When does a series of seemingly separate events become indicative of a trend? That is a question I have been asking myself a lot lately, and now I am putting it to you. During the past five or six months, I have seen or heard of a growing number of in-house attorneys who have left collection agencies — voluntarily or otherwise. It begs the questions — is this just a number of coincidences? Or do some in the industry see something else going on?
By my count, there are at least five lawyers who are no longer working for the agencies they once did, and those are just the ones I know about. Maybe five is not enough to indicate a trend, but it does seem rather curious, at leas to me. I am not going to name them because many of them told me this information in private. I do know that the positions of some of those lawyers were eliminated, meaning those agencies are not planning on replacing those who left with new employees.
My first instinct was to conclude that the moves were cost-saving measures. Even though agencies seem to have better financial results than expected during the first months of the coronavirus pandemic, the lack of additional stimulus packages, combined with an unemployment rate that is still significantly higher than usual may have agencies worried about what is on the horizon and beyond. Let’s face it, an in-house attorney is not paid the same as a collector. Maybe agencies are looking at their staffing and payrolls and making the decision to pre-emptively cut back, on the chance that belt-tightening is required to keep the lights on. That thought was echoed by many that I spoke with about this new dynamic. But there are other factors to consider, too, such as a perceived sense of relief and safety with the Consumer Financial Protection Bureau under new leadership.
Companies in the industry may want to think twice about downsizing their compliance operations, given the looming release of the debt collection rule from the CFPB and the potential for a change in leadership atop the agency based on the outcome of next week’s presidential election.
If you have a theory or something you wish to share, please feel free to reach out to me.
