Tag Archives: Litigation Management

2 Approaches To Early Resolution And Cost Savings For Litigation Guidelines

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Let’s State The Obvious: Early Mediation Can Lead to Lower Costs of Defense

Most insurance and claims adjusting companies have Defense Counsel Guidelines.  I’ve seen many of them.  It’s hard to remember, though, seeing one in which a contingency plan for early settlement was addressed.

Most guidelines I’ve seen are focused on having a case evaluated for settlement at 6 months.  By that time, your defense counsel will have interviewed the client, propounded initial discovery, received and reviewed the medical records and taken the plaintiff(s)’ deposition(s).

Perhaps you could reduce your ALAE significantly by including early mediation in your guidelines. (Transparency caveat:  I’m a mediator and I have a bias.  I mediate cases nationwide.)

2 Ways To Include Mediation In Attorney Guidelines

Here are two suggestions.  One is fast-tracking that process to 3 months.  The second is requiring your lawyer to approach plaintiff’s counsel about mediation within the first 6 months.

  • Fast tracking settlement.  In three months, it’s unlikely you’ll be able to get all of the medical records and receive responses to discovery and take the plaintiff’s deposition.  Ask yourself, though, if you really need all of that information to settle the case.  In some cases, particularly cases of clear liability, the answer is:  probably not.  Yes, you may settle some cases for a little more than having all of the usual discovery would suggest.  On the other hand, plaintiff’s counsel may be willing to take less money in return for not having to work the case up.  You will also be saving attorneys’ fees and litigation costs and closing files.
  • Mediation date within 6 months. There seems to be an institutional bias against the defense being the first side to suggest a mediation.  The underlying fear is that plaintiff or her counsel will conclude your case is weak and their settlement aspirations will zoom skyward and their bargaining posture will harden.  Do you have any data to support that bias?  I haven’t seen any.  Try it out, then calculate your overall savings.

I applaud all sides when they come to me to mediate a case either pre-suit or very early on in the litigation.  I try to set the expectation that the exploration of settlement at an early stage is an opportunity for both sides to be realistic, not only about the value of the case, but also about saving litigation costs.

Getting Creative And Reducing Claim Costs Without Sacrificing Quality – Part II

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Building blocks on which to create a new foundation to improve processes

Last month, I discussed the building blocks needed to reduce claim and litigation costs, while still maintaining a strong focus on quality. Those building blocks included:

  • collecting current data about your claims and litigation
  • evaluating the claim and litigation work itself
  • settling on a carrier claim and litigation handling philosophy

These building blocks create a foundation on which to build new processes and procedures that will reduce your claim and litigation costs, and maybe even decrease you volume as well. I refer this building process as looking at What I Have, What I Want, and What I See.

What I Have – All This Data

The data you collected regarding the current state of your claims and litigation is an excellent starting point. Examine your data and identify the areas that you wish to improve.

For a couple of reasons, while the amount of your legal spend may a visible target for improvement, don’t spend too much time on rate-issues first.  This is because the impact of improved processes and procedures will likely decrease total spend naturally, without having to address rate issues. Focus instead on issues like overall litigated volume (the number of pending litigated claims), cycle time (the average amount of time litigated claims take to close from inception), severity (of your pending litigated claims), and other factors. Developing processes and procedures that improve these other factors is a good starting point.

What I Want – Creating The Benchmark

Look again at your non-dollar data. Think about what you believe those numbers should reflect. For instance, if the average time it takes a litigated claim to go from inception to closure is two years (730 days), you know that, on average, you will be paying panel counsel for two years to bring that matter to a close. Based on your knowledge and you your industry contacts, determine whether this number appears high. Do this for other non-dollar metrics that you have measured.

Look at each area you wish to improve and consider a practical benchmark and goal you would like to achieve. My advice is to not set arbitrary goals, as they bear no particular relation to what you will be able to achieve, and thus set your organization up for disappointment or worse. Instead, work with stakeholders in the process and think about how your metrics work together to form a complete picture.

Set incremental measurement points. Hypothetically, you may be starting with a two year cycle time and wish to set a benchmark objective of reducing that by six months, followed by a long-term goal of reducing it to one year. Again, always make sure that your objectives align with the other information you are obtaining. Do your objectives make sense in light of the jurisdiction, the severity of the portfolio, the type of case, and the claims handling philosophy of your organization?

