The Insurance Company Has a File on You

Somewhere in an insurance company's database there is a file on your firm. It is sorted by tax ID number. It records whether you file suit, whether you take cases to verdict, and which lawyers in your office can actually try one.

I know because I have hired the defense lawyers who used to write those reports.

That file is why we file suit on the $20,000 case and the $2 million case, and litigate both. For most of my career the small ones lost money and we took them anyway, because it was right for the client and because no case in this office has ever been too big or too small to fight.

What changed is that the philosophy finally pencils out on every case, not just the big ones. I have been saying this to anyone who will listen for a couple of years now, and the numbers have caught up with me.

The defense lawyers told me what was in the file.

I wish more plaintiff lawyers understood that the carriers keep score.

One of the first things that went into those reports was a read on the firm across the table and the lawyer whose name was on the complaint.

Will this firm try the case, or fold?

The answer moved the number before anyone set foot in a courtroom.

So your reputation is working on every file you touch, whether you earned the good version or the bad one. If you are known as a firm that does not try cases, that goes with you into every negotiation you will ever have.

You are bargaining against your own track record before you say a word.

The settlement mills were never going to make it.

I do not believe the settlement mill was ever a real business. It can look like one from the outside.

Sign a lot of cases, work them up just enough, take the check, move on. Maybe it holds together for a while. It does not last.

The insurance company knows exactly who you are. If you are a firm that will not file suit, they know your client is going to take whatever they put on the table, because they know their lawyer is going to sit that client down and talk them into it.

So they never have to make you a real offer. Your own volume tells them everything they need. You cannot put pressure on a company that has already decided you are bluffing.

There is a second group that thinks filing the lawsuit is the answer. It is not.

There is a world of difference between filing a suit and preparing a case for trial. Filing and hoping the number climbs is not a strategy, and it works no better than the mill. The carriers can tell those two firms apart, and they will treat your client's case accordingly.

One lawyer owns the case from the first call to the verdict.

About ten years ago I made a decision that still defines the firm. We do not split the work into a pre-litigation department and a litigation department. Half the firms in this business do, and there are arguments for it. We do not agree. Every one of our attorneys owns a case from the first call to the verdict.

When one lawyer starts the case, develops the theory, and litigates it, nobody inherits somebody else's problems, and the client keeps the same lawyer from start to finish. This matters more than people outside this work realize, because at some point you have to have a hard conversation.

Sometimes it is: keep your foot on the gas and do not cave. Sometimes it is: you have real risk here and you ought to think about settling. It is difficult to have that conversation with a client who got handed to you last month and does not know you.

Trying cases this way means losing a few. We lose a couple a year that we valued higher, and once in a while we take a zero. I will put that in print, because any trial lawyer who tells you he or she wins them all is not trying enough of them. Add up ten years of verdicts and the losses barely register.

My partner Meredith Hinton has tried cases at my firm for more than twenty years. Her last one, the offer was $125,000. The verdict came back at $388,000, plus costs and interest. I will let that gap speak for itself.

The small case is not a loss leader anymore.

We took the small case because everyone injured by someone else's negligence deserves a lawyer who will fight for them. Treat a $20,000 client like the case matters and he sends you his brother, his neighbor, and half the guys at his shop.

The referrals made the math work eventually, but barely.

The work that made those cases expensive does not cost what it used to, whether it is summarizing a deposition, getting through a thousand pages of medical records, or taking the first cut at discovery responses. We used to farm the records out to a nurse and pay law clerks to summarize depositions and handle drafting. That expense is largely gone.

We use Eve for that work now, and I am not praising it to sell anything. I am praising it because it is the reason the loss leader stopped being a loss leader.

So the model we have run on principle for thirty years now runs on the numbers too. We prepare every case like it is going to trial, the small ones included, and the firm does not bleed to do it.

The mills are betting on a world that is closing.

The carriers already know who tries cases and who does not. Clients find out soon enough.

And the economics that used to punish us for taking the small, unglamorous case have finally turned the other way.

I have told my people for years that if you do it the right way, everything else follows. For a long time that was more conviction than proof.

I have the proof now. The carriers have a file on you either way. Give them something worth writing down.