As business people we are faced with hiring decisions all the time. The initial appointment with a potential client should answer two questions: can I help this person with their issues? Can we work together? A potential client that is evasive, irritating, frustrating and combative at the initial appointment is not likely to improve over time.
If you are considering hiring a Virtual Bankruptcy Assistant (VBA) the initial discussion should also answer two questions: can this person help me and my practice? Can we work together?
Over time you have developed a series of questions that helps you get to the issues and feel out a potential client. When I talk to a potential client, there are five areas I expect to discuss. An attorney that does not cover these areas is likely to be frustrating and difficult to work with over time. Here are five questions that I have been asked and expect from a potential client:
1. [Quantity] How many petitions have you prepared?
Volume is important. The more situations a VBA has dealt with, the more potential issues they will be aware of in new cases. What is a good answer? I think it depends on YOUR practice. If you handle 30-50 cases a year, after four or five years, you probably consider yourself experienced enough to deal with your potential client base. A VBA that has done 150 to 250 cases is probably a reasonable experience level for your practice size. A high volume practitioner that handles 200 or more cases per year will probably consider a thousand cases as a minimum level of experience. Matching your volume for five years to the VBA’s numerical experience will probably give you a VBA that can handle many of the issues likely to come up in YOUR practice.
2. [Breadth] What type of cases have you handled?
A VBA that has never handled a Chapter 13 case has seldom had to face the issues that asset cases address. It is like a car mechanic that has never dealt with a manual transmission. Chapter 7s, Chapter 13s, individuals, couples, same sex couples, sole proprietorships, federal and state exemption rules, multiple districts and multiple attorneys gives a VBA a vast array of experience that improves the quality of their work.
3. [Depth] What type of information do you provide when you return a petition?
A VBA should offer a comprehensive list of concerns, missing items and legal issues. The issues can be as simple as they were missing one paystub in the last sixty days to ‘Did you know they had $22,000 deposited in their checking account two months ago and it was withdrawn the next day?’ Seeing a lien on a car title but the creditor wasn’t listed in the schedules; A married couple with no jewelry listed on Schedule B and two jewelry store credit cards with large balances on Schedule F.
A report of the issues and concerns raised during the preparation of a petition gives attorneys two vital pieces of information: issues to be aware of in front of a Trustee and how forthright a client is in their discussions. A VBA should never assume an attorney knows what is missing or what issues exist. Most attorneys are aware of the credit counseling requirement but listing the absence of a credit counseling certificate in every case where it is missing is the job of the VBA. It gives the attorney confidence that when they sit down in a 341 hearing, the Trustee is not going to ‘surprise’ them.
There is one other area/issue that a VBA should not be afraid to advise the Attorney about: legal issues. I may get some flack about it, but a good VBA knows the rules and the law. I am not suggesting the VBA tell the Attorney HOW to practice bankruptcy law, but when a client has not lived in a state for two years, noting that different exemptions apply is part of our job. Legal issues will be rare, but they are 800 pound gorillas and catching them before a Trustee does makes a VBA invaluable to an Attorney.
4. [Performance] What is your turnaround time?
A nuts and bolts question? A VBA that answers ‘within 24 hours’ or ‘within 48 hours’, probably has a low volume business – nothing wrong with that, but the answer should be consistent with the answer in question number one. An answer of 7-10 days either indicates an extremely busy VBA business (and then you want to be careful with quality) or a VBA with other obligations (a regular job?). In the end, it is an issue of YOUR practice. If you routinely plan to file petitions quickly after obtaining the information from the client, a long turn around will impact your business processes. Also, if it is normal to file all your cases in the first week of the month, having longer turn around times may not impact your practice at all. A VBA should always offer that if you have an emergency filing, they will do their best to turnaround the petition as quickly as possible.
5. [Quality] What documents do you need to prepare a petition?
Most attorneys have a booklet or set of papers that a client fills out with the information necessary for the petition. That booklet is a foundation, but far from enough to complete a quality petition. In addition to the booklet, at a minimum: deed(s), title(s), 2 years of tax returns, 3 months of bank statements, 3 months of financial and creditor statements (especially secured debts); 6 months of pay stubs; any summons/complaints for lawsuits; credit counseling certificate. (I prefer and review 6 months of financial statements. 90 days covers SOFA #3 but could be an issue on balance transfers – our trustees ask about balance transfers over the last 120 days.)
VBAs that ask for less are not bad, but you need to compare the amount of information provided to the VBA with the detail expected back from them. A reasonable inquiry applies to all the steps in the preparation and filing of a bankruptcy petition. We have seen at 341 hearings the result of debtors filing their own petitions. VBAs that take only the minimum information provided and prepare a petition from it will fare no better.
A VBA that requests a significant quantity of documents is more likely to return a petition that accurately reflects the debtors financial condition, but reviewing such a load of documentation will take much longer also – expect to pay for it.
Those are the important five. They cover quantity, quality, depth, breath and performance. You will ask other questions as the discussion evolves.
But, you might notice there is no discussion of cost: how much do you charge? If you get good answers to the above questions, pay whatever the VBA asks. It will be worth it. When you bill clients for staff work, the amount is more than you actually pay the staff. The number reflects the overhead costs and carrying costs of having staff performing necessary work. The VBA provides their own computer, facilities, training and overhead. The VBA only gets paid when you need them, whenever you need them. No staff member would accept four hours of work this week, then sitting at home unpaid for 10 days.
Consider the amount of time you (or your staff) spend preparing petitions and then multiply that by your staff billing rate. It will be a reasonable starting point for fee negotiations with a quality VBA.
Tracy Coyle is a virtual bankruptcy assistant working with consumer bankruptcy lawyers nationwide. She can be contacted by email at tracy.coyle@gmail.com.
Another question for this list would be: What is your preferred communication style? You want to find a VBA that works on your wave length. If you aren't comfortable taking the time to talk out each task on the phone, don't go with the VBA who requires a phone call for each task. Communication is crucial!
Another question for this list would be: What is your preferred communication style? You want to find a VBA that works on your wave length. If you aren't comfortable taking the time to talk out each task on the phone, don't go with the VBA who requires a phone call for each task. Communication is crucial!
Thanks!