Transparency: Technology’s Next Gift to the Legal Department

March 30, 2015 by

Series Summary

Insurance executives should be asking a lot of questions right now. They should wonder why their outside law firms haven’t adopted available technology that could eliminate expenses for routine legal work. They should ask their law firms why, despite taking in millions of dollars in legal fees each year, they have not invested a penny in creating predictive analytics tools. They should also ask why they have to start off each and every case as if it was the first of its kind.

In Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve, I am going to share what I have learned while developing my insurance litigation management software. To build it, I had to study project management, document automation, knowledge management, predictive analytics, alternative fee arrangements, transparency, and more. While other industries are thriving using these systems, the insurance defense legal industry has lagged behind.

If all of the parties in this industry can come together and apply these solutions to insurance litigation, everyone will benefit. Find out why in Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve.

Q: What’s the difference between a good lawyer and a bad lawyer?
A: A bad lawyer makes your case drag on for years. A good lawyer makes it last even longer.

Q: What’s the difference between a jellyfish and a lawyer?
A: One’s a spineless, poisonous blob. The other is a form of sea life.

Q: How does an attorney sleep?
A: First he lies on one side, then he lies on the other.

Q: How many lawyers does it take to screw in a light bulb?
A: Three, One to climb the ladder. One to shake it. And one to sue the ladder company.

(Jokes credit: Icicle Software www.iciclesoftware.com)

These jokes are one way or reminding you that people do not trust attorneys. Why don’t people trust attorneys? The jokes make it clear: people believe that attorneys put their interests ahead of the clients’ interests.

Is this true? As with any profession, there are “bad apples” in the legal field; however, only a small fraction of attorneys are evil. The problem is that attorneys will never be able to overcome the stereotypes without being more transparent.

Imagine if you went to a restaurant and the waiter could not provide you the price, tell you what meal you were getting, or who would be preparing it. Making matters worse, imagine that the waiter tells you he won’t send you the bill until three months later. If there were other restaurants to go to where you did not have those problems, you would certainly think twice about ordering from that restaurant.

But what if all of the restaurants had the same policy? You have no choice but to go to these restaurants, question the integrity of everything about the restaurants, and assume the restaurant was cheating you one way or another. Whether true or not, if all restaurants did not follow these basic tenets of transparency – price, quality, result, and process – people would not trust the restaurant industry.

Do attorneys deserve the bad stereotypes? No, only a small fraction of them live up to that notoriety. However, until attorneys become more transparent, the stereotypes are here to stay.

In this article, I will discuss transparency can enhance trust and collaboration in claims litigation; but first, I want to share an example of how transparency can positively revolutionize an industry.

TripAdvisor is the perfect example of the benefits of transparency. Twenty years ago, you could gather some information on a restaurant; however, you never really knew what to expect until the food came out.

Fast forward to 2015. When you walk into a restaurant, you know that 1,133 people have given it a five star rating, 764 people have given it a four star rating, and seven people have had terrible experiences. You can also see on TripAdvisor that ten of your Facebook friends have enjoyed the restaurant.

Do you think this transparency has hurt restaurants? Only the bad ones. Restaurants are not forced to be on TripAdvisor; however, all of their competitors are on TripAdvisor. Their competitors are being transparent and showing people what they are missing. Therefore, all restaurants choose to compete with each other and give their customers the chance to tell their story for them.

This is the ultimate example of how transparency can benefit everyone. The customers know what to expect. The restaurants are rewarded on their merits. Customers no longer need to walk into each restaurant and investigate it. By being transparent on TripAdvisor, customers can trust that a restaurant that makes everyone happy can make them happy.

Attorneys do not have to go that far. They do not have to relinquish power to all of their clients to be more transparent.

They can start with the fundamentals:

How much will legal services cost?
What will be the outcome of the case?
Can you guarantee the cost and outcome at the outset of the case?

If you dismiss these questions as unrealistic, then you have not thought about this enough.

Every time a new case comes out, attorneys can also provide answers to these basic questions: (a) does the client need to do anything now?; (b) does the client need to do anything different in the future?; (c) if yes to either of the first two questions, what does the client need to do?

Clients do not want a storybook description of the case in long paragraphs. In fact, clients would prefer not knowing anything about the case. Clients do not want to hear all of the reasons why the case may or may not apply to their business. Clients want answers.

A legal publication service could provide the client with three instructions: (a) this new case applies to this specific situation; (b) if the client has that situation, the client needs to do something now; and (c) if the client may encounter this situation in the future, the client needs to do something in the future. Attorneys know all of these answers but they are not paid to provide them until it is too late. Attorneys can market this transparent product to increase revenue and, most importantly, increase transparency and trust.

So you think it is impossible for attorneys to tell clients the exact price and result of legal services? Fine. Attorneys can still be more transparent.

Collaborative software matter management systems offer solutions to most of the transparency problems inherent in claims litigation. These systems have several layers of transparency, including:

a. using customized workflows for routine matters so the client knows in advance what the attorney is going to do and when she is going to do it,
b. empowering the client with instant access to the attorney’s findings on a shared platform, rather than making the client wait until some “finished” lengthy Word document makes it to her email inbox,
c. developing as many automated legal documents as possible to achieve predictably low cost and high quality results, and
d. displaying user-friendly graphics and reports on progress and results in a customized client dashboard

If executed correctly, clients will gladly pay for these systems. If the law firm using the transparent system is efficiently and effectively producing results for the client, the client runs a big risk assigning cases to any other law firms. Like a restaurant in TripAdvisor, this innovative law firm can quickly move to the top of the client’s list by providing not only good results, but a transparent view of the good processes.

Attorneys have all of the knowledge necessary to deploy an arsenal of tools for their clients. In the insurance litigation industry, attorneys have an unparalleled opportunity to provide value-added enhancements to insurers’ claims processes.

Every time a Complaint hits an attorney’s desk, there is an opportunity to help the client modify a business process to improve future outcomes. For example, attorneys can provide an automated claims document library available online for their clients. Further, attorneys can use their unique insight to provide online workflows for navigating certain claims. The workflows could be technology-supported, or they could simply be editable flow charts available for each case. Additionally, attorneys could provide a calculator-like tool that uses prior case data to help their clients evaluate their possible exposure during the claims process.

By making their knowledge transparent to the client instead of tucked away in internal memoranda and email folders, attorneys can gain the trust of their clients. Client self-help products allow attorneys and clients to have a business relationship without the client having to wonder whether the services are in the best interest of the attorneys, or in the best interest of the clients.

Without change, people will continue to stereotype attorneys. At this point, it should not matter whether the criticism is fair or not. Attorneys should focus on how they can show their clients that they are a true business partner.

Law firms should learn from the restaurant industry that the key to separating their firm from the others is by being transparent about their services. Applying this new approach to the business of law, attorneys can use transparency to remove the shadow of doubt hanging over the attorney-client relationship. In 2015, technology gives attorneys the ultimate opportunity – use transparency to simultaneously improve their credibility and increase their revenues.

Question: What do you get when you cross a librarian with a lawyer?
Answer: All the information you need – but you can’t understand a word of it.

Unfortunately, transparency won’t help attorneys get rid of all of the lawyer jokes, but it will be a good start.

Read the first five articles in the series by Wesley Todd:

Litigation Project Management: Building Your Homeowners Insurance Litigation Skyscraper

Document Assembly and Automation: Making Easy Things Easy

Claiming What’s Yours: Why Homeowners Insurers Need Claims Litigation Analytics
When Knowledge is No Longer Power: Knowledge Management in Insurance Claims Litigation

7 Reasons to Stop Emailing About Claims Litigation Today