How law firms can improve lock up and drive increased revenues through white labelled debt collection and credit management
White-label credit control or debt collection is when a debt collection or credit management agency delivers their services for a client or partner using the client’s name and brand. This gives the client’s customers the appearance of the debt recovery and credit management services being carried out in-house rather than having been outsourced to an external agency.
This white-label service can provide two distinct opportunities for law firms to improve their profit margins.
1. Growth in revenues through extending firms product offering to include full-service debt collection
Whilst debt collection work can prove lucrative, this piece of the corporate legal pie can often prove more difficult to secure with major businesses either handling much of this in house, utilising specialist firms, or in relationships with credit and collections agencies who have their own preferred legal partners.
A white-labelled partnership allows you offer your clients a full debt collection service under your branding from pre-legal through to the back-end litigation without the financial risk of having to invest in building an in-house team. Positioning yourself as a one-stop shop for all your customers debt recovery needs can deliver the business:
- A new revenue stream from the commission on fees received from business your clients place during pre-legal phase
- Additional debt collection litigation revenues
- Client acquisition and retention opportunities
With a white-labelled partnership, this can be achieved on a no-risk basis with no need to invest in human and logistical resources and is easily scalable up and down to service those peaks and troughs with no lost expenses.
2. Reduction of lock-up
There will be few partners that have not been at a board meeting where there has been a heated conversation regarding the firm’s level of lock-up and how to reduce it. This is unsurprising as a law firm’s lock-up can often range between 10-20% of total billed revenues. Some level of lock-up is to be expected – tied-up in revenues yet to billed – but if a large percentage of the lock-up bucket is formed from overdue invoices, questions must be raised regarding the effectiveness of the business’ credit and collections policies and procedures.
For all businesses credit management and recovering debts can be time-consuming, expensive and inefficient – which is why companies of all sizes often look to outsource these processes to an external agency. Through leveraging a specialist agency’s wealth of expertise and resources you can improve the efficiency and effectiveness of your collections, reduce costs and free up your client services and finance teams to focus on the areas where they can really add value.
If this is done utilising a white-labelled resource, which provides a high-quality bespoke credit management service in the tone and pace which fits your business and brand, this can not only prove seamless to your clients but often deliver them a far stronger customer experience with issues and disputes swiftly identified and resolved.
Barratt Smith Brown specialise in providing bespoke, white-labelled credit-control and debt collection services to our clients. If you would like more information regarding our services and what they could deliver for your business, please drop us an email to email@example.com or give us a call on 0116 296 1438
Sales Director, Barratt Smith Brown
Richard has extensive experience working with blue-chip businesses to help them improve cash flow and deliver their working capital targets.