Tuesday, January 16, 2007

Insurance Insurance Insurance

I could write a book about how insurance affects law practice, but I'd rather write a book about something more interesting.

However, I do have a few observations about the interaction of insurance with law practice:

1. Try as they might to act as if they represent "real clients", insurance defense firms represent insurance companies. When you have a case that forces the defense firm to look out for a real client (ie. you may have a case that a jury will bring in a verdict above the policy limits), you can exert real pressure if you play it right. My advice here is the same as any negligence case, only more so. Prepare the case for trial from the git-go. Insurance companies live for plaintiff lawyers who bumble and stumble. The cumulative effect of our bumbling is that payday comes later, and spread across an industry, it really adds up. When you play hard and tough, they notice, and they pay you.

2. You can control your caseload and workload (to a degree), insurance defense firms cannot. The economics at an insurance defense firm dictates that all the associates and partners be working close to capacity at all times. They also have to take ALL the cases the carrier gives them. Plaintiff lawyers don't have to take ALL the cases. They should take enough GOOD cases to do a quality job, and not make the mistake of taking too many marginal cases. These cases always end up taking more work, engendering more disbursements, and bringing less return than good cases. However, the WORST thing about taking marginal cases is it prevents you from doing quality, timely work on your good cases. You thereby lose the biggest tactical edge over the defense firms. If you don't have enough quality negligence cases, spend your time marketing for quality cases. Do NOT waste your time with poor liability, soft tissue injury, low potential junk. Do NOT fall into the trap of thinking these will lead to bigger cases....they will lead to more junk, and you will be seen as that kind of lawyer. When those clients get good cases they will go to "big lawyers".

3. Out of State carriers sometimes overvalue cases and will over pay early. I have had this happen a few times, so if you get the police report and you have a carrier you have never seen before, it may be worthwhile to investigate the case, send them what you have, and try to settle it pre-suit. You need a co-operative client to do this, and you have to be sure there are no surprise medicals lurking, but it is worth considering.

4. For what its worth, I find that carriers tend to over value dog bite cases.

5. If a defendant is self insured, or there is "self insured retention" in play, it is in your interest as plaintiff to fully understand the defense situation. This will prevent you from wasting time on impossible negotiations.

6. If the carrier is acting stupid, don't get angry, just move the case and prepare for trial.

7. If you do not try cases yourself, develop good relations with trial counsel. This is an economic issue, and we should act like business people. This applies to the attorneys of record, and to trial counsel. More on this tomorrow.....

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