When a workers’ compensation claim is placed into litigation, members of the claim management team need to refer the file to a defense attorney. This should be a thoughtful process, and avoid just sending it to the same old law firm. Instead, there should be a process to select the proper defense counsel to move the case forward to avoid excessive costs and protracted litigation.
How to Select the Right Attorney
Insurance carriers and third-party administrators typically have a set panel of law firms. While this limits where the file can be sent, it does allow the claim handler to use several different attorneys within a particular law firm.
- Shareholders/Partners: These tend to be the more veteran attorneys within a law firm who have been practicing for many years. They will better grasp the law and likely see different scenarios and fact patterns. A defense firm shareholder or partner will also charge a higher billing rate.
- Associates: An associate within a law firm is a younger and less experienced attorney. They typically do not receive a majority of the new file referrals and work under the direction of a shareholder or partner. They have lower billing rates, which are typically based on their experience.
Never discount referring a file to an associate within a defense firm. These are the attorneys of the future. A responsible associate will use a seasoned mentor within their law firm to develop their craft and provide a zealous defense.
Demand Value for The Work Performed
All members of the claim management team should demand value from the defense counsel. The file you are referring for defense is important to you. Ask yourself several questions when looking at an invoice for legal services:
- Did the attorney prepare the bill following file handling instructions and parameters? If your guidelines prohibit “block billing,” do not ignore it when it takes place. Demand the instructions be followed.
- Is the attorney providing a fair service for the work performed? This can include a review of services provided by an attorney that a legal assistant should perform. The use of associates or the number of associate attorneys used on a file, is also something to scrutinize on an invoice for legal services.
- Is the attorney taking steps to advance the file and drive it toward settlement? Excessive and unnecessary litigation always needs to be avoided.
Never rubber stamp a monthly invoice.
Set Expectations From the Onset
Most insurance carriers and third-party administrators have set parameters outlined within agreements with defense firms. These documents contain information on maximum billing rates, how file activities are to be billed, miscellaneous expenses associated with the defense of a claim, and other specific requirements. It is essential to consider how closely an attorney follows these parameters before referring it out for defense.
Other vital factors must be considered before sending the file to an attorney.
- File Acknowledgement: How an attorney responds to a new file referral is an easy way to understand their attitude and work ethic. Quick responses with personalized notes are a great way to spot a motivated attorney.
- Defense Budgeting: Require the defense attorney to develop a budget regarding anticipated (and unanticipated) expenses. Motivated attorneys will comply with this request even if not required. They will also keep a claim handler posted of additional expenses as they arise.
- Frequent and Consistent Status Reporting: Claim handlers should require a regular status reporting. These reports should be prepared quarterly or when a significant event occurs such as a deposition, independent medical examination, or pre-trial administrative conference. Reports should include new facts about the claim, legal analysis, and recommendations for further handling. Information from these reports can be placed in the claim file notes for proper documentation.
Look for opportunities to get to know an attorney. This can include inviting an attorney to speak on a topic at a claim team “lunch and learn” event or ask them for recommendations on avoiding litigation on a claim. These are easy ways to get to know someone and determine if they fit your philosophy and ethos.
One of the many challenges claim handlers face is selecting the proper defense counsel. There are several factors to consider. This process also creates opportunities to get to know different lawyers and understand their personalities through education and random questions. The goal should always be to find the right person for the file to drive a claim toward settlement and avoid protracted litigation.
Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.
Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.