Encouraging great outside counsel strategy

When it comes to creativity, lawyers are rarely compared to Mozart or Picasso, but the reality is they can come up with ingenious creative solutions to problems when inspired. I recently had the privilege of interviewing a well-known head of claims litigation at a leading insurance company about the company’s early case resolution strategy, which is designed to inspire just such creativity in outside counsel. He told me the story of a case in which a woman’s husband and children were killed in a horrible accident where the insured was drunk driving in a company vehicle. The woman sued the insurance company, and there was no dispute as to liability. The insurance company made a generous offer, but it didn’t matter; the woman was out for blood. She wanted her day in court. 

Or so she said. Defense counsel’s instinct may have been to point out logical reasons why going to court wasn’t necessary, but they didn’t do that. Instead, they listened. They listened because the insurance company’s early resolution program encouraged them to think creatively, to slow down and have a real conversation and listen not only to the woman’s words but also to their deeper meaning. When they listened to her this way, they realized that she didn’t really want “her day in court”—she just wanted a way for the world to hear the horrible story of what happened and be reminded of the dangers of drunk driving. So, they offered her a way: in addition to providing a fair financial settlement, they would partner with her husband’s employer to create a program in the name of her deceased husband and children to educate employees about the dangers of drunk driving. The woman accepted, and the pain and expense of trial was avoided. 

Most claims litigation folks are aware of early resolution as a strategy, but many of them have not yet succeeded in actually implementing such a strategy programmatically. The company I interviewed first implemented its strategy five years ago and has been continually improving it, so it represents one of the more mature approaches in the industry. It inspired the above solution and many, many other early settlements, both creative and conventional. And it substantially reduced both litigation costs and cycle times. Here’s a step-by-step breakdown of how it works:

  • Litigation counsel and claims examiners meet approximately 15 days after the litigation complaint is assigned to counsel to come up with a target date and strategy for case resolution. They document the tasks required to execute the strategy and the personnel—including any internal insurance personnel—who are going to do those tasks. For instance, what documents are needed and who’s going to get them? Does there need to be an investigation of the accident scene? Informal discovery and building a positive rapport with plaintiff’s counsel are encouraged. Sometimes a plaintiff’s counsel knows that this is the kind of case that should settle quickly and easily, but the plaintiff is upset and not ready to settle. In those instances, mediation or an informal settlement conference can help the injured party understand that, although they have every right to be upset, it is time to settle the case and move on.

  • Although the plan referred to above is called a “strategy,” there is a larger goal than planning the usual steps. It is also meant to start a conversation that gets the creative juices flowing. It is important that the parties enter the conversation with an open, problem-solving mindset.

  • After crafting the early case resolution strategy, the claims examiner sets another early case resolution conversation for the target settlement date.

  • Thirty days post-assignment, counsel must submit a case budget into the insurance company’s e-billing/matter management system. The budget is only for reasonably expected activities, not the entire life of the case. Often, it only needs to go through the next step, the second early case resolution conference.

  • If the case resolves as planned, the second early case resolution conversation doesn’t need to happen. However, if settlement doesn’t happen, the meeting occurs and centers around why the strategy didn’t work and developing a new strategy going forward. New tasks to execute that strategy are created, and new personnel assigned to those tasks.

  • Rinse and repeat until the case is resolved.

  • Every year, outside counsel needs to report to the head of claims litigation how early resolution has gone. They cover every active file, when the first early resolution conference was, the first deadline for resolution, whether it was met, etc. Importantly, the report needs to discuss at least three early case resolution home runs, cases where counsel demonstrated a high level of creative problem-solving. Inviting counsel to brag in this way reinforces the idea that the early resolution program is not a mere exercise, but something deeply important to the client. That leads to larger conversations about performance-- both how outside counsel can do better and how the insurer can help them in that task. Counsel understands that the best-performing firms will get more case volume over time, incenting them to put even more energy and creativity into early case resolution going forward. 

As mentioned, the company’s early case resolution strategy has generated not only substantial savings on outside counsel fees but also savings in the form of reduced cycle times that allow internal resources to concentrate effort elsewhere. While this program occurs in the context of claims litigation, I don’t see any reason why it wouldn’t be equally valuable in managing the litigation of corporate law departments. By taking a step back from the rush of high-volume litigation and pausing to think about cases at a deeper level, organizations can resolve more litigation more quickly and at a lower cost. 

Download our whitepaper Building Better Relationships with Your Law Firm Partners for more on further aspects of working collaboratively with outside counsel. 


About The Author

Nathan Cemenska

Nathan Cemenska, JD/MBA, is the Director of Legal Operations and Industry Insights at Wolters Kluwer's ELM Solutions. He previously worked in management consultancy helping GCs improve law department performance and has prior experience as a legal operations business analyst.

In past lives, Nathan owned and operated a small law firm and wrote two books about election law. He holds degrees from Northwestern University, Ohio State University, and Cleveland State University.