Julie Cave

You’ve been involved in credit management for 30 years including 12 years in the legal sector. What are the main changes you’ve seen in that time?

Well, during my career I’ve experienced the whole cycle of growth, heavy investment in property, technology, people and training in the good times, then cost cutting, redundancies, and crisis management when things turn sour. Back in 1998, I had just completed the installation of what was at the time cutting edge technology which transformed the collections and credit management process for one of Britain’s best known fashion retailers – an industry where there is no room for commercial complacency. As a result of this success, I was headhunted by one of the top ten law firms anxious to modernise its debt recovery department as part of a programme of investment and growth. At that time, the firm was a 300 partner practice with great aspirations. They had already won a number of prestigious new clients in banking, who were market leaders in consumer credit. This was a new area for the firm, and included the recovery of debt run up on credit cards, mortgage arrears and failure to keep up loan repayments. The sort of thing the news has been full of recently. I was brought in from the commercial sector, as it was recognised that the firm needed to draw on external expertise in order to compete in this market where competitors were debt collection agencies rather than legal practices. A new range of strategies had to be introduced, including integrating collections management software with the practice management system, adding a virtual predictive dialer, and introducing new working practices with emphasis on performance delivery. It came as no surprise that some partners saw this as a risky move away from the core business that had been the firm’s foundation. There was initial reluctance to embrace commercial practices, which included simple things like changes in the language used, as the debt recovery department became a fully operational call-centre with terms like “shifts” and “dashboards.” Not everyone felt comfortable with the changes. Feelings began to change once the benefits could be seen. Income from the debt recovery department increased by 500 per cent in five years and the gross profits were held up as a model for other departments to follow. This radical change in working practice was driven by the need to satisfy clients who wanted both the security of working with a law firm and the productivity of a call-centre. Having already successfully marketed the debt recovery service, the firm had to decide how much it was prepared to change in order to keep clients happy and meet profitability targets. Thinking about it, whilst there have been many changes in the economic landscape over the past 12 years, one thing that remains constant is that all business needs to keep evolving in order to remain profitable.

What do you think are the main challenges currently facing the Bar?

I think the Bar is in a similar position today as the law firm I joined back in ’98. There are many options to consider but once a set of chambers has determined what its market is and understands what clients want, there comes the hard part of transforming to deliver excellent service whilst maintaining profit. Now, as then, investment in people, training, technology, and finding new ways of meeting client needs, are required to deliver success.

How does credit management in law firms compare with that at the Bar?

The larger law firms have been investing in technology and skills for many years. Initially, most of the credit controllers I met in chambers were inexperienced in the role, often working part time and learning on the job. Now, it’s not unusual to see headhunting being used to attract skilled credit controllers. The role is becoming much more valued. When you consider benefits versus employment costs, a good credit controller can make a vast difference to chambers’ profits. I know of chambers that have attracted skilled, qualified credit managers to assist in improving cash flow and profitability. They bring a wealth of commercial awareness and now that debt prevention has become a necessity for sets dealing with large commercial transactions, it is a natural progression. An area where there is still a noticeable gap though is technology. Most of the chambers management software that I’ve seen doesn’t have a strong, functional and integral collections element.

How important is technology in a credit management function?

The modern world demands the use of technology in varying degrees. I think that the importance of technology in credit management is determined by the variety and complexity of the work undertaken, and the volume of transactions. Anything that simplifies and speeds up the work has to be a good thing.

Do you think chambers have the right skill set internally to deal with these issues?

Some do but many are acknowledging that they need to invest more in this area. There is no doubt that management of chambers is modernising. More experts are being sourced from outside of the legal sector. This can be seen in roles such as chief executive officers and business development directors. If the trend in marketing skills improvement is followed, it won’t be long before credit management is given much more importance within chambers.

Julie Cave was interviewed by Guy Hewetson, LPA Legal