Amid rising litigation costs and traditional billing models straining relationships between insurance carriers and defense firms, CLM’s Litigation Management Task Force (LMTF) gathered in September at the Chief Claims Officer (CCO) Summit in Baltimore to tackle pertinent industry challenges and explore collaborative solutions to address them. The Task Force, which is divided into four subcommittees, explored topics such as the billable hour, the widening talent gap, and the importance of strong partnerships.
LMTF Session Goals
“Our goals were to provide any education we could on some of the industry pressure points to this very advanced room of industry leaders and discuss some of the ways those pressures could be alleviated in the micro or macro,” explains JD Keister, member and litigation practice area leader, McAngus, Goudelock & Courie, LLC. “I would like to think those goals were met based upon some of the discussions we had in the room, where [several] participants shared small things they were doing to address some of the internal pressures, or pressures on their outside firms.” He adds that both he and Bob Kopka, founding partner, The Kopka Law Group, have both had participants reach out to their respective firms after the presentation to discuss some of the potential solutions that may exist within their own companies.
Krista Glenn, executive vice president, and CCO, Westfield Specialty, notes that her goal was “to foster a collaborative conversation,” which she believes was successfully achieved. “The participants—regardless of prior involvement with the LMTF—showed genuine interest, which I hope will translate into broader and deeper engagement with this important initiative.”
Rethinking Billing Models
“[Glenn] generated a great deal of discussion when she led with her, ‘Would your plumber agree to these terms?’ [query] and then raised questions about how and why some carriers have seemed to take billing guidelines and practices to a level to where it is harming firms,” Keister says. “In addition, [Kopka’s] portion of the presentation about focusing on the right outcomes and metrics—and perhaps not the billable hour—generated a great deal of discussion, including two different carriers sharing outside-the-box billing arrangements they had put in place to alleviate some of the administrative burden that both carriers and firms feel in the traditional hourly method.”
Glenn recalls that a topic explored during the session was “whether CCOs knew their organization’s average time to pay defense counsel invoices. Some had that data readily available, while others did not, but I suspect those gaps have since been addressed. We also challenged the group to consider adopting simplified or model litigation guidelines. With time to reflect, I’m optimistic that we’ll see growing support for this approach.”
The Importance of Collaboration
“There is genuine interest in being stronger together,” notes Keister. “In terms of the work of the Task Force, we are seeing small, incremental improvements to traditional ways of thinking. Our industry (on both sides) is not always quick to change, but I think more and more realize the level of concern that many are feeling these days.” He adds that CCOs clearly recognize that sharing information is critical to addressing the industry’s challenges.
According to Glenn, “Our core message is simple: Get involved. We’re at a pivotal moment,” she emphasizes. “As carriers, we must support our defense firms, foster true partnerships, and invest in each other’s success. All of this is in service of our clients and insureds.”
CCO Summit Impressions and Takeaways
Keister believes that, based on the attendees present at the Summit, “the right people are in the right seats. Those are incredibly gifted and talented leaders who [understand] the challenges that carriers and TPAs are feeling—as well as what law firms are feeling.” All in all, Keister felt that he was among attendees who understood the industry’s pain points and are willing to collaborate to find opportunity to relieve them—"even if changes are small and incremental.”
Both Keister and Glenn were surprised by how many attendees were unaware of the significant financial burden placed on outside counsel, such as delayed payments, carrying and fronting large expenses, or increased audit and appeal processes. As a result, “raising awareness around this issue could be a catalyst for meaningful change,” notes Glenn.
“The dialogue throughout the presentation was active and thoughtful,” Glenn adds. “With [Keister] and [Kopka] as the only outside counsel present, the exchange was more holistic than topic-specific, reflecting a shared commitment to improving litigation management.”
As the Task Force continues its work, the panel agrees that building strong partnerships with transparent communication between carriers and defense firms will be crucial to the industry’s future.