You may have a very diverse book of cases and wish to develop benchmarks and goals first by line of business, or by stakeholder. In fact, when you start objectively considering all of the factors involved, you may end up with benchmarks and goals that look something like this:

  • Overall Litigated Claim Pend Time – Current Average: 730 days
  • Motor Vehicle Accident (simple): 550 days (benchmark); 365 days  (goal)
  • Product Liability 700 days (benchmark); 650 days (goal)
  • XYZ Claim Professional 680 days (benchmark) ; 600 days (goal)

These numbers are purely arbitrary for the sake of example, but they are illustrative of processes you may wish to consider when examining your current situation and deciding how you’d like them to look in the future.

What I See – You Have To Look At What Is There

A continual focus on quality is critical. Higher-quality claim and litigated file management results not only in lower indemnity payments, but in decreased costs as well. As someone who has managed thousands of files with bad faith allegations, there is nothing more expensive than trying to successfully litigate a poor quality claim file.

One of the core building blocks of the process are evaluations – evaluations of all professionals involved in your litigation life-cycle, from claims professionals to attorneys. In looking at those evaluations (whether through internal or external audit), identify those practices that need to stop and those that are more likely to extend the cycle-time of your cases.

A simple example — in reviewing a number of litigated claims last year, I noticed a consistent pattern of defense counsel granting numerous extensions to opposing counsel to respond to written discovery. These numerous extensions were causing files to last for months with no activity (other than counsel billing for those activities associated with granting the extension). During my review, I made note of such patterns and then developed ways of addressing them through new procedures and processes. In addition, I also considered what I discovered in these evaluations and my solutions for addressing these issues in my benchmarking and goal-setting.

In the next and final part of this series, I will explore the nuts and bolts of the procedures, processes and guidelines that can be used when moving forward with a revamp of your litigation management system.

Time to Get Creative – Reducing Claim Costs without Sacrificing Quality (or your sanity)

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Bright ideas will help reduce legal costs while still getting great service

Even as the country continues its difficult economic recovery, Moody’s recently concluded that P&C personal lines insurers remain financially sound. While such a report is good news, Moody’s also noted that challenges such as rising claim severity trends and significant property catastrophe risk remain. All this leads to an increased pressure to reduce costs and close claims.

The reality that claim and litigation departments are cost centers as opposed to income generators increases these pressures. Claim and litigation departments are also asked to do more with less resources and are under increasing pressure to close claims and litigated files faster than ever, while still maintaining claim handling and litigation management best practices. With all these challenges, how do claims professionals succeed? They get creative.

What You Know and More Importantly, What You Don’t Know

Before you can make changes and employ new processes, you have to know what you know and what you don’t know.  Obtain as much information as you can regarding the following:

  • Number of current litigated and non-litigated claims, broken down by type and severity
  • Average length of pending litigated and non-litigated claims
  • Average cost per closed litigated and non-litigated claim file
  • Average number of days necessary to close litigated and non-litigated claims
  • Average amount paid (indemnity) per closed litigated and non-litigated claim

These are just the basics.  If you have more information available, get it.If you don’t have this information, you have gained some valuable knowledge as well, namely, that you will need to develop or implement ways of tracking such information as part of your plan.

Who Is Doing the Work?

Next, you have to evaluate the strengths and weaknesses of your claim handlers, claim managers, outside counsel, and any other vendors you employ to handle claims and litigation.  If you haven’t formally evaluated these folks in a while, now would be a good time to do so.

Find out what they do, how they do it, and ask them for feedback regarding how they think that they can do their jobs better.  One of the biggest problems I’ve seen are companies that get in the way of their employees being successful often through employing processes and procedures that look good on paper, but don’t make sense in practice.  The only way to know if this is occurring in your organization is to spend some quality time with the people who are doing the work.

And don’t leave out the lawyers!  Although some may believe that panel counsel are only interested in billing you as much as they can, the good ones are also in an excellent position to know if your litigation procedures are costing the carrier money.  They can also provide procedural and process changes that may result in moving litigation to conclusion more quickly.

