The CFPB is causing change in the practices of the big debt buyers and issuers and this change has large flow through effects to the legal collections industry.
As the debt buying industry consolidates and issuers tighten the reigns on their outsource policies the industry change is trickling down to law firms and this change will drive some firms into profits and some may lose their collection practices.
It is my opinion that the large buyers and debt issuers will move towards a more compliant legal strategy and therefore create growth in the legal collection space. But the growth will be at others expense, as many firms will slowly lose their client base. As the placers of debt look for more compliant ways to collect the debts they will also look to reduce the number and volume of outsourcers creating consolidation in the marketplace.
The small firms that can either find some niche or local collection business will survive but the average small one state firm will have a hard time competing with the large compliance budgets of the big multistate firms that will be the preferred vendor of the placers of debt. I predict that there will be mergers and consolidation in the law firm space to provide the clients the processes, reporting, strategies and compliance budgets they will require of the firms they place portfolios with. As these processes increase so does the complexity of the business, which increases the need for strong processes and foresight into the industry.
As a firm of the future you will need to move towards a PCI or SASE compliance audit and beef up your compliance processes for the staff that come in phone contact with the debtor.
Strong SOP’s will be required from the issuers and debt buyers and reporting will be a big leap for many law firms as the legal collection systems are clunky and not up to the level of the agency systems. So many firms will need IT consulting in addition to their IT departments.
What the new placers of debt will want most is transparency. They want cameras, software access, access to live and recorded calls, 24/7 compliance officers, data security, PCI complaint vendors, secure payment websites, compassionate collectors and more!
Lighthouse Consulting has been helping collection law firms to create Six Sigma processes that will pass the scrutiny of any auditor. Lighthouse can help you gain SASE compliance, create staff training programs, reporting dashboards, client transparency and help you position the firm for the upcoming opportunities in the collection industry. Law firms are in the best position for growth in the new collection future, don’t let yours get left behind. Contact us today for a FREE operational assessment and some brief Six Sigma consulting with our founder Phillip W. Duff by contacting him at email@example.com