I hope this note finds you, your family and friends and your business safe and healthy. In these unprecedented times, as an effort to serve our clients in the best way possible, we have established a COVID-19 Response Team to assist with coverage issues and to provide legal guidance to some of the novel issues this pandemic has created.
In a time when so many things remain uncertain due to COVID-19, a focus on metrics and performance remain at the core of MGC. Before we were introduced to our “new normal” – one of working from home and “stay at home” orders, we launched our inaugural issue of The Bottom Line. Some of you may have received a hard copy of this newsletter; however, many will find this waiting for you when you return to the office. In the meantime, we felt it is important to share our findings with our clients.
We pride ourselves in being a firm that services the insurance industry and their insureds. In that regard, we have tried to develop a resource to provide information on insurance-related news, case and cost metrics, future practice management efficiencies and industry and legal trends.
As many of you are aware, in response to hearing the importance of litigation management, metrics and analytics from our clients, MGC invested heavily into capturing our own internal data. Sharing some of our trends we see in regards to data in our covered jurisdictions is a way to start the discussion between our clients and our firm. Capturing data and measuring performance is something that MGC has done for a number of years, but our real efforts fall on using those metrics to help shape behavior to align with the goals of our clients. We attempt to do this in several ways as a firm.
- Education. We strive to educate our attorneys and staff that quick and efficient resolution is the desired outcome.
- Transparency. Our lawyers are able to see his or her personal metrics through use of a dashboard that updates daily. An attorney’s dashboard includes where they stand on individual performance metrics such as cost per case, cycle time, billing compliance, guideline compliance and cases where there has been no recent activity.
- Incentivize. We don’t pay or bonus based on the number of hours billed. Instead, our bonus structure includes factors such as reducing cycle time, guideline compliance and showing improvement in other key firm and client metrics.
With over 200 lawyers representing carriers across eight states and 16 offices, we believe we can provide valuable insight into the current and future of our industry. We hope you enjoy this first edition and welcome your feedback.
With kind regards and appreciation,
Jay Courie | Managing Member | “A Firm that Gets It.”
At MGC, we embrace diversity and inclusion, recognizing that we are a better organization with people from different races, religions, backgrounds and walks of life. We believe that diversity breeds creativity and innovation because people with different backgrounds bring different perspectives, and thus different solutions, to the table. We bring these qualities to our relationships with clients and to the communities where we live and work.
MGC is committed to two initiatives dedicated to formalizing the firm’s efforts around diversity, inclusion and equality.
BELONG @ MGC
Our goal is to foster a firm culture where talented individuals from all backgrounds and experiences are recruited, empowered, included, respected and rewarded.
WIN @ MGC
The Women’s Initiative is MGC’s commitment to recruit, retain and advance women in the legal industry, as well as to provide a platform for engagement, development and leadership opportunities for women at MGC.
MGC has engaged in various initiatives, including building internal awareness of the firm’s diversity commitment, revamping the firm’s mentorship program, sending attorneys to diversity-themed conferences, encouraging attorneys and staff to engage in diversity organizations and events in local communities, sponsoring and supporting events in partnership with minority-focused community organizations, offering scholarships to minority students and planning cultural awareness and inclusion events for our attorneys and staff.
THE INSURANCE DEFENSE INCUBATOR
THE MGC COMMITMENT TO INNOVATION
Innovation is at the heart of what we do. We are never satisfied with the status quo. We don’t care how it has been done or how others do it. We understand the demands and pressures of our industry and take responsibility for maintaining a more efficient and cutting-edge business model. We embrace innovation as it is generally of mutual benefit for our firm and our clients.
In a formal effort to improve client service, MGC created and launched the Insurance Defense Incubator in the fall of 2017. The Insurance Defense Incubator challenges our team to develop ideas that would improve our processes, increase our efficiencies and lead to enhanced client service.
In February 2018, 18 attorneys presented their ideas in a “Shark Tank” style pitch to a team comprised of attorneys, practice management specialists and financial analysts. Proposals were scored based on creativity, practicality, disruptiveness, symbiosis and scale of importance. Project topics included harnessing firm’s data and artificial intelligence, predictive analytics, uniform file handling processes, machine learning, comprehensive knowledge management and pricing and tier-based legal services.
Of the 18 proposals, the evaluating team selected projects for the firm and placed its collective resources behind with the goal to develop a deliverable product and/or service over the next year.
The first project is an indemnity benefits calculator, which our attorneys utilize in order to more efficiently and effectively calculate indemnity exposure pursuant to the scheduled loss provisions of the South Carolina Workers’ Compensation Act. The indemnity benefits calculator is assigned to drastically reduce the time spent by attorneys performing mathematical calculations.
The second project is an evaluation of historical behavior of opposing counsel during mediation in order to predict behavior at future mediations. This project, founded upon the collection of certain data points of behaviors exhibited by opposing counsel during mediation, is designed to enable our attorneys to participate in the mediation process with an increased level of confidence regarding the likelihood of settlement given historical tendencies exhibited by claimant’s attorneys. The goal of this project is to increase the likelihood of settlement at mediation while simultaneously attempting to reduce the time spent at mediation and, subsequently, the legal spend associated with mediation.
Given the rapidly changing legal and business industries, we believe our willingness to adapt and innovate is more important than ever. In order for us to stay out front and provide our clients with the best service possible, we need to continue to assess our processes and technologies and find ways to improve efficiencies. There will be a second innovation challenge; this challenge will be open to legal support and administrative staff. We are excited to see what they bring to the table and to share the results with our clients as we move forward in the process of continuously improving how legal services are provided, together.
EMPLOYMENT TRENDS IN SOUTH CAROLINA
2018: COMPARING FEES AND INDEMNITY IN EPL VERSUS NON-EPL LITIGATION MATTERS
For employment law litigation matters, the average total fees billed per matter in EPL-insured matters was only 70% of what the average total fees billed in non-insured litigation matters. This was true even though our average cycle time on the non-insurance litigation matters was shorter than on the insurance litigation matters for 2018.
We believe the lower fees in EPL cases are due to guidelines requiring leveraging with associates to carry out the EPLI work, as well as the substantially reduced EPL rates compared to non-EPL rates, as well as greater willingness by insurance carriers compared to non-insured clients to resolve matters early kand before incurring substantial fees.
During the same year (2018), the average indemnity in the EPL litigation matters was 109% of the average indemnity in the non-EPL litigation matters. We believe the indemnity was higher in the EPL matters due to a greater willingness by carriers than non-insured clients to pay a little more in indemnity to avoid ongoing legal fees/costs and also due to the fact that non-insured clients tended to settle later (after some discovery was done) and likely used information learned in discovery to negotiate a lower settlement.
COMPARING FEES IN 2017 VS. 2018 IN BOTH EPL AND NON-INSURANCE EMPLOYMENT LAW LITIGATION MATTERS
Between 2015 and 2018, we saw a drop in average fees on EPLI litigation matters, which we attribute to insurance carriers aggressively pushing for early formal mediation and/or informal resolution. For example, the average fees in EPLI litigation matters in 2018 were only 61% of the average fees in EPLI litigation matters during 2017.
In contrast, in non-EPL matters, where the insureds frequently refused to discuss settlement until at least some discovery was completed, the average fees in non-EPL matters in 2018 held steady at 101% of the average fees in non-EPL matters in 2017.
Charleston attorney Amy Jenkins leads the firm’s employment law team.
This legal update is published as a service to our clients and friends. It is intended to provide general information and does not constitute legal advice regarding any specific situation. Past success does not indicate likelihood of success in any future legal representation.