What is Debt Collection Software?
Collection software can be the missing piece of the puzzle, allowing attorneys to devote their attention to billable services such as legal research, drafting legal documents, and representation while speeding up payments and improving the collection process. Recovery is faster when law firms have tools in place that let them drill down on details about their cases and the parties involved. Improving cash flow increases their bottom line.
The debt collection process involves several different levels of communication and debt collection software gives attorneys the ability to initiate automation at any point in that process. An attorney , for instance, can send out a letter (either by email or by traditional mail) to a debtor after they’ve retained a client but before the matter is transferred to the collections department. Attorneys are able to generate more revenue once software takes care of the mundane activities that would otherwise take hours of time.
Essential Features of Debt Collection Software
The fundamental features of debt collection software include:
Automation
The main goal of debt collection software is to make as much of the process automated as possible. This cuts down on the workload for the law firm while increasing efficiency. Even if it doesn’t increase the number of hours the law firm can handle, it will decrease the amount of time it takes to do those hours. Look for software that will automate:
Some of the more advanced software programs can even automate dunning letters and phone calls. This is especially helpful because it can be difficult to stay on top of communicating with debtors while also focusing on the other business the law firm does. With automation, those methods of communication can continue even if the firm is too busy to get to them immediately. Eventually, however, you should have a staff member take over those duties because nothing is more effective than a personal touch.
Integration Capability
The next thing you should look for in debt collection software is how easy it is to integrate into your existing systems. While you could get a standalone product and only use it for collecting debts, it would require that your staff enter all of the information into the debt collection software individually and then into the existing system. That’s a lot of busy work that can be eliminated by getting a program that integrates with other systems.
Does the program integrate with your document automation or case management system? How about your accounting system? If you’re using a program that doesn’t integrate with existing systems, you’ll have to do all of the data entry yourself, or hire someone who’s going to spend most of their day doing administrative work. That’s no way to get stuff done. The program you choose should be able to integrate with CRM systems, accounting software, document management, legal practice management, and email programs.
Reporting Tools
Debt collection is all about tracking what’s happening with a client. You have to know who owes what, how long they’ve owed it, what payments have gone through, and how long it’s been since they last communicated with you. Comprehensive debt collection software will give you robust reporting tools to help you know exactly what’s going on. If, for example, you have an update on a case and the debtor’s attorney calls, what you don’t want is to have to log into the software, look it up, call them back, and then log that conversation back into the software. It’s too much work when all you want is a basic overview of what’s going on with an account. Comprehensive reporting tools will save you from all that nonsense.
Secure Client Communication
When you’re dealing with financial information, security is key. At the very least, the debt collection software you choose should offer SSL encryption at all times. A variety of different communication methods should be encrypted to keep the client’s information safe. If you ever call a client and discuss the debt with someone who’s not part of your law firm, you’re disclosing private information. It’s not enough to just log that information into the system. It has to be encrypted from the get-go.
Advantages of Debt Collection Software for Law Firms
Investing in cutting-edge debt collection tools can create a debt recovery system that can be extremely advantageous for law firms. It can be efficient and more productive than older processes. Having software that enables for fast analysis and better reporting will help keep your client organized and most importantly, help your practice charge higher fees. Law firms will have better collection rates resulting in better cash flow. A Modern system will also increase compliance to the latest collection regulations. Compliance is a huge topic for attorneys, especially with Fair Debt Collection Practices Act (FDCPA). Be sure to watch out for changes like the new E-Sign Act and how it can affect client communication. With a superior tool in place, tracking client accounts will automatically increase with accuracy and the elimination of human error. Resolved accounts will be easier to identify and clients will be more informed during the collection process. Additionally, the supporting proof of debt and communication can significantly reduce the overall collection time. The legal process itself can be better managed and more effective if an up-to-date system is used.
Leading Debt Collection Software for Law Firms
The top debt collection software options to consider include:
Clio – Clio has a dedicated collections practice area feature to help attorneys coordinate information. It can also be found within the Clio suite as a portal for clients to access their accounts online. Because Clio is a cloud-based practice management software, it is affordable and offers packages ranging from $39 per month when billed annually to $149 per month per user when paid monthly.
LEAP – LEAP has a collections matter workflow to help attorneys get the most from their collection practice. It is included as part of their full-featured law practice management offering. LEAP starts at $39 per month per user (billed annually) or $49 per month per user (billed monthly).
Lawmatics – Although not a dedicated debt collections platform, Lawmatics is a robust all-in-one CRM system that aims to both start and end a matter. This means that it offers a client portal for collections payments, in addition to being able to handle marketing automation, billing, and more. Lawmatics is $59 per month per user when billed annually or $79 per month per user when billed monthly.
