It depends - on what you need, and on the nature of the debt recovery problem you face.  Collection agencies are perhaps like sprinters; law firms are more akin to long distance runners.

Collection agencies are geared toward fast turnover and rapid recovery of debt. Their salespersons and collectors are most often paid on commission, if and only if accounts are recovered. They generally have no training in the law, and their goal is to “liquidate” the debt by attempting to secure full or part payment in a short period of time.  Frequently this hurried strategy results in a lower partial settlement.

 Law firms are structured toward litigation and results. Their personnel are mostly salaried and may work only on an hourly basis- though many law firms in the industry do work on a “contingency” basis. As a result of their higher internal costs and greater emphasis on lawsuits, results may take longer, but the incentive to accept partial payments or settlements may be less.

I have told my clients for years that if the reason for non-payment of a debt is essentially a dispute that it is A LEGAL MATTER by its very nature, the better course of action is to forego a collection agency, and move the case directly to a law firm. The matter will eventually wind up in the hands of an attorney anyway, and you will avoid the time “lost” by trying to have an agency that is without legal training or knowledge struggling to resolve A LEGAL MATTER. This likewise applies to disputes that are likely to wind up in court eventually, because of the nature of the relationship between the parties or complicating factors. Simply stated, if for any reason the matter could is going to wind up in court, the best course of action is to be proactive and get it there ASAP, while memories are fresh and documentation has not been misplaced. The longer you waste time with inappropriate collection activity, the less your chances of recovering your debt.