We’ve all heard the old saying: You can’t see the forest because of the trees.
The law firm that collects the city’s delinquent taxes is the forest, and the news stories and behind-the-scenes gossip are the trees. It’s time to shed some light on what seems to have been a consistent barrage of criticism of the law firm that has collected more than $165 million for the City of Memphis since it was hired in 2005.
Linebarger Goggan Blair & Sampson has been branded by the media, most often by The Commercial Appeal, as an out-of-state law firm that has a no-bid contract with the city. Based in Austin, Texas, Linebarger is the largest law firm in the nation that collects delinquent receivables – and it does this work for 2,200 other cities and municipal entities across the country. Our local newspaper never bothers to tell us that Linebarger is contracted with the city like any other law firm that does business with the city – under a professional services contract that does not require a bid.
Nor do our local news outlets bother to tell us that Linebarger, as it does in nearly every other city, makes it money on the fees charged against delinquent taxpayers
Now no one likes the tax collector. That’s a hatred deeply rooted in world history. But someone’s got to do the dirty work, since the city has proven it can’t. And city administrations from Herenton to Wharton have looked for other ways to collect delinquent taxes, but they stick with Linebarger because of its efficient and effective system that this municipality can’t duplicate.
Founded more than 30 years ago, Linebarger has successfully combined the advantages of a law firm with the efficiencies of modern technology to collect an extraordinary amount of revenue for its government clients, which couldn’t do this work on their own. Two years ago the law firm recovered more than $1 billion dollars for its government clients across the U.S., including that $165 million sum for Memphis.
Using their formula, Linebarger has grown into one of the largest and most successful private collectors of past-due financial obligations in the United States and has invested more than $60 million in maintaining and upgrading its collections system.
Want more? For its work, Linebarger has won four of the public-private partnership awards from the U.S. Conference of Mayors for its collection efforts.
In Memphis, the law firm has an established office with 13 employees – all of whom live here and pay taxes. While the news media likes to remind us that Linebarger is headquartered in Texas, our local newspaper never bothers to tell us that other law firms, such as Butler Snow or Ford Harrison, are headquartered in other states also.
Linebarger has some detractors in Memphis, namely folks who remain unhappy that the firm was hired under Herenton’s administration, and that the firm has retained Ricky Wilkins, the former president of the Memphis Bar Association, as its local counsel. Matter of fact, Wilkins was a lawyer with one of the most respected law firms in Memphis, Burch Porter & Johnson, when he agreed to take Linebarger as a client.
Want more?
A major criticism of Linebarger is the 20 per cent fee charged against delinquent tax payers. This is a fee allowed by law, and only 11 percent of it is paid by the city to Linebarger. In its six years here, Linebarger has collected more than $165 million for the city. In order for the city to take tax collection in house, it would have to buy a new system, provide working space, hire employees, pay those employees salaries, healthcare insurance, and pensions, which at last calculation would cost at least $2 million. Why would the city want to raise taxes to collect taxes.
In recent months, Linebarger and the rest of the city learned that two of its employees possibly were involved in illegal actions. Linebarger moved quickly against both of these employees, immediately firing them and opening its offices and computer files to all investigators.
It’s unfair to tar and feather this law firm because of the actions of two employees. It’s easy to say that not a company in this country, including The Commercial Appeal, that hasn’t had employees violate their trust. Yet, because Linebarger takes care of the public’s business and the collection of delinquent taxes, this firm is subject to unparalleled scrutiny and criticism by people who have been penalized for being delinquent with their tax payments, and by the media that, in its rush to publish a story, fails to seek fairness and balance which, so often, they claim to do.
The proof is in the pudding. Last time we checked, city government had a better collection rate that the Shelby County Trustee, who always thinks it should collect for city government.
The truth is that a long period of time must pass before a tax bill is even placed into the collection process. In the spirit of taking responsibility for yourself,every one of us has an easy way to avoid getting to know Linebarger: Just pay your taxes on time.