Know Thy Carrier

While all carriers want to decrease costs, decrease claims, and decrease litigation,  there are different philosophies as to how to accomplish these goals.  Some carriers may want to avoid litigation at all costs because they don’t want to pay legal fees and thus, they may be willing to pay more on questionable claims in order to avoid litigation.  Some carriers may want to take a hard-line approach with all claims and litigation (i.e. if they can’t prove it, we’re not paying it).  Some carriers take a more practical, business approach and want to do a cost-benefit analysis regarding the payment of claims and litigation.

You must know your carrier’s philosophy before you can make changes that count.  Moreover, the philosophy you choose is the one that is going to be the face of your claim and litigation department for the world to see, so make sure it’s the face you want to display consistently.  Companies that do not have, or do not know, what their claim and litigation philosophy is will not be successful at consistently reducing costs and closing claims and litigation.

In order to develop your philosophy, you will need to work with the balance of senior management and other relevant stakeholders to discuss the options and arrive at a conclusion that everyone is comfortable with promoting throughout the organization. Depending upon the size of your carrier, the number of people involved, and the difficulty you have obtaining information, going through steps one through three may take approximately two to six months.  However, once you complete these steps, you will be armed with everything you need to sit down and draft your new claim and litigation management plan.

Check back in December for part two of my blog that will discuss initial steps in your new claim and litigation management plan and provide an example of a plan that was successful for me.

3 Ways To Help Defense Counsel Help You Make Claims Management More Efficient

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You can’t always get what you want but you can get what you need – If you ask for it!

Thank you Rolling Stones for reminding me what sometimes needs to be done to help get the job done better. As claims professionals we are always being stretched to do more with less, and sometimes can never get what we need from our partners in the industry; our hired defense counsel.  Getting to the basics of claims management to evaluate losses, setting reserves and moving a case to resolution requires a good partnership with counsel. Given the current economic environment it has never made getting what you need from defense counsel so important.

So if you can’t always get what you want, less files and more staff to help, how do you get what you need to help?

Here is a novel response: Ask for it!

Defense counsel correctly spends much of their time focused on defending their clients. Unfortunately, and all to often, many counsel reports are designed to justify some activity in the invoice rather than providing useful information. Does reporting about sending medical authorization out really provide any valuable analysis to help the claims professional make a reserve or resolution decision?

Getting what you need

So how does one focus counsel to help provide better information for claims?  Try these three suggestions to help them help you get better results:

  1. Educate counsel on the world of claims – Attorneys are great at defending their clients, but many no very little about what goes into a claims professional’s day.  When speaking to attorney friends I am often amazed how little they truly know about the day-to-day business of claims.  Spend a few minutes telling your counsel about your claim file responsibilities such as reserving, regulatory requirements, documentation and how many files you have, will help the understand your needs better.  Even a basic discussion of file counts will enlighten counsel to what it means to have to go through hundreds of correspondence a week while still having to make appropriate decisions.
  2. Give counsel a clear understanding on what you need to make decisions – If you want counsel to provide damage assessments early in the case, even with limited information, then tell them exactly what you expect and hold them to it. If you don’t want them to put a number on a file until discovery is complete then be clear about that too (although I would not recommend waiting till the end – and we can save that for another blog article). Today’s attorneys are being asked to complete different reports and forms and follow different reporting guidelines for a variety of clients.  If you don’t tell them specifically what you need to help you get your job done then you will never get what you need. It may take a little extra time when the case is assigned, however, it will pay dividends down the road with information that will help you make claim decisions better.
  3. Be persistent – The squeaky wheel always does get the grease. Attorneys I speak to want the interaction with their clients. If counsel doesn’t provide you what you need then call them up and remind them again. Getting what you need requires a little effort and there may be a break in period where they learn exactly what works and what doesn’t. Accepting what has always been is no way to ever get what you really need. So speak up, don’t be shy, and don’t accept what hasn’t worked in the past.

No attorney is going to say that they don’t want to make a claims professional’s job easier, so help them to help you. Start by telling them what you do, ask for what you want, and then make sure they do it.

You may not get what you want all the time, but you will get what you need.

How do you help counsel help you?

