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Making Compliance a Value-Added Component

  • Written by Fred N. Blitt

mug blittI have been faulted for being too optimistic or seeing positives in what appear to be negative outcomes. Perhaps that stems from my being a lifelong Cubs fan, alive for almost half of their 108 year World Series drought, but, whatever the reasoning, it is hard-wired into my nature. With that preface, I am here to tell you something that appears counter-intuitive and wildly optimistic: Your compliance department can be a value-added component of your collection law practice.

Let that sink in a moment before I explain because I can tell you, if you don’t see it that way, you aren’t alone. In fact, I had the same view until our compliance management processes evolved over the past few years. Simply put, compliance is what you make of it – it can be a burden or you can use it as a tool to increase your firm’s performance. I can’t guarantee you will look forward to client audits but I can say that if you use it as a tool to pro-actively analyze your practices, policies, procedures and your staff, it can translate into increased revenue.

It is easy to consider your compliance team compensation as simply non-revenue production expenses. Frankly, those team members don’t produce revenue. Compared to employees who prepare complaints, attorneys who appear in court or collectors calling on accounts, the answer is easy. However, when you think about the positive impact your compliance management staff can have on your firm, you can see some real benefit. This article will discuss some of the benefits we see at my firm.

Human Resources

Having a tight compliance management system helps your human resources department. I’m sure many of you have had this experience: new employee starts, begins training day one, leaves badge on desk and walks off the job never to be seen again. Obviously, it’s not ideal but it happens occasionally. Although the new hire is told all about the training and testing required, when they experience it first hand, it can be quite daunting. This highly regulated environment we all live in is not for everyone. Frankly, it weeds people out early and that’s a good thing compared to coaching up a new hire for three months only for them to leave for another job. This new normal sets the tone in our office. Following the rules and regulations are just what we do. It applies to people in the mailroom all the way up to my office as managing partner. No one is singled out and it helps our managers.

Audit and Reporting

Our internal audit areas and control reporting teams help meet client audit expectations and increase our performance. Internal audit personnel will determine if staff is properly following policies and procedures. In instances where there are defects, training will take place to help the staff understand the issues and fix them. This process will increase staff productivity. Control reporting takes on a similar role and provides my firm with the opportunity to find potential errors before they become an audit finding. A good example is making sure scrubs are done on accounts prior to demands being sent. Daily control reporting provides this data.

Compliance Management System

Having a solid compliance management system can separate your firm from others in the industry. Every one of our larger clients has a robust audit program. Some clients visit our offices as much as quarterly. Meeting and exceeding client expectations can have a major impact on your client relationships. Clients want to work with the top firms and help create new opportunities for them.

Focus on Compliance

Finally, our increased focus on compliance has led us to identify trends in lawsuits, threatened lawsuits and regulatory actions. Because we are tracking these, in detail, by client, by firm and by cause of action, we identify issues in our own processes, issues that may never show up on a client audit that you can address with changes in practices and policies to save yourself exposure, legal fees and consumer damages.

As a result of these and other changes brought to life by compliance, we have changed our mindset on compliance and audits – we now use them as challenge, as a benchmark and as a marketing opportunity for the firm. Your professionalism, the ability to have a staff dedicated to compliance and audits demonstrates you value the client, you have the staff to handle the client’s demands and ensure your key staff on legal and the collection side can dedicate their attention to the practice of law.


Fred N. Blitt, Esq., is a partner with Blitt and Gaines, PC in Illinois and Couch, Conville and Blitt in Louisiana. He is past president of NARCA.