Simplifying Claims Litigation
Time to Talk Analytics – Part 1
Actionable Claims Litigation Data
It would be difficult to find a claims manager or senior executive that didn’t believe the use of program metrics and analytics would help them run a tighter, more efficient ship. Almost everyone agrees on the criticality of metrics to help their organizations. Metrics help to quantify performance, spot outliers and exceptions, and to draw important insights about how different facets of a claims organization can be improved.
Yet, according to last year’s CLM Litigation Management Study, claims leaders ranked the “helpfulness” of their litigation metrics as a 55 on a scale of 100, a luke-warm score at best. One might conclude from this scoring that metrics are no doubt great to have, but right now, they’re not in a place where they’re making a significant impact.
Why is that? In our view, there are a number of reasons. A primary one may be that claims leaders only have access to a limited set of data points. Metrics come from data points and if the data points aren’t robust, the metrics by definition are limited.
In the litigation arena, for the vast majority of claims organizations, most metrics are derived from legal invoices. Most depend on the data supplied by their legal e-billing software. As a result, the metrics are very much invoice-driven. They speak uniquely to the efficiency of how cases are handled, but not to outcome.
Why is this a problem? It is a problem because it is outcome that drives the real cost for the insurance carrier. It is the improvement of outcome that is the real opportunity for the claims organization. Finding the “best” attorneys is not the same thing as finding the “most efficient” attorneys. True, these attorney attributes can overlap, but metrics that report solely on invoice data cannot identify the best attorneys, only the most efficient, and what claim executives really want are to identify the best attorneys to put on specific files.
Let’s look at some of the financial data that can be driven by invoice-centric metrics. Average cost per file, adherence to budget, and cycle times are the three primary metrics to come from an invoice. These are all important metrics.
But more important than those, at least in terms of where the real money is going, are a series of data points that answer questions like these:
• What was the case outcome?
• How much did the case resolve for?
• How accurate were counsel’s predictions of resolution amount?
• What was the attorney’s success with dispositive motions?
• How long did it take to get to settlement discussions?
• How timely was the attorney in terms of executing key milestones in the litigation strategy?
• How well did the attorney do against a specific plaintiff attorney? In a specific venue? With this type of case.
Only with data points like these can you derive metrics that speak to Average Total Case Costs, Expense to Indemnity Ratios, Process Compliance, and overall attorney and law firm performance. These are the metrics that help claims organizations match high-performing attorneys with the right cases again and again — resulting in overall litigation performance improvement.
Incidentally, the answers to these questions, along with case management efficiency issues, were the most-cited desired metrics in the CLM’s 2019 National Litigation Management Study.
So why is it so hard to combine all these data sets into a platform that can produce these desired metrics? We’ll explore that more in Part 2 of this series on Analytics, but we can give a quick preview:
1) Unstructured Data – think of how attorneys provide information to claims organizations today. Emails and reports in Word or PDF format are the most common tools being used. All of this data is unstructured. It can be laboriously transferred into claims system fields by the claims professional, but usually it just sits there, unused.
2) Disparate Systems – even if these data points are painfully extracted from the attorneys’ emails and attached reports, and re-keyed into various fields within a claims system, the claims systems can be old legacy environments that don’t speak well to other platforms (like e-billing systems). As a result it can difficult to pull the data back out and make good use of it.
At CaseGlide we’re clearly aware of the pain involved in capturing actionable data for claims litigation leaders. It’s one of the main reasons we created a unified platform that combines useable data across matter management, billing and invoicing and attorney performance.
We’ll speak more about that in Part 2 of this series. In the meantime, start thinking about these other data elements, particularly those that focus on case outcome. You’ll be glad you did!