Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Bill Carcache with Fox-Pitt.
Bill Carcache – Fox-Pitt Kelton
Good evening. First question I guess is given with your greater emphasis on legal collections, how do you think about the impact on your expenses and how should we think about that going forward if we see a shift from call center collections to legal, kind of the net bottom line impact or at least the net impact on your expense ratios?
Steve Fredrickson
This quarter there was again kind of a unique set of circumstances where we pushed through more volume than we might have otherwise chosen to do because of some legislative changes, but the answer to your question over the long run is, we think it's possible that, that legislative trend could continue and we think it's possible we could need to push a greater percentage of our accounts into the legal channel.
It's always our stated preference to try and work this out in our call centers and avoid legal action, if we can. That said if this trend should continue or grow that's really the reason we're building this internal capability. We can have much stronger collection results and do so at a much more reasonable rate in the markets that we're currently operating so, we're very excited about building up this internal capability.
We'll still rely on some external firms where we have strong performance and I think the combination of the two will lead us to have very negligible impact from a net fee perspective, if we have to increase our legal collections significantly.
Bill Carcache – Fox-Pitt Kelton
Can you say anything about any kind of impact on margins or I guess what that would do to just overall expenses?
Kevin Stevenson
This is Kevin. I think Bill, one of the things it would be it would shift kind of geography a little bit. You would end up from external to internal legal the internal costs are going to be centered around salary line for our attorneys and you still have the same costs in the legal line, but the fees you would have paid the contingent guys would move up into the salaries and our hope would be that our people will be a lot more efficient from an expense to cash collections ratio.
Bill Carcache – Fox-Pitt Kelton
Relative to the external lawyers.
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