More Powerful Than Money: How to Really Motivate Employees

  • Written by Michael L. Starzec

starzec michaelOne of the most enduring scenes in Francis Ford Coppola’s “Patton,” is Patton’s speech whose purpose is clear: to motivate men to fight. The speech is really a collection of Patton’s most colorful quotes, woven together as an exhortation to perform well. For myself, I’ve never liked the rah-rah speech as I am pretty self-motivated. However, that is not a humble brag. You see, my dad lived through the Great Depression, spent his 18th birthday (June 6, 1944), at place called Normandy, then fought in Korea and Vietnam. Hence, if I ever told my dad about being unmotivated, suffice to say, there was not a ton of sympathy for esoteric angst over my desk-job travails.

With that upbringing, I found it hard to relate to an unmotivated employee who knew hard work likely meant better pay. Understanding their pay was not the sole motivation was a revelation: Patton’s one-size-fits-all motivation was appropriate because that’s how militaries work. As was noted in Peter Jackson’s recent World War I documentary, “They Shall Not Grow Old,” a soldier who complained about small boots was told: “It isn’t the boot that doesn’t fit you. It’s you who doesn’t fit the boot.” In today’s economy, that is not the answer.


In collections, the bottom line is dollars making it easy to assume every aspect, including employees, is motivated by money. However, Harvard Business School found that perks, promotion and pay “don’t necessarily excite people to work smarter or harder. Instead, they prompt employees to do only the minimum required to get that next raise or job title.” Instead, studies by MIT, the London School of Economics, and Carnegie Mellon found that recognition from managers and peers results in employee motivation and retention.

Motivation and retention are intrinsically linked. When an employee leaves, there is recruiting, interviewing, training, resulting in reduced productivity for the manager who is interviewing then training as well as the new employee who will take time to get up to speed. All of this increases your operational costs. These findings are not the esoteric musings that did not impress my father: A Gallup study of 10,000 business units in 30 industries found that recognition leads to retention, increased employee effort and profitability.


For us to organize with this mindset, the first step for me was personal engagement with new attorneys from the start. There you can determine aptitude, interest and ability in litigation, drafting, court appearances, organizational skills and willingness /confidence in public speaking. This allows us to focus on specific training and channeling the attorneys to their strengths. Additionally, we do not learn the attorney’s skill set but we get to know the person.

We also make an effort for spontaneous, departmental recognition. When a new associate wins their first trial or hearing, all the attorneys receive an email about the attorney’s accomplishment. Likewise, client or judicial compliments, effective handling of a difficult matter, or identification of a compliance issue are announced to their peers. Importantly, we ensure the other partners are aware: It is one thing to have your manager recognize you and another to have a partner do so.

Stay Connected

Finally, I try to stay connected with what my attorneys are doing: I attend volume court calls, review pleadings and placements – this lets me know what my team is juggling on daily basis. Consequently, I can make more informed decisions on time management and staffing while showing engagement. And it’s never a bad thing to occasionally bring coffee and some good donuts. Thus, it’s not the necessarily the Carrot and Stick approach because, as author Dan Pink noted: “Humans aren’t horses.”

Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.

Collectors Help Consumers Obtain Credit

  • Written by Michael L. Starzec

starzec michaelWhile in court, a consumer requested to discuss settlement. After the mini-Miranda, he asked if I was aware of the Holy Bible. When I advised him that the nuns at my grade school expected us to have read it he immediately broke into broad smile stating that he knew the matter would proceed “virtuously.”

Then, he produced a well-thumbed Bible, turned to Leviticus 25:8-13 and read to me its duty of debt forgiveness in Jubilee years. Since it was Jubilee year and because “America is Judeo-Christian nation” he was sure I would dismiss the case. When I suggested the Jubilee didn’t apply to modern entities, he considered me as a teacher addressing a particularly dim student, asking if I questioned the relevance of God.

Not surprisingly, I suggested we involve the judge but the young man switched from the Old Testament to the New, insisting that Jesus would forgive his debt. Unmoved, I offhandedly noted that even Jesus agreed that one should render unto Caesar his due. At this, the young man disgustedly announced that Jesus had broken bread with tax collectors but mentioned nothing about forgiving debt collectors.

That little vignette is amusing but his reasoning is not much different than the views of utterly agnostic regulators and legislators. As philosopher and economist Adam Smith noted, “[v]irtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience.” Eschewing the Bible for civic morality, legislators nonetheless endow legislative and regulatory efforts with the virtue of protecting consumers from the black hats – us. And, because these efforts are driven by the “virtue” of preventing the poor from repaying legal debts, well, case closed.

