I would bet that the lawyer and collections agency either do not respond, or respond but wait until the response period for the default judgement expires before they agree to any kind of settlement. If you don't file a response they will get a default judgement, that will add another major negative to your credit report, they will then likely garnish your wages until the debt is paid. You need to file the response before that 10 day period runs out, or else there is no way the will even consider talking to you.
The collections agencies preferences are likely in this order
1.) Get a default judgement and not have to worry about collecting/negotiating
2.) Get full payment from you without going to court.
3.) and 4.) Settle for partial payment without going to court or Go to court and get a judgement
The order of 3 and 4 will vary based on the documentation they have, and the additional pay due to the law firm for going to court. As Tobias_Research mentioned the #1 priority needs to be stopping the default judgement
- - - Updated - - -
As a note (not to you AdjusterJack, as I am sure you know this, but to others)
"Less Negative" is a subjective term, as far as FICO scores go there is no difference between paid and unpaid collections accounts. However creditors underwriters are free to view the information as they wish, and many do view it more positively.
Also while the collection agencies are contractually obligated to report accounts factually (including not removing them) There are definitely less legitimate agencies that will offer "Pay for Delete" options when asked.

