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A Message from the Executive Committee

September 1, 2015

By Christopher E. Dougherty, Esquire - Chairman of the Board

Bruce Jenner is now Caitlyn. The Confederate Flag has been removed from the South Carolina capitol building. The United States and other world powers reached a nuclear arms agreement with Iran. These events typify the rapid—and significant—changes we are living through.

For society to remain orderly, our law necessarily must keep pace. Take 4th Amendment unreasonable search and seizure law as an example. Observations into long-recognized zones of privacy have been made readily observable by satellite/thermal imagery and other technologies. Our Supreme Court recently acknowledged that our Constitution guarantees a right to same-sex marriages. Employment discrimination laws expand at a breath-taking rate—i.e., our Supreme Court recently decided that an employer must accommodate a prospective employee’s religious obligations, even when that obligation is not revealed.

As the law strives to stay abreast of societal change, law firms necessarily must recognize that how they deliver legal services must evolve as well. Some legal scholars direfully predict that if law firms don’t change, they will become obsolete.

Three drivers are cited for these predictions:

  1. Clients—large and small alike—desire more legal services for less;
  2. Internationally (not necessarily the U.S. yet), the increasing liberalization of law and regulation is expanding who may deliver legal services and from what type of business platform; and
  3. Information technology is growing at an unprecedented pace.

 

We are already experiencing the more-for-less challenge. Corporations, insurance companies, private businesses and individuals alike must do more with less. Thus, it is not inconsistent that they demand the same from the law firms they retain. General counsel and claims litigation managers feel strong pressure to reduce legal spend. Therefore, they seek more alternative fee arrangements, fixed/capped costs and creative billing arrangements from their law firms.

In England, laws were passed in 2004 and 2007 that effectively now permit non-lawyers to manage and take ownership interests in law firms. Investors may infuse law firms with private capital, and, as a result, they are increasingly being run in a more business-like fashion than ever before. Reducing inefficiencies, eliminating redundancies and finding less expensive ways to deliver legal services (i.e., outsourcing to low-cost areas) are identified methods to meet the more-for-less challenge.

The expansion and growth of technology proceeds at an ever-increasing pace. Technology now enables: automated document assembly and review; an electronic marketplace so consumers can shop more readily for legal services; more effective workflow and project management; cheaper and more intelligent legal research; closed legal communities to enhance problem-solving without law firm input; free online legal guidance; online dispute resolution; and “Big Data” for more effective measurement of law firm performance.

CLM published a national litigation management study in March 2015. Among the many observations contained in the general report, I highlight the following:

  1. Pre-approved outside law firm panels continue to consolidate and shrink.
  2. 84% of executives believe the legal environment is more competitive than five years ago.
  3. More executives formally measure law firm performance with metrics and quantitative data.
  4. Opportunities exist for law firms to describe their value more effectively, i.e., law firms should present their own metrics.
  5. 90% of insurance executives identified measuring law firm performance as their most important initiative over the next 12 months.

 

We are very attentive to the changes occurring in our defense industry. We have seen some fairly dramatic moves recently with Allianz/Fireman’s Fund, XL/Catlin and ACE/Chubb, to name a few. While we have survived insurance panel reductions thus far—and we are grateful for the confidence our insurer partners have reposed in us—we are more committed than ever to improve as a law firm.

How is Marshall Dennehey responding to the industry trends?

First, we emphasize to every person in our law firm that we are a civil defense litigation firm. We believe that it is important for every employee—professional and administrative alike—to appreciate that commitment. It should influence how everyone approaches every task on any given day.

Flowing naturally from our self-identity, we stress to our attorneys that they must be committed to following insurer litigation guidelines closely. Our dedicated and talented internal auditors grade our attorneys on how well they follow insurer guidelines. That compliance is a critical performance area measured by management for year-end purposes.

We will not only maintain our internal training program, we will improve it. A high level of training will yield high-quality legal services, and it will give our clients cost savings in the process.