Fighting For Time

We faced such virtue signaling just last year: We were part of a coalition that tried to bring veracity to virtue when faced with a legislative package that imposed automatic exemptions on banks, increased the income threshold for garnishments while virtually eliminating interest and slashing the lifetime of judgment. Put differently, it took longer to collect them but with less time to do it - the perfect arrangement for virtue signaling polls. Notwithstanding that Federal Reserve studies found that increasing collection regulations increased interest rates for the same vulnerable people the politicians hoped to protect. Never mind that, in some cases, increased regulation led to lost access to credit, because this was all in an effort to assist the relatively small group of consumers who default.

In the end, the collective lobbying efforts succeeded in thwarting the proposals… temporarily. However, with the advent of a new governor, these same bills are set to be reintroduced this month. So why now? In my mind, these bills are a reaction to what consumer advocates see as the neutering of the CFPB. When it was in place and creating regulations by litigation rather than by promulgation, closing down law firms on the basis of standards that didn’t exist at the time, the local actors were content to sit back and let the power of the federal government do its work.

Time for Vigilance

For our part, at the time, it was easy to identify federal intervention as the main concern and focus of our efforts. However, it also clouded us to the simple truth that regulation comes at all levels and legislation is simply regulation without an agency. Bills such as these should remind us that as a profession, we have to be vigilant on behalf of ourselves and our clients at all times and at all levels. We need to ensure we are organized locally, statewide and nationally. We have to involve all the actors in the effort – our clients, our vendors – to understand that regulations on us impact everyone connected to our firms, from process servers, to asset location services, to efiling and many, many more. Likewise, when we have a politically favorable climate, we can’t simply wipe our brows and be glad to be left alone. We must ensure we move to enact fair legislation.

And we have a good story to tell – readily available credit helps many, many more people than it hurts. The first loan you repay sets you on a path to financial independence. Denial of credit helps few and may permanently impact a consumer’s future. Where necessary, we are the conduit to communicate consumer hardship and, in getting old loans paid, we allow the consumer to reset their financial clock and look to the future. Not a bad day’s work but, unless we vocalize it, the virtue of what we do is lost.

Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.

Meaningful Involvement Looms Daily Since Weltman

  • Written by Michael L. Starzec

starzec michaelOur industry has celebrated the opinion and order entered on July 25 in the infamous matter of the Consumer Finance Protection Bureau v. Weltman, et al as a major victory. The efforts and determination of Weltman’s team are extraordinary and were taken at great risk to themselves in order to vindicate the practices of collection firms nationwide. At its core, the Weltman case concerned the esoteric concept of “meaningful involvement.” This is akin to Aquinas’ discussion of angels on the head of a pin or Justice Stewart’s famous line, “I know it when I see it,” as his threshold test for obscenity. Today, while no one frets about elbow room for angels and the internet has rendered obscenity tests irrelevant, the issue of meaningful involvement looms daily.

- Click Here for Summaries of Referenced Cases (Collection Advisor Professional Network Members Only) -

Meaningful Involvement’s First Appearance

This phrase first appeared in 1993 in Clomon v. Jackson. In that case, the letter falsely stated that an attorney had personally reviewed it and determined litigation was feasible. Notwithstanding its limited factual application, it is now the de jure means for the consumers’ bar to sue collection firms.

Modernly, Bock v. Pressler & Pressler applied meaningful involvement to the complaint process. Even though not a single allegation in the collection complaint was found to be false, the court held a signature on the complaint implied meaningful and professional application of legal expertise. However, no guidelines as to how to demonstrate meaningful involvement were provided. All we could discern is that an attorney could not rely on actions taken by automation or non-attorneys to insulate themselves from liability.

Into this fray stepped the CFPB with its consent decrees against creditors, debt sellers and lawyers. However, the decrees had a silver lining: By setting documentary standards, we were informed of what was necessary to bring suit. So, a review of our scrubs, venue and documentation at placement and then, a second view at the time suit is filed should suffice to defeat a meaningful involvement case, right?

Cases at Odds

Hence, Weltman provides a template for how to defeat a meaningful involvement case on a demand letter, but it is not the anecdote to Pressler. In reality, we have two district court cases which seem to take opposite positions on the same processes. The Pressler court was dismissive of scrubs and non-attorney involvement whereas the Weltman court ruled attorney involvement in creating the processes, policies and procedures by which clients were accepted and demand letters were produced was sufficient, even if some were automated or performed by non-attorneys. Additionally, while the delicious circumstance that the CFPB’s former chairperson, Richard Cordray, the man who authorized the action against Weltman, had approved Weltman’s practices when he retained them to collect state debts as Ohio Attorney General added an element of satisfying drama to the matter, this was a unique circumstance that many of us will not have in our quiver.