Rocket Matter – Rocket Matter has a full-featured practice management solution. It includes detailed billing options and client portals for collections. Pricing starts at $39 per month per user when paid annually or $49 per month per user when paid monthly.
TrialWorks – TrialWorks is a litigation-based case management tool. In order to manage billing, collections and firm expenses, Trialworks includes a payment plans tool which allows for consistent customer collections over time. Pricing starts at $479 per month for a full office license.
How to Select the Best Debt Collection Software for Your Law Firm
When it comes to choosing debt collection software for law firms, it’s crucial to select a solution that not only suits your immediate needs but also has the scalability to grow with your and your clients’ demands. For many firms considering the implementation of debt collection software, the primary concern is achieving greater efficiency for their accounts receivable departments, while simultaneously providing an improved customer experience for clients.
Here are some important criteria that law firms should consider when selecting debt collection software:
Scalability A debt collection system that has been designed to handle the needs of a small or mid-sized firm should be able to scale up to handle the needs of large and jumbo sized cases.
User Friendliness Look for intuitive and user-friendly screens , which allow for the quick and easy use of updated data. The software should enable users to easily add information to a screen and review active and historical data.
Customer Support Although many debt collection system providers offer support mainly, if not exclusively, through a help desk, a number of providers will go beyond helpdesk support and also provide an account representative dedicated to serving you.
Customization The ability to customize a debt collection system is also an important factor. While most software providers will create a software package that has the majority of functions included for most types of users, a good provider will customize their application to meet your specific needs.
Case Studies: Successful Law Firms
Kenneth S. Nugent, P.C., a law firm based in Georgia, discovered that many of their fully recovered cases were impacted by their receivables remaining outstanding due to lack of proper follow-up and inefficient communications with adjusters and insurance companies. When adjusters repeatedly requested for necessary documentation to release the funds, their internal tracking was inefficient, causing delays in collections. By implementing debt collection software, in particular Easysoft’s Debt Collection Software, the firm reduced their coding burden related to automating their workflow for tracking incoming checks, receiving payments, and releasing funds. Easysoft also provided Kenneth S. Nugent with, on average, a 45-day drop in aged receivables.
This Connecticut-based law firm began using debt collection software in 1991 when they thought about implementing a computerized system for some of their legal collection client files. They started with a database and welcomed automation with being able to tag the files for follow-ups via monthly or biweekly reminders. They currently have around 1,500 active collection accounts and about 2,500 inactive collection accounts. Since their usage of debt collection software, the firm has improved efficiency for their staff and have more accurate and timely client reports so that they can receive faster payments from their clients.
Baker Robbins & Wagner is an insurance litigation firm that specializes in defending insurance companies in civil suits. Their clients require them to provide detailed reports of their collection efforts. To do this manually was labor-intensive, but with debt collection software, they have been able to produce customized forms and reports within minutes.
The Future of Debt Collection Technology
The future of debt collection technology looks promising. Most notably, we can expect to see increased integration of artificial intelligence (AI) in various forms. AI can make helpful, effective recommendations on how to best proceed with a collection, providing a strategic advantage in negotiations with debtors. The enhanced data analytics capabilities of AI will also allow users to unlock hidden money through more effective collection techniques.
Another trend in debt collection software is a greater emphasis on data security. Software developers are developing services that are more secure as vulnerability concerns grow. However, with the increased use of artificial intelligence and the ever-growing pool of data being fed into cloud-based software systems, this ought to be an area of cautious vigilance if a law firm is dealing with debt collection accounts.
The continual integration of cloud-based systems into debt collection software also offers real-time capabilities. These cloud software systems operate with high availability. With the ability to operate independently of where the user is located, updated customer communications systems will allow law firms to be more responsive and provide greater value to their clients.
There is no doubt that debt collection technology will continue to advance in the coming years. Law firms should therefore make an effort to keep abreast of evolving debt collection software solutions, investment in which may result in significant returns for the firm and its clients.
Conclusion: Maximizing Efficiency with Debt Collection Software
As we set out in this article, the consideration and implementation of technology in a law firm setting can save time and money, avoid unnecessary costs, and create more value for attorneys, clients, and third party vendors. Adding functionality to automate and assist with debt collection activities can put your firm a step ahead of the competition- capitalizing where others are falling behind, and delivering a level of client service that will translate to retainers and recommendations. We briefly described below some of the top debt collection systems for law firms that have been reasonably priced and well regarded by our clients. For larger firms particularly , but also for smaller firms, consider deployment with the vendors so the software benefits all practice areas. Firms that leverage technology throughout the organization can bring about economies of scale that extend beyond the individual attorney level, often positively impacting marketing, development, and retention goals. Debt collection software platforms should be a part of the conversation.