AMA Study Finds Almost 1 Malpractice Claim Is Filed For Every Physician – Not Really Shocking

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No surprise I guess – Doctors remain targets of malpractice

Despite being in this business for 20 years, even this report left me in a momentary state of shock. A study from the American Medical Association (AMA) reports that an average of 95 medical liability claims are filed for every 100 physicians, almost one per physician. The AMA study looked at 42 specialties and was from a sample size of over 5,800 physicians.

The report reminded me of the question my now Ob/Gyn brother asked me as he was graduating medical school. “Who gets sued more? Regular obstetricians, high risk obstetricians, or ones that specialize in fertility?” My answer to him at the time was “they all get sued.” I did not truly realize how true that statement was until I read this report (for my brother and anyone else that may be interested, the AMA says 69.2%  Ob/Gyn doctors have been sued with Ob/Gyn physicians averaging 215 claims per 100 hundred physicians).

The AMA report also found:

  1. Nearly 61 percent of physicians age 55 and over have been sued.
  2. There is wide variation in the impact of liability claims between specialties. The number of claims per 100 physicians was more than five times greater for general surgeons and obstetricians/gynecologists than it was for pediatricians and psychiatrists.
  3. Before they reach the age of 40, more than 50 percent of obstetricians/gynecologists have already been sued.
  4. Ninety percent of general surgeons age 55 and over have been sued.

Med-Mal claims are not an indication of frequency of medical errors yet the cost to defend them is high

As the AMA reported in New AMA Report Finds 95 Medical Liability Claims Filed for Every 100 Physicians:

The number of medical liability claims is not an indication of the frequency of medical error, as the physician prevails 90 percent of the time in cases that go to trial.  While 65 percent of claims are dropped or dismissed, they are not cost-free.  Average defense costs per claim range from a low of over $22,000 among claims that are dropped or dismissed to a high of over $100,000 for cases that go to trial. This leads to increased costs for physicians and patients.

Are you shocked by this report or is it just par for the course?

3 Suggestions To Beat The Summer Slow Down In Claims (If You Do Slow Down)

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It’s nice to spend time on the beach, but use the summer slow down to make some improvements

Let’s face it – no matter how busy your organization is, come August often times things begin to slow down. It seems everyone is on vacation, and while there is less coming in, there is still much to do. Now is the perfect time to clean up messes and get set for the fall push.

1. Managers & Supervisors

The summer is a great time to work on performance and training issues with your claims staff. With courts slowing down, fewer crises to deal with and less phone calls to take, now is a good time to work with claims handlers to get stronger. Even if your performance reviews are not due for several months, spend some of the extra time you may have to look for learning opportunities. Help claims handlers clear some “dead wood”, and mentor them to reach new goals for the future.  With the extra time there will be fewer interruptions and spending some of that extra time encouraging a handler to look for new ways to excel will benefit everyone.

2. Claims handlers

Wouldn’t it be nice to clear all those tasked items and clean your desk up. It’s been a busy year and things have been piling up. Emails, reports, bills,  and closings are just a few of items that can so easily stack up on a desk that need to be dealt with.  Pick a few items to clear from your long list of tasks and try and get to a clean slate. Here are a few more suggestions:

  • Clear the email folder and organize that in box so the email cascade can be more manageable
  • Look at your pending for older files that can use a little attention, or even better, be closed. Sometimes those older files just need a little push to get them to to the next level. Use any slow down time to reduce that file count.
  • Get through your snail mail. Yes people still send mail the old fashion way and if you spend a few hours a week cleaning and filing away that stack of papers on the the corner of the desk you will be better off before the next push.
  • Meet with your manager and look for opportunities to learn and improve your skills.

3. Claims Executives

Time to break out the strategic plan.  When was the last time you looked into the future? Don’t wait for Lilly pads to take over the lake (see my posting You Can’t Wait Till The Last Minute To Improve You Operation – Planning Starts Now!) take a look at future issues now. Explore your technology needs and look for opportunities to improve your operation. Focus on some key areas to target for lowering costs such as in areas of subrogation and salvage. There are opportunities there to re-tool your operation and get it ready for future growth.

Tell us how you best use slower times to improve your operation!

Cutting Costs Without Overloading The Claims Handler – Part 2 Of The Series

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Trying To Save Money But Can’t Figure Out Which Road To Take?

