Trial Lawyer Resource Center

When I sit down and review cases with my staff we have a lot of cases that are right on the edge of being resolved, but have one thing hanging. My friend Todd O’Malley calls that Ligitation Constipation, where the cases come in, but they don’t go out. That’s a real apt description. What is that one thing that is left undone? See if these sound familiar:

• Waiting on Records from a Doctor’s Office – They’ve sent 2–3 letters and called and called, but can’t get a response or records from that office.
• Waiting on Bills from an Office – The doctor’s office uses a third party billing service halfway across the country and they can’t get anyone to respond. (This one, I really don’t understand because the bills are on the computer and they can print and fax them to you, and it helps them get paid).
• Waiting on an Expert’s Report – an FCE, IME, vocational consultant or other experts report. Where the client has gone for an evaluation, but the report isn’t in yet.
• Waiting for a Specific Medical Report – We have the medical records in for that doctor, but when we’ve compared the medical records to the medical bills, there are a few dates of treatment missin.

So what do we do about it? Why does it seem like there are so many cases with just a loose thread hanging before we can put together the demand package? Is it the lawyer? Is it the staff? Or is it just a matter of timing? It turns out it’s none of those, it’s a law of physics.

If you have 4 events that each take about two weeks, you would expect the time to resolve those four events would be 8 weeks. You would think that any delays would average out. It turns out that the delays don’t even out, they accumulate. There’s a principle of mathematics that says when there are dependent events (things that have to be done in a sequential order) the variations (delays) are cumulative.

So what does that mean for lawyers? Last week I sat down with my staff and we played a little game. For those that want to play along, all you need is a big bag of peanut M & M’s, 2 bowls, and a number of cups. Here’s what I told them:

We have a magical law firm where we have as many cases as we want and there is an unlimited supply of cases where the people have finished medical treatment. This big bowl of peanut M & M’s is our supply of cases. Each M & M is a case. We can help as many people as we can get out the door.

I have a six sided dice here. Each person is going to roll the dice and they ‘move’ or produce as many cases as they roll. 5–6 is a good week. 1–2 is a bad week. 3–4 is an average week. Now we all know all of the possible reasons for having a non-productive week, some of them are within are control and some are not.

Our goal here is not to be judgmental about good reasons or bad reasons, or productive vs. non-productive time. That’s what the dice is for. A high number is a good week and a low number is a bad week.

Each roll of the dice is a ‘week’. We’ll run through 10 weeks, which is going through the whole team in sequence ten times. Halfway between one and six is 3.5 (I know your first thought is 3, but that’s halfway between 0–6). My expectation for my staff at the end of ten weeks is that we will have moved 35 cases.

Every turn, I want my staff member to roll the dice and then take that many ‘cases’ from the cup to the left. The first person in the chain has an unlimited supply of cases. Each person down the lline from there can only take as many cases as they roll, or as is actually in the cup. Okay, let’s go.

I then put my staff into the following four stations (you can use more or less):

• Get Medical Records – This means ordering and getting them in
• Get IME – This means anything needed for the IME, FCE, permanent impairment rating, statements of future medical treatment, and/or vocational assessments
• Get Future Medical Costs – Determine costs of the treatment recommended above.
• Write Demand Package – I put my lead paralegal on this task.

Then we went with the first station rolling the dice and whatever number she rolled, she picked from bottomless pit of cases to put together. Our office manager, Christie, was in this position and I think in 10 turns she averaged rolling a 5.3. Talk about a curve buster. At the end of ten ‘weeks’ Elaine had rolled a 38, which is right about where she should be. 35 is statistically smack dab in the middle of the road and a 38 is pretty close to that. Guess how many cases we moved? 31.

What Happened to the Other Seven Cases?

She was ready to produce 38 cases, but only 31 cases were done during that time period. What happened to the other 7 cases? It has to do with the relationship between dependent events and statistical variation, a subject I’ve talked about before. When there are sequential (dependent) events, any delays (statistical variation) will be an accumulation of delays rather than an average of delays.

So this means, if a staff member rolls a ‘2’ they only move 2 cases. If they roll a ‘5’ and there are only 2 cases in the cup to their left, they still only move 2 cases. Hmmm……

It was interesting to watch the M & M’s move down the line from station to station, their would be times they would bunch up in one station and another station would be totally empty. Watching the progression of ‘cases’, we could actually see how it mirrored putting a case together.

What happens if we add events to the 4 already there? Then the process slows down even more.

What is the Moral of the Story?

 The moral of the story is that it’s a natural phenomenon to have ‘one more thing’ that needs to be done on the case. It’s not a problem with the paralegal, it’s not a problem with the lawyer, it’s not a problem with the secretary or other staff. It’s a matter of physics. It also needs to be guarded against and fought at every turn. We need to watch the cases with just ‘one more thing’ and make certain we knock those out, so we can keep them moving.

I now have a sign above every staff members desk saying ‘Remember the Other 7 Cases’.

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My partner, Laura G. Zois, fellow Trial Lawyer Resource Center blogger John F. Romano, and other invited faculty, will be speaking in New Orleans on May 3-5, 2007 at the annual AAJ (formerly ALTA) Jazzfest seminar on auto torts. 

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Every day, I speak to insurance claims adjusters on the phone attempting to resolve personal injury cases.  It is dangerous to try to put people with complex goals and motives into simple boxes.  But let's do it anyway. 

