Systems Are a Way to Limit Liability Risks

 

Courthouse

In the past, I’ve written about business systems as a way to maximize profits.  Systems provide another advantage that is near and dear to my heart-  limiting liability risks.  In fact, systems are an essential way to limit liability risks and protect the assets of a business’ owners.

 

Here’s an example taken right from the pages of my law firm’s operations manual-

 

My law firm is a “debt collector” under federal law, because we collect debts for our clients.  That means I have to comply with a set of rules found in the Fair Debt Collection Practices Act.  One of those rules requires my office to deliver the “Mini-Miranda” Warning each time we communicate with a consumer debtor.  The “Mini-Miranda” Warning reads:

 

We are debt collectors.  This is an attempt to collect a debt.  Any information we obtain during this communication may be used to collect that debt.

 

But how do we ensure that a staff and office of 18 people reads that warning each and every time we communicate with a debtor?

 

Systems!  That’s how.

 

Here’s what is in my office’s Operations Manual and systems to comply with the Fair Debt Collection Practices Act-

 

  • We have a written policy that all employees must read and agree to follow.
  • Our initial staff orientation includes training on the Fair Debt Collection Practices Act.
  • We hold regular staff training on the Fair Debt Collection Practices Act and any changes in the law.
  • We solicit from our staff ideas and new ways to improve our systems.
  • A brightly colored copy of the “Mini-Miranda” Warning is posted on, literally taped to, every staff member’s telephone.
  • A stack of brightly colored copies of the “Mini-Miranda” Warning are at the receptionist’s desk and handed to any debtor who comes to my office.
  • The “Mini-Miranda” Warning is printed on every collections documents we send from our office.
  • We police our staff and follow up with any questions or issues.
  • And more.

 

There are more components to our system, but that’s not the point.  The point is that we have systematized the way in which we handle this compliance issue.  Our system creates predictable results, which is the greatest advantage of systems.  We know that we are complying with the Fair Debt Collection Practices Act, because of our system.  We’ve taken all the “guess work” and risk out of the equation.  And, when the law changes, we can easily change the system to match the new law.

 

Every business needs similar systems to conduct its affairs.  There are no exceptions.  Every business needs systems.  Systems make it easier to become and stay profitable, while reducing risks.  But, you need to make sure the system is being implemented.  You have to “police” your staff to ensure the system is working.

 

 

What systems do you have in place? 

 

What systems need improvement?

Do you have systems that are not fully integrated into your business operations?

What are you doing to improve your business with systems as a key tool?

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