Thus, Weltman addresses the sufficiency of a predemand letter review, not the process for approving a complaint. Additionally, as the trial court noted, “there is not necessarily a set meaningful involvement requirement… as this is a question of what must be determined based on individual facts and totality of circumstances in each case.” In other words, a meaningful involvement action is likely to survive a motion to dismiss which means, from a litigation and cost standpoint, you will be in it for the long haul, up to at least summary judgment, and likely a jury trial to vindicate your individual process.

Precedent and Progress Made

So, yes, meaningful involvement suits are not going away but this in no way discounts the Weltman ruling. First, it vindicates that attorney created and reviewed processes matter. Second, that collection firms can rely on attorney trained and supervised non-attorney staff to perform tasks, just like every other practice of law. Third, Weltman took a stand against the most powerful agency in American history and won, not on a technicality, but after jury and judge reviewed what they do and how they did it and found it meaningful. Finally, in taking this stand, Weltman sent a message to the consumer bar that it will not be easy to prove, even to a jury, that well-crafted and administered practices lead to misleading the consumer. Put differently, despite all the resources of a federal agency, the CFPB could not prove its case. As a result, this decision is a cautionary tale for the consumer bar – yes, the fight will be long and costly for the collection firm. But, with sufficient practices in place, a creditor will win.

Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.

3 Major Steps to Maintain Confidence in Your Compliance

  • Written by Michael L. Starzec

starzec michaelIn the modern compliance era, collection law veterans have become inured to seemingly relentless rounds of annual, bi-annual, and quarterly testing, certification and recertification exams that we take on a yearly basis. For us, compliance is used to improve your practice, modernize workflow and protect against audit failures. Indeed, it becomes cost-effective as you avoid risk and attract business with robust compliance controls. However, your associate attorneys often do not perceive these impacts as they wrestle with compliance on a day-to-day basis.

In the not-so-distant past, I managed our associate attorneys, that tenure ending just as the reality of CFPB oversight lead to compliance-heavy training and testing. Then, as now, the allure of collections was the promise of a steady diet of court, arguing many substantive motions and obtaining significant trial practice. At that time, after a few hours of FDCPA training and testing and a quick review of the employee manual, a new associate was with attorneys on day one, reviewing case law and learning how to prepare a court call. By day two, they were shadowing an attorney in court.

Now, an associate won’t see an attorney or think about the law (other than the FDCPA) until their fourth day at the firm. In addition, depending on the client, a new attorney may take up to 14 different tests. And these tests cover areas as diverse as Fair Lending to the American with Disabilities Act to Anti-Money Laundering. In fact, at one point, for a mortgage lender we actually had a test on the federal Flood Insurance compliance. (Not surprisingly, flood insurance was never raised by a defendant in a single case we handled for that client.)

But when we reflect on the training, it is not surprising a new associate leaves bewildered. First, they take a test on the FCRA but later are informed attorneys cannot discuss the implications of the FCRA in settlement discussions. While they never process an electronic payment, they learn about the Electronic Fund Transfer Act (EFTA). They wonder if they would confront claims of inappropriate access to bank facilities. And, from all of this testing most of the attorneys immediately realize that simple, honest mistakes can result in FDCPA lawsuits. One associate noted that as attorneys handle the case last, they are the line of last resort to prevent a lawsuit.

- Click here for the Electronic Fund Transfer Act and checklist (Collection Advisor Professional Network Members Only) -

This sobering realization is useful information for all of us with management roles. While we want to create a compliance culture, we do not want to have employees constantly on edge, fearing decision making. For that reason, our firm has made efforts to ensure our attorneys can practice law and compliance with confidence.

1. See the Whole Process

First, we try to ensure that we don’t let our various departments work in a vacuum. Therefore, we expose our attorneys to the entire process, from placement review to filing of post-judgment remedies. Not simply to know how a file gets to court, but to let them know that there are people and processes in place to detect mistakes or changes in the circumstances of the file.

