With over 25 years of experience in the insurance industry, I’ve had the unique opportunity to see both sides of the litigation management equation—first as a defense attorney representing carriers, and later as a claims professional hiring counsel to protect insureds. Despite decades of advancements in technology and claims practices, one critical aspect has stubbornly remained unchanged: the strained dynamic between insurers and their legal counsel. The pervasive “us versus them” mentality continues to undermine collaboration, inflate costs, and prolong claim resolutions. Instead of fostering a true partnership, the focus has often shifted to controlling defense costs, leading to rigid oversight rather than meaningful teamwork. Yet, I firmly believe this doesn’t have to be the case. True collaboration—where counsel and claims professionals align around shared outcomes—isn’t just a lofty goal; it’s a necessity. The question is, are we ready to move beyond surface-level cooperation and embrace a partnership that truly delivers value?
Over the next few articles, I will delve into the persistent challenges plaguing litigation management and introduce practical solutions to bridge the gap. While these insights may seem straightforward, the fact that these issues persist underscores their complexity. This article serves as the starting point, outlining the problems.
I will be exploring solutions to this problem and present the Decision+™ approach—a framework designed to accelerate decisions and reduce payouts, which fosters genuine collaboration, leverages innovative strategies, and embraces technology to transform litigation. Together, we can break free from outdated practices and create a more efficient, collaborative future. Stay tuned for the solutions ahead.
Problem 1 – The Carrier-Counsel Divide
A key issue in litigation management is the lack of alignment between carriers and counsel. Many industry guidelines emphasize the importance of adjusters maintaining control of claims during litigation:
“Adjusters should proactively handle the claim in litigation and not abandon the claim to defense counsel just because the claim is in litigation.”
Despite these guidelines, adjusters often relinquish control once litigation begins, treating attorneys more as external agents than as integral members of the claims team. This hands-off approach results in a leadership vacuum, leaving attorneys to manage cases without the benefit of a cohesive claims perspective or strategic guidance. The outcome is a reactive process with limited opportunities for meaningful collaboration, hindering both efficiency and effective resolution.
Left to navigate cases independently, attorneys often make decisions that are technically sound but disconnected from the carrier’s broader objectives. The lack of alignment can lead to:
- A focus on litigation tactics over settlement strategies increases filings, prolonging cases and driving up costs.
- Overuse of depositions and document requests without clear plans inflates expenses.
- Without guidance, attorneys may prioritize billable hours over efficient resolutions, conflicting with cost-containment goals.
The carrier-counsel divide highlights a critical need for stronger integration and alignment. Without a unified approach, inefficiencies persist, and opportunities for timely and effective case resolution are missed. Building a true partnership based on shared goals and open communication is essential to overcoming these challenges and ensuring better outcomes for all stakeholders, especially the insured.
Problem 2 – Costs and Outcomes
The disconnect between carriers and counsel has significant financial and operational consequences, driving inefficiencies that disrupt the claims process. Ineffective collaboration exacerbates three critical issues:
- Delayed Resolutions: Without streamlined decision-making, claims linger in litigation for extended periods, escalating frustration and costs.
- Escalating Costs: Poor coordination often results in prolonged lawsuits that inflate expenses without delivering meaningful value.
- Erosion of Trust: Lengthy litigation leaves policyholders feeling overlooked, undermining trust and damaging the carrier’s reputation.
Efforts to address these challenges through communication mandates and litigation plans have had limited impact, largely due to the entrenched adversarial mindset between carriers and counsel. The ongoing emphasis on cost control rather than collaboration continues to perpetuate inefficiencies and dissatisfaction for both sides.
Problem 3 – Culture and Billing
At the core of the carrier-counsel division lies a systemic issue: the culture of litigation management within the insurance industry. The dominant focus on cost containment often overshadows the need for collaborative, outcome-driven relationships. Industry guidelines frequently emphasize the importance of aligning legal strategy with claims objectives:
“Attorneys must align with the overall claim strategy and obtain adjuster approval for significant decisions such as filing motions, hiring experts, or pursuing depositions.”
However, in pursuit of cost control, the industry has swung to extremes, implementing stringent billing guidelines and complex coding requirements. While these measures aim to rein in expenses, they often have unintended and counterproductive consequences:
- Administrative Overload: Attorneys spend an increasing amount of time ensuring bills meet approval standards rather than focusing on meaningful casework. This adds layers of bureaucracy, detracting from substantive progress on cases.
- Micro-Management of Tasks: Carriers frequently require pre-approval for even routine tasks as a cost-control measure. Instead of fostering open dialogue about case strategies, these conversations often occur indirectly through billing systems, reducing opportunities for collaboration.
