Litigation executives and the need to drive efficiencies

Claim executives perhaps know better than anyone how important it is to eliminate, minimize and control inefficiencies across their organization. In a low interest rate environment, and in the absence of higher premiums, the pressure being put upon them to control both outcome and unallocated expense is unrelenting.

One chief claims officer once defined claims inefficiency as any activity conducted by a claims professional that is not focused on determining coverage, evaluating liability, quantifying damages or negotiating file closure. Viewed from this narrower perspective, we can all immediately think of activities across the claims cycle that would be deemed inefficient and that should be improved.

This discussion will focus on inefficiency within the litigation management arena and will highlight how software can play a significant role in helping claims executives achieve both higher efficiency and more optimal outcomes.  

Start with the elephant in the room

Let’s start with the elephant in the room; namely, the inefficient way in which claims organizations and defense counsel communicate with one another. You might be wondering what we mean by that, so let’s break down the process.

The claims organization assigns defense counsel. They agree to a Case Plan, which has many steps to it. As the Case Plan is being worked through, defense counsel sends bits of information back to the claims organization in the form of updates, emails and reports. Bit by bit, this information begins to form a more complete picture and, as a result, reserves are changed, the Case Plan is updated, and the process continues.

So what is so inefficient about this process, you might be asking? Well, to start, let’s talk about what happens to the highly relevant bits of information defense counsel is sending to the claims organization.

The first thing a claims professional does is make sure that the information is put in the right place in their claims system. They may need to put a copy of defense counsel’s report in the right digital file, they may need to summarize the report in their notes, or they may need to make some reminders to themselves on what to do next (or all three!). We know from our own rich experience with claims organizations that this is a significant part of a claims professional’s role.

Why do claims professionals have to do this? Obviously, the key reason is that no claims organization wants to grant defense counsel access to their claims system. There are myriad of excellent reasons for this, but the resulting process is the definition of inefficiency because so much time has to be spent filing away the information in a separate system.

As they move this information to the right place, claims professionals are not (we emphasize not) determining coverage, evaluating liability, quantifying damages or negotiating file closure. They are simply moving data or re-keying information—not moving the file forward.

What does efficient litigation management software make possible?

Our solution to this inefficiency is to have defense counsel put all their bits of valuable information into a structured software platform, which then feeds the information securely into the claims system. We call this a “unified litigation platform” because both defense counsel and claims professionals have access to it.

This means every piece of information can be in the right place, either in the unified platform or the claims system, with no re-keying, no data-moving by the claims handler (and without requiring that defense counsel be given access to the claims system). In turn, claims professionals can be more strategic with their time.

Transparency and efficiency are related

While this data- and information-capture tool frees up claims handler time as we’ve described above, it makes many other efficiency gains possible too. Let’s look at some of those.

We mentioned above the importance of a litigation Case Plan. These plans of course are essentially a series of tasks: Perform written discovery, take the plaintiff’s deposition, solicit a demand, hire an expert, the list goes on. Every claims executive knows what these steps are.

Structured litigation software can outline these tasks with due dates. This helps to keep the Case Plan on track. The entire process is easy to see, easy to build alignment around, and easy to see what steps have been completed and which are overdue or coming up.

Every time a claims professional has to ask defense counsel for an update, there is inefficiency in the litigation management process. It is wasted time. A unified platform with transparent Case Plans and tasks eliminates the need to ask this question.

Similarly, transparency around what has been completed and what remains to be done means more precise budgeting. It also can mean a more effective focus on case cycle time. If I can identify files with the highest number of overdue tasks, I know where to focus to get things moving more quickly.

The Holy Grail: structured data

Almost all claim executives recognize immediately that the absence of structured data means an absence of reliable metrics, analytics and key performance indicators. Without structured data, it’s hard if not impossible to identify the best law firms, the best attorneys and the most difficult plaintiff counsel.

Unfortunately, a primary outcome of the inefficient way in which defense counsel shares information with claims organizations now (where claims handlers re-key information or simply file reports into the digital claims file) is unstructured data. The information essentially sits within the PDF or Word document report or email. That means that it can’t be reported or acted upon in any meaningful way.

And, while it is true that some claims system have data fields into which claims handlers could re-key information from defense counsel’s reports (last offer, last demand, exposure ranges, liability percentages, parties to the action, venue, the judge, etc.), most claims executives acknowledge pretty quickly that these fields are used haphazardly at best.

A unified litigation management software platform asks counsel to fill out these fields in lieu of burying the information in unstructured reports. In other words, counsel provides the same information they provide now, but they essentially structure the data through their use of the system.

The end result

The end result is that claim executives have structured data from most of the information that counsel provides and can now see important data points. Which defense counsel get the best outcomes? In what cycle times? At what cost? Take the most depositions? Make the most motions? Hire the most experts? Predict the ultimate exposure on the case the most accurately? Execute on Case Plans in the timeliest manner?

To us, this is the ultimate efficiency for claims executives—the ability to match the right attorneys to the right file, while avoiding the redundancies and waste associated with staff re-keying information or asking for updates on the file.

For executives facing pressure to reduce both unallocated and allocated litigation costs, this can be a powerful combination of efficiency and outcome improvement.

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