Asset recovery is an essential aspect of mitigating shrink for any company, whether you're a large retail corporation or a family-owned business. When faced with the challenge of recovering lost assets, companies typically have three main options: pursuing legal action directly through the courts, using an internal recovery team, or partnering with a law firm. Here’s a detailed look at each approach to help you decide which is the right one for you.
Pros
Taking your asset recovery cases through the courts can bring significant legal weight to your efforts. Court judgments can mandate payments or asset returns, providing strong enforcement tools to help you recover what is owed. Court actions are also public records, which adds an element of formal accountability and can serve as a deterrent for potential future theft.
Cons
Court proceedings can be time-consuming and often require a significant administrative lift. Pursuing legal action without proper legal support can become a heavy burden on your internal team, taking valuable resources away from other critical business needs. Additionally, litigation costs can be steep, making this approach impractical for lower-value or lower-volume cases. Even if you win a case, it does not guarantee asset recovery, as additional means of enforcement may still be required to see any returns.
Pros
In-house recovery teams are exclusively focused on company-specific cases, which can lead to quicker decision-making and better case management. This approach allows for more control over recovery-related costs and efforts. If you already have an in-house recovery team and the volume of cases is manageable, it is likely your most cost effective option as companies can reduce the need for external legal fees.
Cons
Building a competent internal recovery team requires substantial investment in hiring, training, and retaining skilled team members. For complex or highly sensitive cases, internal teams may lack the necessary legal knowledge or resources to handle any roadblocks. Without the depth of experience and connections offered by law firms, companies may face limitations when pursuing challenging recoveries. Internal recovery teams are also limited by the size of the team in relation to the volume of cases. If the case load is too heavy, internal teams can struggle to find enough time and resources to give each case the proper attention it needs to successfully collect. Working with a civil recovery law firm mitigates risk of potential legal consequences via a separation of duties.
Pros
One of the key benefits of working with a law firm is access to specialized civil recovery expertise. Law firms that specialize in civil recovery are well-versed in the complexities of asset recovery and can provide valuable strategic guidance. Partnering with a law firm also gets you access to their resources and established connections, such as skip tracers, private investigators, attorney to attorney managed settlements / correspondence, and a dedicated support staff that can expedite the recovery process.
For organizations with a large volume of complex cases, hiring a law firm may be more cost-effective than developing or training in-house staff. By leveraging external legal teams, companies can avoid the ongoing expenses associated with recruiting and retaining highly specialized recovery experts.
From a public relations perspective, having a separate external firm manage collections can present a more favorable image than involving the corporation directly. This separation of duties helps maintain an unbiased public image and prevents the corporation from any unwanted legal attention during complex cases.
Cons
Outsourcing recovery efforts to a law firm creates an added expense of a third party provider.
When deciding on the best strategy for asset recovery, it’s important to evaluate the following key factors:
If you’re unsure which approach is best for you, contact the team at PRA Law Firm for a consultation call.
For over 30 years, PRA Law Firm has been a leader in nationwide civil recovery, specializing in helping corporations combat shrink. With our firm yet fair approach, we turn difficult and aged cases into successful recoveries, often surpassing industry collection standards.