For decades, the debt collection process for law firms has been a grind of manual labor. Many law firms doing collections the “traditional” way face uphill challenges like the rising price of sending direct mail, and staff pouring countless hours into making phone calls. Alongside rising operational costs, many consumers use digital channels to interact with businesses.
A digital-first collections strategy can be a process upgrade that helps law firms offer consumers additional ways to engage and pay, subject to applicable law and each firm’s compliance program. Let’s take a closer look at some of the top reasons why law firms should consider going digital-first.
The Problems with Traditional Legal Collections
The traditional legal collection process often runs into three key issues: high overhead costs, slow speed to resolution through traditional communication channels and challenges creating a smooth consumer experience. When law firms rely on staff to manually manage and conduct outreach to delinquent accounts, the cost to collect often rises sharply.
Every staff hour spent in the debt collection process is taken away from other key operations. It’s also important to note that letters and phone calls can cause unnecessary friction with consumers. How a law firm handles debt collection outreach has an impact on whether or not consumers want to engage and make a payment.
The Power of Digital Debt Collection for Law Firms
A digital-first debt collection strategy shifts the focus from manual and resource-intensive outreach to a more convenient workflow that caters to consumer preferences. By engaging consumers through digital channels like email and SMS, law firms align their efforts with modern preferences. When permitted under applicable law, a business that reaches out to consumers through their preferred channel, can increase repayments by as much as 40%.
Self-Service Options Reduce Friction for Consumers
Consumers don’t always delay making payment because they’re unwilling, sometimes friction in the process stops them from moving forward. Traditional collection strategies often require consumers to be available for a call during stated business hours to provide payment information or mail in payment.
Digital-debt collection software like Retain removes these roadblocks by offering a smooth consumer experience that’s supported by a self-service portal. With a one click when it’s convenient for them, consumers can easily review their account details, make a payment or set up a payment plan on their own schedule. When law firms give consumers the agency to make payments 24/7, it reduces friction and makes what can be a tense situation less stressful.
Get Scalable Personalization and Timing
A digital-first collection strategy trades in generic one-size-fits-all messages for a more personalized approach that’s aligned with consumer preferences. Modern debt collection software like Retain uses data-driven insights to help select an optimal message, optimal time and optimal communication channel from client-approved options, subject to the client’s compliance controls and applicable law.
For example, some consumers might prefer a softer text message reminder to pay their balance, while others may respond to email with urgency. Debt collection software can help your business discern what will work best for consumers without adding more work for existing staff.
Going Digital Can Help Law Firms Manage Collections Compliance
For law firms, staying on top of collections compliance is often a time-consuming process for staff. The regulations around debt collection are complex, with state and federal policies subject to change at any point in time. To keep up with collection regulations, law firms have to sink more time and people resources into monitoring and updating their outreach guidelines to keep up with new compliance standards.
Digital-first debt collection software can help law firms operationalize their approved communication workflows and compliance controls. For example, Retain includes deliverability checks and configurable email and SMS guardrails designed around industry standards. This code-based capability is informed by a team of experienced legal experts to help improve your outreach approach.
Plus, every consumer interaction through digital communication channels can be tracked through debt collection software. That can provide a centralized record of digital communication activity to support a law firm’s own oversight, recordkeeping and compliance-review processes.
Retain Helps Improve Recovery Rates & Lower OpEx Costs
Retain is white-labeled debt collection software that can help law firms scale client-approved digital outreach and reduce manual administrative work. See how your business can lower operational costs by automating digital communications by contacting our team today!