- Frustration and Distrust: Restrictive guidelines leave counsel feeling stymied and claims perceiving attorneys as billing-focused, eroding trust and hindering teamwork. Attorneys may feel undervalued or constrained, leading to a transactional relationship where both parties operate defensively. This dynamic discourages proactive problem-solving and reinforces a mindset of minimal compliance rather than genuine partnership.
The cultural divide stems from viewing attorneys as cost centers rather than strategic partners, limiting their ability to craft solutions and drive effective resolutions. This compliance-focused relationship stifles innovation and collaboration, leaving carriers with higher costs and delays, and attorneys constrained by rigid controls. Breaking this cycle requires shifting from cost-control to a value-driven approach.
Long-standing issues—misalignment, cultural divides, and inefficiencies—have persisted throughout my three decades in the industry. Change is a necessity.
Problem 4 – Misaligned Priorities and Increased Documentation Demands
A critical issue in litigation management arises from a lack of understanding between claims professionals and legal counsel regarding their distinct roles, responsibilities, and external pressures. While both aim to achieve favorable outcomes for the insured and the carrier, their differing methods, priorities, and incentives often clash, undermining collaboration and amplifying inefficiencies.
Legal counsel, incentivized by billable hours, dedicate significant time to documenting their work—efforts that may not always align with the carrier’s broader goals. Meanwhile, claims professionals focus on efficiency, striving to resolve cases swiftly and cost-effectively while also managing mounting scrutiny from internal auditors, regulators, and compliance teams. This dual burden of efficiency and oversight has increased demands for meticulous documentation at every step, creating friction between the two groups.
The disconnect manifests in several ways:
- Documentation Overload: Attorneys feel encumbered by frequent requests for detailed reports, while adjusters grapple with the pressure to justify their decisions to superiors, auditors, and regulators, often in real time.
- Strategic Misalignment: Attorneys, concentrating on legal nuances and litigation risks, may lose sight of broader claims strategies. Conversely, adjusters, preoccupied with timelines and audit compliance, may overlook critical legal considerations.
The lack of alignment between claims professionals and legal counsel creates a cycle of inefficiency, with each side constrained by competing demands and priorities. This misalignment not only hampers collaboration but also detracts from achieving timely, effective outcomes for all stakeholders. Bridging this gap requires a shared understanding of roles and a commitment to aligning strategies with overarching goals.
Problem 5 – The Impact of COVID-19 on Staffing and Collaboration
The COVID-19 pandemic further intensified these challenges by introducing new pressures on both claims departments and legal counsel. Remote work, staff shortages, and increased caseloads have forced both sides to “do more with less,” often under strained circumstances. The demands for enhanced documentation and compliance have only grown in this environment.
For claims professionals, staffing reductions and remote operations have disrupted workflows, resulting in delays in decision-making and reduced capacity for active oversight of litigation. Attorneys, meanwhile, have faced similar staffing challenges, coupled with court backlogs, increases in nuclear verdicts and procedural changes that demand additional effort to navigate. The combined effect has heightened existing tensions, as both parties feel overburdened and under-supported.
Key impacts of the post-COVID environment include:
- Increased Scrutiny: Carriers face higher demands from regulators and auditors, requiring extensive documentation and justification for claims handling and litigation decisions.
- Reduced Collaboration: Remote work and virtual communication tools have made it harder for claims professionals and attorneys to engage in the face-to-face discussions necessary for building trust and aligning strategies.
- Burnout and Attrition: Both claims and legal teams are experiencing high turnover rates, leading to a loss of institutional knowledge and continuity, further complicating the alignment of goals and strategies.
As noted, the COVID-19 pandemic has intensified challenges in litigation management, with remote work, staffing shortages, and increased caseloads disrupting workflows and straining resources. These pressures highlight the urgent need for a more adaptable, collaborative approach. Prioritizing clear communication and shared strategies is essential to building a resilient framework for effective litigation management.
Looking Ahead
The problems outlined in this article underscore the urgent need for a fundamental transformation in litigation management. These long-standing issues—misalignment, cultural divides, and inefficiencies—have persisted throughout my three decades in the industry, now intensified by post-COVID pressures. While these challenges are significant, they are not insurmountable. Addressing them requires a deliberate shift in mindset, where carriers and counsel move beyond entrenched adversarial dynamics to foster trust, mutual respect, and alignment around shared goals.
At its core, this transformation is about reframing the carrier-counsel relationship as a partnership, one where both parties are aligned around a common purpose: achieving fair, efficient, and value-driven claim resolutions. It is only through collaboration and open communication that the full potential of this partnership can be realized, benefiting insureds, carriers, and counsel alike.
Future articles will explore actionable solutions, innovative strategies, and frameworks like my Decision+™ approach. Together, we can break free from outdated practices and transform litigation management into a strategic advantage. Stay tuned for the next steps toward meaningful change.
