Credit guru Thea Dudley has spent more than 30 years in LBM credit management. Now she’s here to answer your credit and collection questions. Got a question for her mailbag? Contact Thea at theadudley@charter.net
Dear Thea,
How do you find attorneys to work with in this industry? How do you respond to an attorney that calls you on an account that is wanting to do a work-out on one of your non-paying accounts? What about attorneys that call about an old judgment you hold? How do you find a lawyer to work with for your company? I get lots of advice on what I should ask and what to look for, but how do you know who is right for your company? The lawyers I have spoken to either throw attitude at me or talk to me like I am simple minded, which I did not appreciate.
Signed, Attitude in Altoona
Dear Attitude,
Sometimes you just have to close your eyes, count to ten, take a deep breath, remind yourself that you wouldn’t look good in prison stripes or orange, and walk away from the lil’ punkin’.
I giggled as I read your email. I have felt your pain. Not just from attorneys, (although, painting with a broad brush here, they can be a pretty smug, self-righteous group) but from a lot of people I encounter throughout my day: sales, HR, purchasing, the barista at the unnamed coffee place, basically anyone who has an opposing viewpoint who is not open-minded enough to think I may actually know something. After all, I have been brewing and “crafting my own coffee” since before most of them were born even if I can’t whip up some foam on top.
You have two different question groupings here. Let’s tackle the first group: Dealing with an attorney who calls you about a work-out on a customer. I usually let them talk. Talk, talk, talk, and talk. I make some notes, pull up the account, doodle, and wait for them to wind down. This process could take awhile. Personally, I really enjoy it when they ask a question and then answer it. It is like I’m not really part of the process, just a semi-interested bystander. They usually ask, answer, and then try to wrap it up with the solution they have presented. Then they finally get to the rat killings and say, “So, we’re good here, sounds like a good plan.” It’s a statement, not a question. “No, no not at all” says I, in an almost, but not-quite-bored tone. “What, what do you have a problem with?” asks the attorney. Well, buckle up baby, it is going to be a bumpy ride as I am just getting started.
Have a little fun, dear Attitude. All is well. You are in the driver’s seat. You do not have to take whatever Slick is offering. If it is a work-out, ask some questions.
- What is the financial situation? Is the company going under and paying percentages, or are they continuing in business and looking for a reduction making you an unwitting financier?
- Ask for a copy of the company’s financials. I am “show and tell” credit manager. Show me the actual financials and let me figure it out for myself. I am not calling anyone a liar, but I have a fiduciary duty to my company. If I tell my CFO this is the best crappy deal we can get, it better be accurate. I like to actually sleep at night.
- Ask for the deal to be documented and signed off on. Make sure any changes you asked for are part of it.
- Ask for a day or two to consider it. It is okay to take a beat and think it through. Do not get pushed into making a decision you are not prepared to make at that moment. This sometimes gets met with the late night TV “limited time offer” line. Whatever. If it has waited this long another 48 hours is not going to cause total chaos.
- Once you take the deal, read the final paperwork completely BEFORE you sign off. Make sure nothing has changed. Have another set of eyes take a look.
What about that attorney calling about an old judgment? They are usually trying get the judgment settled for the least amount of money. Safe bet is the first offer may not be the best they can do. Don’t get overly greedy here. This is found money as usually these judgments are older and already written off. Same rules as above: ask some questions, what the offer is, if it is the best and what you are willing to take. Give it a tight time frame for getting the money to you once you agree on an amount. One-time settlements may warrant a better deal since the money is all at once. The payment plan, not as much. If I have to continue to carry you, someone has to pay the cost of that.
Now for your second area of interest: finding an attorney in our industry that is not going to be a tool bag. Start with recommendations. If you are getting input on what to look for in and what to ask the attorney of your credit manager dreams, then whoever is giving the advice should have someone they work with worth recommending. If that fails, (maybe the lawyer is not taking new clients, your credit buddy doesn’t want to share, or there’s another reason) then start out on your own.
Look for a construction litigation attorney, someone who is familiar with and understands our industry. I don’t want to pay to educate someone. I want someone who comes fully operational out of the box. Educating them on my company yes, educating them on the industry, no.
Since the people giving you advice aren’t coming through, expand your circle. Ask colleagues – fellow credit managers, vendors you use, sales people (sales people are really the hairdressers of our industry- they know everything and everyone). Check with your local NACM (National Association of Credit Managers) for input. If you can’t get some referrals go to your next best friend, google. Google “construction litigators.” See what comes up and let the games begin. Start calling or emailing and interviewing them. You are hiring someone just like you would for any other position. Why would you not interview them the same way?
What is important to you and your company? It is price point, experience, collaboration? What are you looking for from this role? Will the person you hire be willing to challenge you and your opinion, offer solutions and options? Are they willing to fight hard for your money while staying mindful of the cost to collection calculations? (Some fights are not worth the expense no matter how justified.)
I tend to work with people and companies not because they are nice and do whatever I tell them to do without a second thought, but because they educate and challenge my thinking for the betterment of me and my company . I seek out people who are not afraid they’ll be fired if they express an opposing view, can hold their own in a “spirited discussion” and are not afraid of making me angry. Talking down to me falls into none of those categories. After all, if someone is going to test my waters, they better know how to swim.
