We talked about the myths on Episode 2:
P&C claims litigation takes place in the courtroom
Claims litigation is just attorneys
Nuclear verdicts are the cause of P&C's problems
P&C insurers are one idea away from fixing claims litigation
Legal invoice review is litigation management
This Episode will be the first of two parts. The first part will give you a glimpse into why plaintiffs’ attorneys are winning. The second part will examine whether insurance defense attorneys have made the same progress.
Intro:
The P&C insurance market recently started to evaluate opportunities to improve P&C claims litigation. For decades insurers relied on their attorneys – insurance defense attorneys – to manage this challenge. About a decade ago insurers began relying on third party bill review companies, too. These companies cut insurers’ lawyers' bills.
Today, the P&C industry is focused on short term profitability, and it hasn’t taken long to realize a lot of the money in insurance is going to … you guessed it, lawyers.
Those of us in P&C claims litigation – claims leaders, adjusters, attorneys - we know the litigation problem is not just a trend, and it is not something we can simply pass on to increased rates. As we saw in Florida, man-made risks challenge the core business model of insurance.
Those of us in P&C claims litigation know what’s really going on here.
Those of us in P&C claims litigation know the truth is that over the past decade the plaintiffs’ attorneys have gained all the power, and we’ve lost much of ours. The whole scales of justice are about to get automatically sorted into a subfolder in someone’s email inbox. And no, releveling the scales of justice is not billable (inside joke).
I’ll share my perspective on what the plaintiffs' attorneys did right over the past decade, and in the next episode, I'll reveal what the insurers and defense attorneys did in the meantime.
Truth #1: People:
Over the past decade, we've watched as many of the best insurance defense attorneys and best candidates have switched sides and joined the plaintiffs’ attorneys. Equally (if not more important), we've watched the legal staffs – paralegals, assistants, IT – join the plaintiffs’ attorneys. We’ve also watched the plaintiffs’ attorneys field many of the best expert witnesses.
We also recognize that the plaintiffs’ bar works together. The plaintiffs’ bar collaborates on how to win cases against insurers – mostly in settlement negotiations, but also in trial. Plaintiffs’ attorneys know how the claims adjusters and defense attorneys will increase their settlement evaluation over time, oftentimes better than they know themselves.
We’ve also witnessed the plaintiffs' bar establish strong alignment with their attorneys. Plaintiffs’ attorneys have grown into experienced, talented, and connected leaders. Plaintiffs’ law firms have created a clear vision for their attorneys – make as much money as possible. Through this clarity, plaintiffs’ law firms, plaintiffs’ attorneys and their clients have a very strong alignment, and this alignment makes every day a step in a clear career path.
Have insurers and insurance defense firms made the same progress? We’ll talk about that in the next episode.
Truth #2: Process:
The plaintiffs’ bar leverages attorneys for what they're best at – legal work. Plaintiffs’ attorneys attend legal events, coordinate with each other and experts using their voices rather than in writing, and devise legal strategies to achieve their goals.
Again, plaintiffs’ attorneys are measured on their settlements, so they focus on consistent improvement at the most important moment in every case – the settlement negotiations.
Plaintiffs’ attorneys don't need to even say the word 'process' because their focus is results. They hire professionals who build and maintain the process that supports the results.
Plaintiffs’ attorneys do not spend the vast majority of their time justifying their perspective of every case in long emails and word documents. Plaintiffs’ attorneys have no incentive to do work that doesn't impact the result, so they don't do it.
The plaintiffs’ attorneys’ process demands essentialism in pursuit of their success metric. The plaintiffs’ bar knows the genuine activities that add value to the case, and they do those things. For everything else, the plaintiffs’ bar relies on skilled nonlegal professionals to run the machine.
Truth #3: Technology:
The plaintiffs’ law firms use software to do work for them, not the other way around.
On technology, its more of what plaintiffs’ attorneys don't do versus what they actually do. Plaintiffs’ attorneys do not manage litigation using Microsoft Office – Outlook, Word, and Calendars. Plaintiffs’ attorneys do not spend most of their day on their laptops writing to each other. Plaintiffs’ attorneys pick up the phone or don’t do it. Again, with technology, it’s more about what plaintiffs’ attorneys are not doing, rather than what they are.
Conclusion:
So why are the plaintiffs’ attorneys winning?
People, process, technology. The plaintiffs’ bar creates clear career paths for their people, focuses on outcomes instead of process, and they don’t wake up every day in a race to open Microsoft Office.
We call what adjusters and insurance defense attorneys do ‘litigation management’. Plaintiffs’ attorneys don’t call what they do ‘resolution management’, but that’s what they actually do. As we will talk about in the next podcast, the name ‘litigation management’ fits. Adjusters and attorneys actually are managing litigation, rather than the outcome.
We call what insurance defense attorneys do ‘insurance defense’. But is this defense protecting the insured? Is it reducing the exposure? ‘Insurance defense’ doesn’t have a success metric, so how do we know?
The.point.is.this: while adjusters and insurance defense attorneys were ‘managing litigation’ and practicing ‘insurance defense’, the plainitffs’ attorneys built powerful people, process, and technology engines.
And the truth is the plaintiffs’ attorneys are only recently starting their fastest acceleration: heavily recruiting even more top attorneys, legal support staff, experts …
... and now – AI engineers and wall street finance leaders.
These truths are important, and the myths in the trade publications keep us guessing ot the point of giving up.
Why are the scales of justice so lopsided? Insurers and insurance defense attorneys don’t need to look far. Just look at the plaintiffs’ attorneys.
In the next episode, I'll share my perspective on whether insurance defense attorneys have made the same progress as the plaintiffs’ attorneys.
I invite YOU to join US in our mission. We'll continue to tell the truth about the P&C litigation problems, and we'll be making some important announcements about what you can do about it.
If you found this podcast valuable, please like and share it wherever you saw it, join the conversation on LinkedIn, and subscribe to my newsletter/podcast/blog at wesleytodd.substack.com to make sure you get notified when we discuss Part II: the defense attorneys.
Wesley Todd
CEO, CaseGlide
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