There are three categories of insurance adjusters: (1) "It is not my money, I just want to get this file off my desk one way or another and keep my job"; (2) "It is not the insurance companies' money, it is my money.  Moreover, all claimants are liars and I'm dying to litigate these cases over the phone with you in an effort to repeatedly underscore my view of personal injury victims generally;" and (3) "I know my job is important, I am competent, and I evaluate cases fairly on a case-by-case basis.  I'm not paying more on a case than I think it is worth but I'm also not afraid to pay it what it is worth." Luckily, most adjusters fall into category one or three. 

The Category 2 adjusters are pretty difficult to have a meaningful conversation with because they are so dogmatic in their thinking that is generally limited to Colossus and its brethren.     But I think it is very important to fully hear out Category 1 and Category 3 adjusters.   An insurance adjuster is a human being (save your jokes) like everyone else and wants not only to articulate their position but also to feel like the lawyer on the other end of the conversation is listening to them.  The human psychology is to just shut them down because, subconsciously, attorneys think that the more the adjuster is able to articulate that hurts our case the more closed minded the adjuster will be.  But just the opposite is true.  Respect begets respect and you more likely to reach common ground with the perception that you fully considered all sides of the story in making your arguments.

A few more random thoughts on negotiating with insurance adjusters, in no particular order:

1.  The Adjuster Is Not Your High School Girlfriend:  If negotiations end badly, agreed to disagree and file suit.   Do not get mad at the claims adjuster. You can remind the adjuster that you have facts about the case (the quality of the client or whatever the facts may be) that reviewing the medical records could not possibly give the adjuster.  If this is the problem, it is obviously not the adjuster's fault that the medical records don't fully give a lens to the value of the case.  Discovery can resolve this and, if it does not, this is why we have juries.  Don't take it personally.

2.  Send a Copy of Your Discovery and Complaint with Your Demand Package:  The reality is that most personal injury lawyers have no interest in filing a lawsuit.  If you are different, remind the insurance adjuster of this fact by including a Complaint and detailed discovery.  For sample Complaints and discovery, visit the Personal Injury Lawyer Help Center for samples. (This will offend a few who think this is a declaration of hostilities. But I think most accept it for what it is, a message that you are ready to go if the case does not settle.)

3.  Filing Suit Is Not a Declaration of War:  This is particularly true in smaller cases.  Most adjusters do not fear a lawsuit, so do not act like it is magic elixir you have to take away the adjuster's power.  Acting like a lawsuit is a major event often underscores to the insurance adjuster that you are not an experienced lawyer because experienced lawyers file case on a routine basis.

4.  Save the "I'm a Lawyer" nonsense: This is the great way to alienate an adjuster.  It is also obnoxious. 

5.   Meet the Adjusters: This is hard to do in the real world.  But I have visited a number of insurance companies during "Settlement Days" where companies try to settle a large number of cases at one time.  My relationship with the adjusters I have met is always different than before we met.

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I'm at the WILG Convention and listening to a great presentation by Jeff Wehe. Jeff is an insurance adjuster with 12 years experience and currently independently evaluates cases. Here's some of Jeff's advice:

Insurance adjusters have to set their reserves early. Typically they have to have the reserves set at 75% of the final value within 30 days and at least 90% of the final value of the case within 90 days. The more information you can provide the adjuster, earlier in the process the easier you make it for the adjuster.

Why should you help the adjuster?
Because they're the ones with the money. Helping the insurance adjuster can make the difference between whether your case settles or not.

Provide Information as Early as Possible
I used to put together a great demand package. Complete with a detailed demand letter, incident report, detailed breakdown of the medical bills and all of the medical records. We would also include any supporting information that was needed, future costs workups, IME's, vocational reports, lost wages information, plus any witness statements that would be helpful. We pulled together all of the information that we would need to go to trial and presented it in one complete, tabbed, indexed demand package. Very thorough, very professional and totally the wrong way to go.

Right now, we're providing information to the adjusters as we go along. If there is going to be surgery or a lot of treatment, we let the adjuster know that up front. Before it happens. A short letter to the effect of "We anticipate that Joe will require a hip replacement surgery. We will update you as soon as Joe has the treatment and we receive the records".

We also update the adjuster as we get the information in. For example "Here are the medical records for Joe. With his injuries, we anticipate that he will have a significant impairment rating, extensive future medical costs and a serious vocational impairment. It is my guess that he will have an whole person impairment rating of at least fifteen percent, future medical costs of at least $200,000 and loss of earning capacity of at least $175,000. We will forward these reports as we receive them".

Why Update The Adjuster So Much?
The adjuster has to set her reserves based on what she thinks the case is worth. The reserves are often set within the first 30 days before much is known about the case. If you have a $150,000 case that is legitimately a $150,000 case and it's well documented, but the adjuster has her reserves set at $50,000, it makes it hard for the adjuster to settle the case.

Do you know what the number one criteria is for insurance adjusters for their performance reviews? The number one criteria is how well their settlements match their reserves. So what can you do to help? Give information to the adjuster. Give them as much information as possible to evaluate the claim as early as possible. Each step of the way, each touch allows them to re-evaluate the claim and determine how much your client's claim is worth.

How do you think it looks to the adjuster's boss if she's been telling him for a year to a year and a half that the case was worth $50,000 and then upon review of your super-duper tabbed, indexed, documented demand package she realizes that it's a $150,000 case. What is her boss going to say "If it's worth $150,000, how come you've been telling me for a year and a half that it's worth $50,000? Don't you know your cases? Don't you know your job?"

Help the adjuster by letting them see the true value of the case early on. You're going to be sending the information to them anyways. Get it to them early.

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