The Power of Data-Driven Insights in Shaping Tomorrow's Legal Services

Nov 20

By Dwayne Hermes

The risk industry constantly evolves, shaped by numerous factors, from technological advancements to regulatory changes. Among these factors, one aspect that has become a growing concern is the escalating cost of litigated claims. According to the 2023 CLM Litigation Management Study Report, which was carried out by Suite 200 Solutions, an astounding 76% of participants reported an increase in their average cost per litigated claim over the last three years. This figure is a 50% increase compared to the percentage reported in 2019.

This trend has brought forth an urgent need to redefine our traditional methods of delivering legal services and find innovative solutions to combat escalating costs without sacrificing the quality of services provided. The changing dynamics between clients and legal service providers and the subsequent quest for a solution have ignited important conversations within the industry.

The Problem

The balance of client expectations and law firms' operational realities within the claims resolution industry creates a unique challenge. On the one hand, clients seek quick, high-quality, and cost-effective legal services. On the other hand, law firms and those who work in them aim to increase profitability.

This dichotomy often leads to requests for rate increases from law firms, which are usually met with client resistance. These clients are tasked with managing their legal expenses judiciously, hence they are often reluctant to approve any increase in legal fees. This resistance triggers a deadlock or friction point in the process, leading to an important question: How can clients save money on legal services while allowing attorneys to maintain their profitability?

Author and ClaimDeck board member William Henderson — **William Henderson**

This challenge was clearly set out by Professor William Henderson, a ClaimDeck Board Member, in the article The Legal Profession’s ‘Last Mile Problem’.

The insurance defense firm referred to in the article as—

“In my travels as a researcher, I visited an innovative insurance defense firm that was specifically created to implement processes, technologies and staffing systems to drive down both legal costs and speed up cycle time (closing files in an average of 300 days rather than 500). The firm has been able to show that as the time and cost to litigate go down, the amount paid to plaintiffs in settlements and judgments is not going up. This is a big net saving for the insurance companies.”

—is Hermes Law, the law firm out of which ClaimDeck was conceived.

Graph of Hermes Law Indemnity, Legal Spend, and Case Life

The Solution

The crux of the answer lies in delivering legal services more efficiently. Efficiency in this context refers to identifying and focusing on the "things that matter" while simultaneously reducing or eliminating processes that don't contribute significant value. In other words, the key lies in performing the activities that are instrumental in resolving a case and disregarding or minimizing those that are not. The use of litigation management technology is essential for implementing this approach.

ClaimDeck, a state-of-the-art, process-driven litigation management system, embraces this concept fully. We will use it as an example of the technology needed. ClaimDeck organizes and standardizes the flow of information from counsel to the claims professional, with a compliance function to ensure the information is delivered on time. By relentlessly focusing on key elements of good claims handling, such as resolution strategy, tasks to implement the strategy, and budgeting, ClaimDeck helps legal firms increase their operational efficiency, and carriers decrease defense containment costs.

CLAIMDECK SIGNIFICANTLY INCREASES EFFICIENCY AND DATA CAPTURE

Graphic showing bottleneck of data in claims litigation — **Current process has a bottleneck problem**

Graphic showing how ClaimDeck reduces bottleneck in claims litigation — **ClaimDeck removes this bottleneck**

Litigation Management Technology: A Driving Force for Efficiency

Effective Litigation management Technology is not merely a tool but a comprehensive solution that drives the litigation management process while capturing data. It should be a shared platform that allows for collaborative and continuous process improvements at every stage.

By fostering a laser-focused approach on the resolution strategy and the tasks to execute it, along with the budget for completing those tasks, the litigation management platform should ensure a tighter grip on the process, leading to enhanced efficiency. Moreover, its ability to capture data provides valuable insights at a granular level, thereby equipping carriers and legal firms with the knowledge to better understand and manage their processes.

Litigation Management Technology: Redefining the Future of Claims Litigation

The right Litigation Management Technology is a catalyst for modernizing. As carriers and law firms use this platform, they understand the real impact of every action taken within the litigation process. This understanding is crucial to developing a culture of efficiency, leading to a transformation in how claims are handled, and legal services are delivered.

For instance, as law firms become more proficient in identifying and focusing on the "things that matter," they can streamline their back office processes, improve client and talent attraction and retention and improve profitability without increasing their rates.

On the other hand, clients can get more value for their money as they no longer have to pay for inefficient or unnecessary services. With ClaimDeck, they can understand and monitor the progress of their cases more effectively, enabling them to make more informed decisions. This increased focus on the “things that matter” reduces leakage, legal and indemnity expenses, and average case life.

The Importance of Technology and Process Improvement

One cannot discuss the success of Litigation Management Technology without acknowledging the role of technology and process improvement principles in driving efficiency. Identifying the "things that matter" is the first step, but the real challenge lies in executing these things efficiently.

ClaimDeck's approach to this challenge is market-leading. Using technology to automate processes and applying process improvement principles, ClaimDeck can significantly transform the litigation management process.

Reducing LAE graphic — **Capturing valuable insights into the causes of claims with the right technology is key to avoiding future losses.**

Shaping the Future of Legal Services

While the journey toward reducing the average cost per litigated claim might seem daunting, it is manageable. With innovative solutions like ClaimDeck, carriers and law firms can find common ground to meet their respective objectives.

By focusing on the "things that matter," legal service providers can deliver high-quality services faster and cheaper, and claims professionals can efficiently manage litigated claims. Solutions like ClaimDeck provide carriers and law firms with the tools they need to make this possible.

By embracing technology and data-driven insights, legal service providers can enhance efficiency, offering their clients faster, better, and cheaper services. As this becomes the norm, we move one step closer to solving the Last Mile Problem and creating a future where the risk industry is driven not by the sheer volume of work but by the quality and efficiency of services.