and avoid providing a weak service that puts your company at risk – I dealt with this in my sales blog.
I consulted in the risk and recoveries department for a market leader, blue chip company in the manufacturing environment. They had a huge legal department and could not understand why, when the Attorneys reported that money was collected, that these results did not manifest into cash in their bank – put another way, the bad debt recoveries account was not adjusted with monies received. This practice has been ongoing for years. After diagnoses, I ascertained that, there was a glitch with the attorneys bookkeeping system and fees were automatically raised against collections. Therefore, have the ability and provide the systems to manage this exceptionally important relationship. I am hoping that the content of these blogs breaks down old fashioned practices and allows for innovative solutions to arise.
I have implemented many successful pre-legal and legal departments in Blue Chip companies. They are still successful today with a great record of success. I cannot express enough the necessity to cultivate this rewarding relationship. It will change the way you do business.
In conclusion, be prepared, strategic, and surround yourself with individuals who are passionate and proficient and able. Passion combined with skill equals a winning team. Your results will flourish if you strategically and systematically maintain your customer retention (CRM) data and implement the steps highlighted above.
Thanks for reading this blog. Stay tuned for more insightful discussions on boosting your business’s success. Join us next week, and let’s keep growing together!
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