Our client is a recruitment agency specialising in the legal sector, primarily working on retainer. As our client wishes to remain anonymous we’ll call them LawAgency and the debtor shall be LargeLaw.
LawAgency agreed to work on retainer for a large law firm (LargeLaw) to recruit a solicitor specialising in the Court of Protection. The process started well, with LargeLaw paying the first two instalments of LawAgency’s fee. Then out of the blue LargeLaw sent an email to LawAgency to let them know they were no longer recruiting and would be filling the role through an internal promotion.
LawAgency’s terms of business state that ‘if an assignment is not progressed due to reasons beyond the control of the Consultancy (e.g. recruitment freeze, internal appointment or third party external appointment), the Consultancy retains the right to charge a Consultancy Fee….’. LawAgency brought this to the attention of LargeLaw who refused to make any further payment.
Litigation can be time-consuming and costly against any debtor, but when the debtor is a large law firm the risks of throwing good money after bad increase significantly. LawAgency very sensibly opted to engage Sterling Debt Recovery to collect their debt on a commission only basis.
Sterling contacted LargeLaw demanding payment. Bizarrely LawAgency offered a fresh reason for non-payment, claiming that the role had been filled by a different recruitment agency. So we now had a debtor offering two conflicting reasons for non-payment, neither of which absolved them of liability under the terms of business. Sterling set out the full case to LawAgency in detail, highlighting the fact that, since the debt was over £10k, costs would apply should the matter go to court. LargeLaw dug their heels in but finally offered 60% of the invoice value due. Sterling persisted, insisting on the full invoice value plus late fees and costs. After some further toing and froing LargeLaw made full payment.
The fees and costs Sterling were able to add to the debt under the Late Payment Act covered the majority of the commission due to Sterling. This meant that LawAgency were paid their full invoice value, with Sterling’s service effectively costing them only £130 to recover £13,500. The debt was paid within 10 days of Sterling being engaged, far more quickly than could have been achieved by litigation, with far lower risk and cost.
It’s a fact that law firms are generally more difficult to collect from in the event of a dispute, whether or not the dispute is legitimate. Collection requires a confident and persistent approach to avoid intimidation, along with a clear understanding of the terms of business and the litigation process. Sterling has a 15 year history of collecting for recruiters, covering all sectors including legal. We know how to get you paid quickly, cost effectively, and without risk.