Our director of professional development and training, Larry Schempp, is an attorney. Larry was a full-time faculty member at the University of Pennsylvania prior to joining Marshall Dennehey, and he is an adjunct professor at the Temple University School of Law. Under Larry’s direction, all associates receive initial orientation training. That training continues for new associates over the next two years—18 seminars that provide substantive and practical skills.

As our attorneys mature professionally, we provide advanced training and trial skill development courses. Last year, we conducted over 90 discrete training sessions for our attorneys. These programs keep our attorneys abreast of technology and current legal issues, and they sharpen litigation skills so our attorneys problem-solve more efficiently for our clients.

We are acutely mindful that more and more insurers stress early resolution of cases. Our insurer partners want cases promptly investigated, discovered, and sized up quickly so they can be properly reserved and resolved through mediation, settlement or otherwise.

To that end, we committed to assemble a group of seasoned attorneys who will identify and chart early resolution “best practices.” We will be expanding our training curriculum to include programs to advance the early resolution objectives of our business partners.

Twenty years ago, we had perhaps a handful of paralegals. Currently, we employ approximately 100 paralegals. They are managed under the direction of an attorney, Linda Barron. We are very proud of this dedicated group. Tom Brophy, our president and CEO, began his career here as a paralegal, so no greater commitment exists for the continuing enhancement of our paralegal program.

Linda crisscrosses our firm throughout the year, presenting seminars to our paralegals so they can provide best practice litigation support to our clients. We enhance their sophistication with computer software search and find technology. We expose them to trial technology to better support our attorneys in the courtroom. All of our efforts are geared to furnishing quality legal services at a value cost.

Fully appreciating that technology is a key driver in our ability to manage “legal spend,” our director of information technology, Roger Bonine, is developing several initiatives which should yield further value for our clients. By the fourth quarter of this year, Roger expects that he will have improved our existing central matter diary system so that every clients’ individual guidelines will be entered into a database. Relevant requirements and deadlines for each client will be automatically applied to new matters as they are opened. The system will provide our attorneys with state-of-the-art ability to follow an insurer’s guidelines. It will also afford management an ability to monitor and enforce that compliance.

We are implementing a new billing system, which should roll out in early 2016. This system will improve our compliance with our clients’ guidelines, and we are optimistic that the system will reduce the time and effort expended by everyone involved in the invoice review process.

We are installing hardware at each regional office to provide a secondary route to our Philadelphia data center. This will ensure that attorneys can continue to access documents and e-mail in the event their office’s primary data connection is interrupted. Also, we are updating our firm’s document management system to give us an enhanced level of data security for HIPAA files and other sensitive documents. Later this year, we will review our IT infrastructure and software with a view toward improving resiliency and availability of our key systems in the event of a disaster or long duration power outage. All of these IT commitments will yield efficiencies, security and operability for the benefit of our clients.

CLM’s March 2015 study also identified the most important metrics when measuring litigation management success: average cost per case, average case cycle time and the ratio of cost to indemnity. If these areas of performance are important to our business partners, they are important to us. We have the ability to measure these metrics. We intend to include these metrics in the evaluations of our professionals and to determine how these metrics can be meaningfully shared with our clients.

Times will continue to evolve, and change will be our constant companion. But there are some things at Marshall Dennehey that will never change. We remain committed to being a civil defense litigation firm. We commit to be fully synchronous with our clients’ goals and objectives. We commit to be attentive to the needs of our insurer partners. We commit to add more value to our relationships with them, and we invite constructive criticism when we do not. We commit to being the best defense law firm in every line of business and geographical location where we are positioned. We will strive to live up to our commitments and exceed client expectations, one matter at a time and each and every day.

*Chris works in our Philadelphia, Pennsylvania office. He can be reached at 215.575.2733 or cedougherty@mdwcg.com.

Defense Digest, Vol. 21, No. 3, September 2015

Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2015 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Affiliated Attorney

Christopher E. Dougherty
Chairman of the Board of Directors; Director, Professional Liability Department
(215) 575-2733
cedougherty@mdwcg.com

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