Managing the Attorney Landscape
Companies with multi-state or national operations face unique challenges in selecting workers’ comp attorneys to represent them in legal environments that can vary greatly from state to state, and sometimes even within a state.
Often, insurers or TPAs will provide panels of workers’ comp attorneys in each state. Under some policies, the choice of attorney is up to the insurer. But for those choosing their own attorneys, finding the right workers’ comp law firms and managing those relationships can be a challenge.
Some choose to bundle workers’ comp with other legal representation, but just because a firm excels in another area, doesn’t mean they will in workers’ comp.
“Workers’ comp attorneys aren’t allowed to say they are specialists, yet they are expected to be,” said Mike Fish, partner at Fish Nelson & Holden and president of the National Workers’ Compensation Defense Network, a national network of workers’ compensation defense firms.
Others rely solely on personal referrals.
“I get those calls all the time. Current clients will ask who I know and trust in another state.” said Fish.
“That’s one of the benefits of NWCDN. We have contacts in each state. I know each of them and see them once or twice a year. They are heavily vetted, there is one per state, and they have to be voted in by the other members.”
“You are going to ask peers, people you respect, people you know in the business, people you know in the community,” said Debra Levy, SVP, product management and national workers’ comp practice leader for York Risk Services Group.
“You’re going to start there and there’s certainly nothing wrong with that.”
But referrals should only be a starting point.
“You’ve got to interview firms,” said Levy, to make sure your legal philosophies are aligned, and to ask about their operations and priorities, and specifics like using associates instead of partners on depositions. “… There are all those things that usually don’t come up until there’s a problem, and then folks are like …’Why didn’t we know that about this?’ ”
Fish recommends other research, as well.
“How involved they are with national or state-wide organizations. Are they prolific speakers? Do they communicate new case law through blogs or newsletters, so you can see they’re on top of things? Are they well respected in the state? Are they on committees?”
“Workers’ comp attorneys aren’t allowed to say they are specialists, yet they are expected to be.” — Mike Fish, partner, Fish Nelson & Holden; president, National Workers’ Compensation Defense Network
Levy suggests looking at a firm’s impact on case law.
“The power of a firm is being able to not just settle a claim but successfully set new case law that benefits or is of use to the folks that come along later,” she said.
Data and analytics are an increasingly important tool in selecting workers’ comp law firms. But not everyone is convinced of their utility.
“In order for [metrics] to be useful you’ve got to make sure you’ve got apples to apples analytics,” said Levy.
“Otherwise it’s like anything — I can spin any number I want to make it say what I want to say.”
“Some say analytics don’t tell you the quality of the work,” said Fish.
“They tell you the cost and the speed, but not the quality. And there’s no way to quantify that, so there’s no way to tell.”
Others are more upbeat about the power of analytics.
“We have a number of analytical tools that help us capture data to measure various aspects of a law firm’s performance,” said Bruno Para, assistant vice president and manager of legal strategic services for central territory at Liberty Mutual.
“Liberty Mutual has always been very analytical, and we are constantly improving our metrics, constantly improving our data, constantly looking at other ways to pull more information and insight out of our data to help us manage outside counsel performance.”
Liberty Mutual, and its Helmsman Management Services wholly-owned third party administrator, provides clients with analyses of the data, according to their preferences, through reports, discussions and a customer dashboard.
“A carrier or TPA should be helping a policyholder or customer with assessing the data, analyzing it, figuring out what is trending and how they can get the best results, but do it efficiently and cost effectively,” said Don Liskov, assistant vice president and senior corporate counsel at Liberty Mutual, and, along with Para, a member of the company’s legal strategic services group.
But data can only help so much.
“There are a number of performance factors beyond our data … that we include in a law firm’s profile,” said Para.
“What is the firm’s reputation in the legal community? Do they have a particular litigation philosophy? How do they manage motions? Do they try the right cases?”
Other factors include staffing ratios, technology, and their usage and understanding of data and metrics in assessing performance against quality and financial goals.
“You can glean some of that through data and metrics, but a lot of that is subjective. It is sitting down with the firm,” said Liskov, so that the client, the attorneys and the carrier, if there is one, all know each other’s litigation philosophies. “… Making sure all of these align with each other is very important.”
Working with national firms can also seem easier, said Levy, with standardized billing and fewer relationships to manage. But she cautions that you still have to do your diligence.
“A firm can be great in this state, in this town and then you move clear across country to another and it’s a completely different approach,” she said.
“Do they maintain and keep that same energy and direction whether you’re in Idaho or in Miami, Florida?”
Starting out with a good fit may be the most important factor to a successful long-term relationship, but such relationships must be maintained.
“Data and analytics are essential to tracking how firms are performing,” said Para. They allow Liberty Mutual to visualize performance trends against other firms and against themselves, period over period.
“We also sit down with firms to share our key performance indicators. We build transparent relationships so law firms understand how they can use the data we share to make changes within their operations that will positively impact their performance trends in the future.”
Some, like Levy, think competition can keep law firms from growing complacent.
“I’m a big believer in keeping a few firms on hand,” said Levy.
“I think competition is the best way to get the best out of a law firm.”
Liberty Mutual prefers a more collaborative approach.
“Through increased engagement and transparency we are enhancing our relationships to drive legal performance and cost efficiencies ,” said Para.
“We frequently share knowledge with all of our law firms, so that they understand where they are in relation to our performance expectations and our internal standards. This type of benchmarking also incentivizes them to consider how they compare to one another and drives healthy competition.”
“We have a number of analytical tools that help us capture data to measure various aspects of the law firm’s performance.” — Bruno Para, AVP, manager, legal strategic services for central territory, Liberty Mutual
One thing everyone agrees on, however, is that communication is essential.
“It starts with frequent, transparent communication in terms of whether or not the guidelines, the expectations, and the goals of the relationship are being met,” said Para.
And if a once-good fit seems to have become less so, it is important to understand why and communicate that. Are the problems operational or systemic? Do they stem from changes to the law firm, or the client’s business?
The important thing is to communicate such changes.
“Once you identify the why, then you can address what to do about it,” said Para.
Disconnects can also arise from strategic or philosophical changes on the client side.
“On any given day, company X might be more hard-nosed, or easygoing. If word gets out that they settle everything, they might see an increase in claims. So they say they can’t settle, and they litigate every claim, then they get dinged for $1 million, so they back off that hard-nosed position.”
Inevitably, sometimes, a client may need to make a change, but Levy advises a measured approach. “When clients see a change going on or see or feel something that’s not right, a lot of times they’re very quick to abandon this relationship,” said Levy.
“…We do try to encourage that you take a step back to examine: Is it one attorney at issue, is it the philosophy of the firm that’s changed? … Don’t just run away. Take some time to really make sure that’s what you want to do. And if you’ve had good results and there’s a way back to those results that match and meet your expectations, then hold on to it.” &