Last week I offered the first of two solutions to reduce costs in key claims cost cutting areas when hiring full time staff is not an option. As I noted in the post, 2 Cost-Cutting Solutions To Get Work Done Without Overloading Claims Handlers, overworking claims handlers with additional tasks not part of their core job function – to evaluate and settle claims – can result in some aspect of their job suffering. Key cost cutting initiatives, such as Anti-Fraud and subrogation recovery, get put aside by the handler and never get the fullest attention needed to be successful.

Having achieved improved results in my prior life, I suggested both outsourcing and hiring a dedicated part-time employee to handle certain tasks. The first example I presented centered on having an outsourced vendor put a resource “on-site” for improved results. In the context of an Anti-Fraud solution, having the vendor “on-site” resulted in more fraud reports to the states, improved claim handling through knowledge transfer, and lower costs. The program was a success.

This example tackles a similar problem of trying to improve results without the need to hire a full time employee in the area of litigation management bill review.

Claim Handlers Really Don’t Do A Good Job Of Cutting Legal Bills – A Part Time Hire Solves The Problem

Conventional wisdom has been that claim handlers are in the best position to review legal bills on the claim files they work on. The reality is legal bill review, for most claim handlers, is a dreaded task considered a necessary evil.  In addition, I find that some claim handlers rarely cut inappropriate charges because they develop a working relationship with the attorney and do not want to hamper that relationship for what are felt to be minor issues.  However, when the bill review process is separated from the claims handler, many of these concerns or conflicts go away. Handlers can focus on managing claims and developing open working relationships with counsel and billing issues can be addressed by others.

Possible Solutions

In looking for a proper solution I considered vendors that review legal bills as well as bill review software.  Legal billing vendors that provide the service usually get paid based upon the amount of money they save. This type of review can create problems and can sometimes be perceived as a conflict.  I was not trying to create an adversarial relationship with counsel, so this idea was put aside. Bill review software provides an excellent job of catching billing discrepancies that frankly can’t be caught manually. Unfortunately, billing software requires a larger capital investment, IT involvement, and time to implement. While the projects often pay for themselves through reduced legal fees, at the time, it was not a road that I was able to follow. What I needed was an attorney who understood the legal process and could work with, and speak with, counsel on billing issues. As I was working in a claims organization that hired many lawyer/claim handlers it seemed like a natural solution.

How To Make It Work

While I did not want to hire a full time attorney, I was approached by someone who knew a stay-at-home attorney looking to work 20 hours a week in a flexible environment. Being able to provide that kind of work load is sometimes not possible for many companies, however, given what I was looking for, the solution to my problem seemed to have found me. At the time, the company I worked for had an excellent claims system (since I helped design it I was always going to say this) which made it easy to set up a part time employee remotely. A new process was designed to allow claim handlers to send our litigation bill reviewer invoices for compliance analysis and review.  At first it was decided to limit reviews to invoices with known issues and ones over a certain dollar amount. Bills could be forwarded electronically, reviewed, analyzed and returned to the handler with suggested changes. A form letter was instituted where disputed charges were listed and explained. The new program was in place and it worked.

In the first year the program reviewed over $15 million of legal invoices. On average, legals bills were reduced by 10% with most of the reductions due to billing errors, duplications and failing to comply with agreed upon rates. The most fascinating findings came when we opened the services to Third Party Administrators doing work on the company’s behalf. It turns out that bill review reductions were 2-3% higher for work being done for the TPA than for work being done for in-house claim handlers. No matter what the reason, the bottom line was over $1.4 million dollars saved in the first year alone.

Lessons Learned

  • Claim handlers, despite being close to the claims process, were not in the best position to review legal bills
  • Attorney’s seem to be a little more cautious reviewing their billing submitted to the company directly than when submitted to the TPA
  • A small amount of diligence can result in huge savings – these savings add up and were clearly worth the small investment to retain a part-time employee

The solutions I offer here, and the prior post, are not limited to world of SIU and litigation bill review. Hiring a part-time employee, or “on-site” vendor,  to manage any initiative is a great idea when specialized knowledge is an appropriate way to get better results and the need for a full time employee is not needed. As noted, subrogation and salvage recovery are great areas that can also benefit from these types of programs.

I have just offered up two solutions to the age-old problem of trying to do less with more. While the solutions are not new, sometimes to become more effective you need proper execution and new ways to look at old problems.

