View this article online: https://www.claimsjournal.com/news/national/2016/09/15/273530.htm
Communication, data collection and analysis are key drivers to a successful litigation management program, according to Vince Venturella, product manager with Wolters Kluwer Enterprise Legal Management (ELM) Solutions.
A 2015 study on panel management and performance conducted by ELM Solutions, found that litigation panel management is a poorly managed process with carriers enlisting more firms than are actually used. In addition, the study found that 92 percent of litigation executives don’t believe that higher rate structures and firm compensation translates to better results.
As carriers look to reduce leakage, the pressure is on senior management to reduce litigation expenses. The challenge, he said, is that there’s no uniform set of standards or guidelines, nor uniformity in how the data is utilized.
According to Venturella, ELM began the product design on its insurance-focused case management system, Insurance Claims Defense (ICD), a little over two years ago.
“Our focus is on the litigated claim,” explained Venturella. “Our goal is to help carriers manage the litigated portion in a claim.”
The idea is to manage the entire life cycle of a litigated case.
“We’re going to help…surface data and track relevant information about the life cycle and the experiences of the people who worked on the case, to deliver executive and operational management a series of reports and information that’s going to help them make smarter decisions about the way that they continue to pursue case work in the future,” Venturella said.
The system captures the firms a carrier works with, how quickly a case moves to settlement and the way costs are allocated.
The company offers two different methods of setup for the web based platform. A carrier can use its own server offering employee access or the firm offers a cloud based option that is hosted on ELM’s own secure servers, with access offered to carriers via a private cloud.
Each insurer can tweak the system to their individual needs.
“Every field, every name, everything that’s in there, every database value can be controlled and adjusted to the individual client’s need, workflows and processes,” explained Venturella.
The company also offers out of the box configurations that adhere to “industry standards.”
“We basically add on whatever customization that the individual client wants for their process. The way that they want to manage their panels, their matters, their opening and closing process, the approvals and workflows,” said Venturella.
The system contains nearly 12,000 law firms from around the globe and several of the firms already utilize a portal to submit bills electronically.
With more than 90 percent of carriers utilizing some form of panel management, it’s a necessity to compile and analyze their performance.
“If 90 percent of carriers are doing anything…That is industry standard. The trick is somewhere around 60 percent are actually measuring their panel’s performance or evaluating or evolving those panels in any way, explained Venturella. “What we see is a very large spread of adoption along this road of using data to enhance your litigation management program.”
Using an endless list of different law firms isn’t the way to go, he said.
“We’ve got to use some kind of management,” he said. “Over the past five to 10 years, everybody’s started making panels. The problem is that, then, where do you go from there? A lot of people have made that first step of creating the lists, but they’re not utilizing all of the good data that they are collecting…to then continue to evolve those panels, the firms that are on them, the attorneys that are used as part of the assignments and really looking at measurable metrics that you can use to improve your business, control your costs and improve your outcomes.”
Carriers may be hesitant to use metrics fearing it will damage the relationship in some way, when in fact it’s exactly the opposite, he said.
“The thing that damages relationships with law firms most often…for carriers, is when their expectations are not effectively and regularly communicated to law firms, and the law firms then make decisions or calls in the course of work that very much go against what the carrier would have wanted,” said Ventrella. “Something goes wrong and then the carrier is angry with the firm, and now they don’t want to pursue the relationship any more or give that particular firm as much work. When all of that could have been avoided by saying upfront and regularly reinforcing through the use of metrics and expectations and harvesting the data you collect – ‘This is our expectations. We are going to communicate your performance to you, and we want you to work with us not as simply a vendor, but as a partner in achieving the best outcomes in these cases.'”
The biggest issue between law firms and insurers is the issue of communication and lack thereof.
Venturella explained that communication isn’t a one time thing or solely confined to a case.
“It’s communication throughout the life cycle of the litigation, but it’s also communication outside of that,” he said. “From the client side, it can be changes in billing guidelines, expectation, metrics or internal program changes. The same thing on the side of the law firm. It can be communications about internal policy changes or staffing allotments, case capacity, all these sorts of things are critical for both sides to have at least some understanding of to conduct an efficient relationship.”
Law firms have indicated a desire to collaborate with insurers, said Venturella.
“What we’ve seen is actually the law firms wanting us to go farther…to allow more collaboration, more ease of access that’s within a simple flow to connect up to the client users,” he said.
That kind of collaboration, he said, includes an easy and quick exchange of case narratives so the carrier remains aware of any changes.
Another common issue besides communication that can arise between carriers and panel counsel is when counsel reviews a new case as if it a cookie cutter problem, Venturella said.
“The fact that the firm looks at a case that’s always a red car, blue car in the state of Ohio, that’s a pretty standard thing. Here’s what we’ll do, here’s our case plan. They judge the book by its cover,” explained Venturella. “I think what carriers definitely want to see is a little bit more…scrutiny, because although sometimes that’s going to be true, maybe even most of the time. The time when it’s not…and you pay a large penalty. For that oversight, it’s going to be significantly damaging to the relationship, to that particular case outcome, to bottom lines.”
Bad budget practices is another area where communication can make or break a carrier/panel counsel relationship, according to Venturella.
“There’s a couple of different ways this can manifest. First, if the budgets are set way too high and then never touched or gotten close to, because the firm doesn’t want to actually do the work to commit to a specific budget,” he said. “That is to say it doesn’t want to be on the line that they’re wrong so they way overset it knowing that they’ll come in short. If you’re consistently coming in well under budget and I mean well under budget, that’s not necessarily a good thing.”
Another problem that can arise with budgets is when a firm doesn’t communicate when there’s a big increase in the budget.
“All of the sudden, you’ll get some massive invoice that’s going to blow the budget up and you had no idea that that was coming, the firm not keeping the carrier appraised of large changes in the budget of the case because originally we didn’t think it was going to go to trial, now it is, and we’ve entered a different phase of litigation or whatever.”
On the billing side, the challenge for law firms is to make sure it is conducted in the best way possible, Venturella said, to avoid allegations of sprinkle billing or double billing.