2. Someone to Summarize

Second, because we as partners and managers are engaged more often in disseminating information rather than having to act on that information, it is critical to come up with ways to cope with the sheer volume of material that falls upon the staff. On a monthly basis, think how many times we receive client updates or are issued an entirely new client guide comprising hundreds of pages. And all of these changes are acknowledged with a simple click of the mouse. With the amount of work an attorney must perform, synthesizing that information into actionable intelligence is nearly impossible. To combat information overload, at our attorney meetings, we have an attorney who is responsible for summarizing all the changes that may impact our attorneys over the course of that month. We quickly discovered that these summaries yielded discussion, questions and feedback. Something we rarely obtained by simple email dissemination.

3. Re-Familiarize with the Workload

Finally, it is important to re-familiarize yourself with the day-to-day work your attorney performs. Walk into their offices, find out what issues they are facing, find out how much the practice of collection law has changed since we were the ones running around the court house. Having effective lines of face-to-face communication leads great benefits to staff morale and leads not simply to work satisfaction but breeds a culture of cooperative compliance and teamwork that can only enhance the effectiveness of your practice.

Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.

The New CFPB and Its Faith in the American People

  • Written by Michael L. Starzec

starzec michaelIn early May, Director Mulvaney announced that the CFPB’s student loan division is being shifted to its consumer information unit in an effort to transition the agency to a vehicle that provides consumers information about their legal rights. In the ultimate act of poor timing, this decision was announced at nearly the same time as a Federal Reserve report that announced student loan debt had risen to $1.5 trillion, surpassing auto loans, which clocked in at a paltry $1.1 trillion while credit cards were reported at $977 billion.

Not surprisingly, reaction was negative. Many feared the move would negatively impact efforts to curb abuses in the student loan industry, particularly the pending action against Navient who was accused of steering borrowers into higher payment options without providing other cost-saving options. At the same time, a USA Today editorial opined that student loans were “modern-day debtors prisons,” providing an appropriately Dickensian tableau for the discussion. The writer’s proposal was to reinstate bankruptcy for student loans.

Unfortunately, many commentators, be they professional, political or pundit, who examine public policy issues, focus only on the immediate, individualized results of the status quo. While this ensures maximum emotional impact, it ignores the larger, macroeconomic reasoning for the policy and the effect change might have on millions of consumers.

Consequently, the USA Today editorial would have you believe student loans are non-dischargeable because it purposefully disadvantages students to unfairly benefit lenders. However, a little research, specifically, typing into a search engine “why are student loans non-dischargeable” garnered a Forbes article that answered that question with precision. Congress made discharge of mortgage and student loan debt more difficult because of the societal benefits to promoting home ownership and access to higher education. Without restrictions on bankruptcy, policymakers feared there would be reduced investment capital directed to mortgages or student loans, which keeps them available and affordable. If the loans were immediately dischargeable, lenders might not risk loans to students. As better educated workers command higher salaries and can compete better globally, ensuring affordable education loans would ultimately lead to a better standard of living. Hence, Victorian squalor was not the inspiration for non-dischargeability; it was greater access to the American Dream.

But consider Navient’s dilemma. They are a debt servicing company whose purpose is to recover student loan debt. In that capacity, they are charged to ensure a given debt is paid and, upon default, recover that balance as quickly as possible. However, the CFPB action alleges impropriety because Navient may have directed students into arrangements that had higher payments. Put differently, they were supposed to collect money, just not so much. To be fair, I do not know if Navient’s service agreement required them to offer the option with the lowest payments first. But, all things being equal, this encapsulates the dilemma of our not-so-new regulatory collection universe: Creditors are being asked to be both their client’s and the consumer’s advocate. As a result, we are in the untenable position of having an ethical duty to zealously represent our clients while, at the same time, being required to provide advice to consumers at odds with that ethical duty.

Moving full circle, Mulvaney’s goal to transform the CFPB’s mission into one of education of consumers recognizes this dilemma. But, to my mind, this is an intended side effect to a broader policy goal that could have a national and generational impact. The CFPB’s previous iteration portrayed collections like a black and white 1940s western: The CFPB wore the white hat, banks and attorneys were the vicious cattle rustlers and the consumer was the obligatory damsel tied to the railroad tracks. Under that world view, every consumer was the “least sophisticated consumer” and therefore all consumers were victims. Mulvaney appears to be trying to balance the scales: Not by regulation that only confers permanent victim status on consumers but by education that empowers the consumer to make informed financial decisions. In the end, isn’t that the real aim of college – education to create productive, responsible and rational adult decision-makers? For, as Jefferson famously said: “I know no safe depositary of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education.” Let’s hope that our lawmakers, colleges and the loans made to pay them can do the same.

Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.