The 5 Essential Components of Defense Attorney Reports That Can Improve Claims Costs and Outcomes

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Why Are Attorney Evaluation Reports Sometimes So Light?

I was recently conducting an audit of claim files and had the opportunity to review a significant number of Attorney Evaluation reports from a variety of law firms. Like many other things in life, some were better than others.  What seemed to be most glaringly consistent was the inability of counsel to truly provide an assessment of exposure and what the case is worth.

When asked to assess exposure, the typical response was to state that the insured had a 50% chance of winning the case. While I would agree that there are instances when this may actually be the case, often times it’s not. One report I read stated that the attorney felt the case was probably defensible, but with additional information they may not be able to defend the case. Why is it so difficult for some attorneys to give a comprehensive assessment? Is there a fear that if an attorney says one thing, they can’t change their mind later? When circumstances change, new information is developed, or issues are uncovered, it is perfectly reasonable that evaluations need to be adjusted accordingly.

I would submit that an experienced defense attorney, that has seen hundreds of similar cases, has a pretty good idea of what the issues are in a case. Claim handlers can, and should, expect their defense counsel to clearly evaluate liability and damages and express those evaluations coherently in their reports. Counsel should be providing full evaluations at least every six months or after significant changes in discovery.

At the very least, attorney evaluations need to provide the following 5 components in their reports:

  • Introduction – All reports should start with a few sentences outlining the facts of the claim, and should not require reading though 8 pages to find out what the case is about. An example of a concise introduction would be “This case is about the alleged wrongful death of a 29 year old stockbroker, father of three children, after he was struck by our insured’s vehicle being driven by an intoxicated driver.” In fact, that type of introduction can be used in every letter sent by defense counsel regarding the case.
  • Factual Summary – A summary is a summary (I know – never define a word with the same word – but it seems appropriate here). When line-by-line details are relevant, then they should be spelled out. Otherwise, a concise assessment of important facts, and how they impact the case, is all that is needed to explain all aspects of the file. Counsel should also describe pertinent testimony, how it impacts liability or damages, and state how the witness would present to a jury at trial.
  • Liability Assessment – An evaluation of liability needs to address all the parties in the case and not just the insured. Each of the plaintiff’s allegations should be discussed, and how the defense will be able to respond. Sometimes a defense would not serve to completely negate liability, but only serve as a way to reduce liability or damages. If this is the case it should be clearly stated so a proper assessment can be made.  An example of a concise statement on liability would be “I believe the insured has problems with liability as they were aware the driver sometimes drank at lunch to “calm his nerves.” While the 29 year old decedent was speeding, and may have ran a stop sign, it may only serve to mitigate a small apportionment of liability.” Another valuable tool is to list out all the defendants and show each of their percentages of fault.
  • Damages – This really should be the easiest section of the report to write up. A simple list of all the economic damages followed by ranges for potential non-economic recovery would clearly spell out the total extent of possible exposure. Additional information that could affect the outcome can also be clearly stated like this example: “Despite being unemployed, the decedent taught Sunday school and took care of his sick wife while raising his two small children on his own.” A great suggestion from a colleague is for counsel to base their report on the particular jury charge that would apply in the case. Verdict research is also helpful and readily available. In the end, counsel should come up with a damage assessment of the full value of the case and then factor in the liability apportionment.
  • Conclusions and Recommendations – Attorneys are being paid for their opinions and expertise, and they should be providing that experience in their reports. A clear statement should sum up counsel’s position on the case, and the relevant next steps.  Upcoming discovery expenses, as well as any out-of-the-ordinary expenses that may be incurred (i.e. investigators, experts, trial exhibits, etc.) should be listed to allow the claim handler to manage expense budgets better.

Good Reports Are Cost Effective and Allow Handlers to Make Informed Decisions

When reports include all of the potentially relevant and appropriate information, a claim handler can make a more informed decision. Reserves can be assessed and changed when needed, and expenses can be managed more effectively. I was able to see this in practice at another client I recently worked with. This client worked proactively and diligently with counsel to get them to follow the structure I outline above. The client’s Director of Claims told me that they “are paying for [counsel’s] evaluation, and wanted them to put their neck out.” He went on to say that they truly partner with their attorneys and acknowledge that they “win together and lose together.”  It was clear from reading these reports that counsel enjoyed writing them, and according to the client, also enjoyed the challenge of providing a complete evaluation.

