A collection agency is cheap and persistent but has no legal power; a commercial buyer can ignore it indefinitely. A lawyer has the power but is paid by the hour or by retainer, with no incentive to settle fast, and usually does not do the follow-up work. FundRaksha combines the two: a dedicated advocate who sends the notice within 24 hours, does the negotiation and files if needed, paid 30% only on recovery. 60% of cases settle before court.
The collection agency model
A collection agency takes your file and assigns a caller. The caller phones, emails and sometimes visits. The fee is a percentage of recovery, which is attractive. The problem is power. A commercial buyer's accounts manager knows that the caller cannot file anything. The calls are an irritation, not a risk. Agencies that compensate with pressure tactics expose you, the client, to complaints and counter-claims, and damage the buyer relationship far more than a formal notice would.
Where agencies do work is with buyers who simply forgot or needed a push, which is exactly the segment that automated reminders handle at a fraction of the cost. See payment reminder automation.
The lawyer model
A lawyer sends a notice on letterhead that the buyer takes seriously, and can file in the right forum. The problems are commercial. Most lawyers charge a fee for the notice, a fee for drafting, a fee per hearing, regardless of whether you recover a rupee. Their incentive is not aligned with fast settlement. They also rarely do the unglamorous follow-up work of calling the buyer's accounts team, chasing a promised payment or reconciling a ledger; that falls back on you. And for a small supplier, finding a good commercial lawyer in the right city, briefing him and managing him is itself a project.
Side by side
| Collection agency | Independent lawyer | FundRaksha Legal | |
|---|---|---|---|
| Who contacts the buyer | Caller or agent | Advocate | Dedicated advocate |
| Legal power to file | None | Yes | Yes |
| Follow-up and negotiation | Yes, persistent | Rarely | Yes, by the advocate |
| Fee structure | Percentage of recovery | Per notice, per hearing, or retainer | 30% of recovery; nothing upfront |
| Speed to first legal step | Never, or hand-off to a lawyer after weeks | Depends on the lawyer | Notice within 24 hours |
| Incentive | Recover something | Bill time | Recover fast and in full |
| Risk to you | Unlawful tactics, reputational | Cost without result | Court fees only if a matter is filed, quoted upfront |
| Coverage | Local | Local | All India |
Why the combination works
The reason 60% of FundRaksha cases settle before filing is that the buyer receives, within 24 hours, a notice from someone who can and will file, and then receives follow-up from the same person. There is no gap between "the agency gave up" and "the lawyer is engaged", which is where most B2B debts die. And because the fee is 30% of recovery with nothing upfront, the incentive is to close the matter at the lowest rung of the ladder, not to run up hearings.
FundRaksha LegalTech Pvt Ltd is the technology and process company; the legal work is carried out by enrolled advocates assigned to each case. You get the discipline of a managed service and the standing of an advocate.
When each option is right
- Buyer forgot or is mildly late: automated reminders through FundRaksha Collect at 1%. No agency needed.
- Buyer is silent, disputing without basis, or past 90 days: advocate-led recovery through FundRaksha Legal.
- Complex contractual dispute with large sums and counter-claims: a litigation lawyer, possibly through FundRaksha's advocate network.
- Consumer debt or personal loans: not FundRaksha; this is a different field with its own rules.
For the fuller buying guide see debt collection agency vs law firm and how to choose a debt collection agency. To start, book a free consultation.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.