When it comes to collecting outstanding fees from legal consultancy services, having a structured recovery system in place is crucial. This article outlines a 3-phase Recovery System designed to help recover company funds efficiently and effectively. Each phase involves specific actions and strategies to maximize the chances of fee recovery. Let’s explore the key takeaways from this Recovery System:
Key Takeaways
- The Recovery System involves three phases: Phase One, Phase Two, and Phase Three, each with distinct steps and strategies for fee recovery.
- Phase One includes sending letters to debtors, skip-tracing investigations, and attempts to contact debtors for resolution within the first 30 to 60 days.
- Phase Two transitions the case to affiliated attorneys for legal action, including demand letters and continued attempts to contact debtors.
- Phase Three presents two options: closure of the case if recovery is unlikely or proceeding with litigation, with associated legal costs and potential outcomes.
- DCI offers competitive collection rates based on the number of claims submitted, the age of the accounts, and whether they are placed with an attorney.
Recovery System for Outstanding Fees
Phase One
Within the first 24 hours of initiating Phase One, a multi-faceted approach is deployed to secure payment. Immediate action is taken to ensure that the debtor is aware of the outstanding balance. A series of four letters is dispatched via US Mail as a formal notice. Concurrently, the debtor’s financial and contact information undergoes thorough skip-tracing and investigation.
Efforts to resolve the debt are aggressive and persistent, with our collectors employing a variety of communication methods:
- Phone calls
- Emails
- Text messages
- Faxes
Daily attempts are made to engage with the debtor, aiming for a swift resolution. This intensive period of contact continues for 30 to 60 days. Should these efforts not yield the desired outcome, the process seamlessly transitions to Phase Two, involving our network of affiliated attorneys.
Phase Two
Upon escalation to Phase Two, the local attorney within our network takes assertive action. The attorney’s first step is to send a series of demand letters on their law firm letterhead, signaling the seriousness of the situation to the debtor. Concurrently, the attorney’s team initiates direct contact attempts through phone calls, aiming to negotiate a resolution.
If these intensified efforts do not yield a satisfactory outcome, a strategic decision is required. The path forward involves a critical evaluation of the case, considering the debtor’s response and the likelihood of successful recovery.
The process during this phase includes:
- Immediate drafting and dispatch of demand letters
- Persistent telephone contact attempts
- Assessment of the debtor’s engagement and payment capacity
Should the situation remain unresolved, a detailed report outlining the challenges encountered and recommendations for Phase Three will be prepared and sent to you. This ensures transparency and allows for informed decision-making on how to proceed with the recovery of outstanding fees.
Phase Three
Upon reaching Phase Three, the path forward hinges on the feasibility of recovery. If prospects are dim, we advise case closure, absolving clients of any financial obligation to our firm or affiliated attorneys. Conversely, should litigation be deemed viable, clients face a pivotal choice.
Opting out of legal proceedings allows for the withdrawal of the claim at no cost, or the continuation of standard collection efforts. Choosing litigation necessitates covering upfront legal expenses, typically ranging from $600 to $700. These costs encompass court fees and filing charges, initiating a lawsuit to recover all dues, inclusive of litigation costs.
Should litigation prove unsuccessful, the case concludes without further financial liability to the client.
Our fee structure is competitive and varies based on claim volume and age. Here’s a snapshot:
-
For 1-9 claims:
- Under 1 year: 30%
- Over 1 year: 40%
- Under $1000: 50%
- With attorney: 50%
-
For 10+ claims:
- Under 1 year: 27%
- Over 1 year: 35%
- Under $1000: 40%
- With attorney: 50%
The decision to pursue litigation is significant, with potential repercussions for both the recovery process and financial commitments.
Frequently Asked Questions
What is the Recovery System for Outstanding Fees?
The Recovery System for Outstanding Fees is a 3-phase system designed to recover company funds from debtors. It involves sending letters, skip-tracing, contacting debtors, and potentially involving affiliated attorneys for legal action.
What happens in Phase One of the Recovery System?
Phase One includes sending letters to debtors, skip-tracing, contacting debtors via various methods, and attempting to resolve the matter within the first 30 to 60 days. If unsuccessful, the case moves to Phase Two.
What occurs in Phase Two of the Recovery System?
Phase Two involves forwarding the case to an affiliated attorney who will send demand letters to the debtor, make phone calls, and continue efforts to resolve the debt. If unsuccessful, further recommendations will be provided.
What are the options in Phase Three of the Recovery System?
In Phase Three, the options include closing the case if recovery is unlikely, proceeding with litigation (with upfront legal costs), or continuing standard collection activities. Rates for collection services are also provided based on the number and age of claims.
What are the upfront legal costs in case of litigation in Phase Three?
If litigation is recommended in Phase Three, clients are required to pay upfront legal costs such as court fees, filing fees, etc. These costs typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.
What are the collection rates for outstanding fees recovery services?
The collection rates for outstanding fees recovery services vary based on the number of claims submitted and the age of the accounts. Rates range from 27% to 50% of the amount collected, depending on the specific criteria.