A good report will tell the story of the entire case in a concise and comprehensive manner. Defense counsel and claims professionals need to work together to help resolve the claim using the most expeditious and appropriate approach. Good reporting will help the process. Sit down with counsel and come up with a format that works for everyone. Don’t be afraid to send a report back to counsel and ask them to state their position so a proper evaluation can be made.

What are your experiences with counsel reporting? How do you think the evaluation process can be improved?

Thinking Outside The Box: Litigation management program initiatives can substantially lower costs

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There is money to be saved by managing the litigation puzzle

Managing litigation is an easy way to save extra expense costs on claims files. A strong litigation management program designed to help foster improved communication, and streamline defense of insureds, benefits all parties involved. As I wrote about the cost savings benefits of out-of-the-box claims handling, using new and forward thinking strategies for litigation management is an excellent way to save money as well. This is even more important in complex litigation found in the areas of product liability, class actions and D&O claims where defense budgets can often trump the loss side of the claim.

A different perspective on how you can manage the larger litigation process

I was recently reading about cost reduction in the Sophisticated Litigation Support blog by Kevin Brooks, Managing Partner of Teris, a litigation support company. These types of companies provide eDiscovery and document management services that can significantly reduce expenses in litigation. Managing eDiscovery and other large document productions is a critical step to control defense budgets.

In his article, Is your outside counsel costing you time, money and case results?, Kevin explains why this vendor–provided service can be particularly beneficial:

You may believe that litigation support management is better left to your outside counsel. And in some situations, this may be true. However, in many cases your law firm could be costing you time and money, as well as affecting case outcome. Law firms are experts in the law, but very few have the resources and data expertise to manage your litigation life cycle properly.

If you take a more active approach by utilizing different types of vendors that compliment each other, you can considerably reduce spending while also having confidence that your operation is both efficient and effective. You as a claims person can proactively manage those services by leveraging specialized vendors instead, at a much lower net expense.

Kevin’s article continues with a list of ten important reasons for why your organization should hire a Litigation Support vendor directly. Four of the ten stand out as significant cost reduction opportunities:

Cost and Expense Forecast – Consult directly with data experts to more accurately identify costs for each project and keep expenses down. Vendors can also help cut future costs by proactively consulting on your data.

Budget Management – Identify points of savings by being able to initiate volume discounts. The service provider can extend volume discounts as they build long-term relationships directly with corporations. You can also avoid the markup from some law firms which could increase your costs for services from 25 percent to as much as 100 percent.

Streamlined Litigation Management – Reduce the number of vendors your corporation works with. This is especially relevant if your company works with several outside counsels and all have their own separate lit support vendors.

Resources – Access the most cutting-edge technology for handling data. Small and medium-sized law firms may not have an in-house IT department to manage large numbers of electronic documents.

I have been involved in a number of litigation projects that would have significantly benefited from support services provided by companies such as Teris, Xerox Litigation Support , Trial Solutions and others (as a side note, I have not worked with any of these vendors and cannot specifically endorse their services here). Litigation costs can get out of hand on large cases in a hurry so paying close attention to them is essential. The largest part of those costs can often be the handling and management of documents and eDiscovery, and not all attorney’s have the skill and technical capabilities to handle the types of services supported by these vendors.

In addition to those mentioned above and in Kevin’s article, there are many different kinds of vendors available to help lawyers streamline the litigation process. These include medical records retrieval companies, litigation graphics and video reenactments to name a few. Claims managers can and should suggest using additional resources to assist law firms which will also help lower litigation costs.

Evaluating your total litigation management process to streamline the procedures, understand the costs in advance, and ensure resources are effectively allocated, will allow for proper expense reserves to be set, and in the end reduce the amount of money spent.

A note on expense reserves

Expense reserves are often the forgotten stepchild of the reserve process. Many time claims handlers will adjust the expense reserve in the beginning of the claim and then increase it over time as expense bills come in. Good claim handlers will establish litigation budgets and evaluate expense reserves in a similar manner as a loss reserves. Regardless, ensuring expense reserves are accurate will help you manage costs across the board and enable you to truly understand the true expense exposure to your organization.