Message From The Executive Committee
“Innovation distinguishes between a leader and a follower.”
- Steve Jobs
Earlier this year, Marshall Dennehey was honored to be asked by one of the nation’s largest insurers to speak with all its panel counsel about legal innovation at the Claims and Litigation Management (CLM) annual conference in Orlando.
As the firm’s CEO, there is nothing like having a valued client hold you up as an example to their other outside counsel. We work hard to align ourselves with the business strategy of our clients, and opportunities like this are both humbling and gratifying. They are humbling because of the caliber and number of law firms with whom we were able to share and gratifying to have our methods and capital investments appreciated. Our thanks go to this particular insurer for putting together an inventive and empowering panel counsel meeting.
It is no surprise that many law firms today view technology and legal innovation as existential threats. Visions of robot lawyers and artificial intelligence seem to have spread overnight from science fiction to mainstream legal chatter, and we have all been warned these and other “disrupters” are things to be feared.
Rather than getting flustered, Marshall Dennehey is bringing innovation to the practice of defense litigation. It is not because we are more daring than other law firms. Much of what we do and have done is just good business. Without innovation it is hard to compete, much less thrive, in the modern legal eco-system. So we have taken a pragmatic approach, secure in the knowledge we have already adapted and overcome all manner of disruption during 57 years in existence, including changes in the law, changes in the industry and transformative changes in technology. We understand fully that what worked yesterday may not be sufficient for tomorrow.
One of the more important lessons we have learned is that legal innovation starts with process, not technology. Opportunities exist in every firm to deliver legal services more effectively and efficiently. By rethinking the process, we can improve litigation outcomes, client satisfaction and revenue streams.
Take compensation for example.
Marshall Dennehey does not compensate its lawyers based on origination. A recent ALM Intelligence survey found that 83% of law firms still do. This is a dicey proposition in which the attorney who first touched the client receives credit, often in perpetuity, for all subsequent assignments. That credit might then be shared with the attorney who grows the account or the attorney who performs most of the client’s legal work. Those credits get tracked and the more “originations” a lawyer has, the more they get paid.
These schemes encourage hoarding. They create incentives and shape behaviors that are counter to most clients’ interest. Lawyers end up disregarding venue, subject matter expertise or experience – all in an effort to retain a file and preserve origination credit.
At Marshall Dennehey, we’d rather focus on client-oriented performance. Spurning origination credit allows us to easily assign the right matter to the right lawyer in the right location. Our lawyers are also able to specialize in distinct areas of law such as health care, employment, securities, products liability, school leaders, coverage or risk transfer. By contrast, where compensation is based on origination, lawyers tend to juggle multiple disciplines in an effort to keep matters under their own name.
Our pioneering approach puts our clients’ interest first. It also fosters sharing, team work and trust among our lawyers, strengthening the firm.
But we don’t stop there. We audit ourselves for quality assurance. Within our firm is a staff of seven internal auditors whose job it is to review the files of every shareholder and associate on an annual basis. These senior lawyers look at many of the same things our clients do. They evaluate and report on file handling, guideline compliance and work product. They examine the quality and frequency of reporting and whether the files exhibit efforts to align with case strategy, such as early resolution. The results of these audits are then factored into attorney compensation. This innovative practice not only incentivizes lawyers to meet client expectations, it results in our clients routinely commending us for consistent file handling across 20 offices in six different states. Consistently good lawyering is a hallmark of Marshall Dennehey. It builds loyalty and assures that no matter where our clients retain our services, they always know what they are going to get.
Our goal of process improvement extends to our Roundtable Program. Perhaps nowhere is rethinking an approach more important than with complex and high-exposure litigation. At no additional costs to clients, we “roundtable” these type of cases, subjecting them to multiple viewpoints from some of the best lawyers in the firm. This testing and refinement of strategy benefits our clients, as well as the handling attorney, and can lead to better outcomes.
Other examples of innovative process include our internal training and professional development of attorneys. Here we teach client-specific litigation management, accurate budgeting, early case resolution, effective mediation techniques and trial advocacy. We have also implemented a remote work policy for eligible attorneys, affording greater flexibility and improved efficiency in how they practice. And when it comes to accounts receivable and client exceptions, we have aligned our back and front office operations. Attorneys now collaborate regularly with billing specialists from our Revenue Capture team to more quickly resolve impediments to payment.
All this process illustrates how legal innovation starts, but there is no question that efficiency-enhancing technology is also essential to the modern practice of law. Clients expect law firms to leverage technology and 34 states have now adopted ABA Model Rule 1.1, Comment 8 which provides in pertinent part:
To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology… .
Together with innovation, automation is one of the key factors driving change in the legal industry today. Law firms intent on growing, staying relevant and remaining competitive have no choice but to embrace, invest in and promote their legal technology. Defense litigation firms in particular would be wise to heed the 2019 CLM Litigation Management Study – which is a survey of more than 80 claim and litigation executives. Their Report of Findings suggests law firms should cease presenting requests for rate increases as merely a reflection of higher costs and instead show what they are doing to mitigate costs and optimize their practice.
Marshall Dennehey is proud to answer that call. In addition to the innovative processes described above, we have made significant investments in legal technology. These resources enable us to continuously improve our practice, manage costs and better serve our clients.
As an example, our practice dashboards deliver real-time metrics and data for on-demand reporting of fees, cycle times, total indemnities paid and case dispositions on over 40,000 files annually. These analytics distinguish us from other firms and keep us ahead of the curve. They enable us to demonstrate our value by showing clients they get what they pay for. It is not just fees – but fees plus indemnity – that matter, and we can often beat their program benchmarks on total costs of defense. Our analytics enable us to enter alternative fee agreements with confidence and client audits prepared. And on the occasions we do push back, as we have with the “one size fits all” approach used by some carriers to adjust billing entries, they allow us to speak with authority as an informed and trusted partner.
Our clients are among the most sophisticated consumers of legal services anywhere. They expect law firms to provide more for less and reward those who can lower the cost of delivery while maintaining quality. Realizing this, we have equipped our attorneys with best-in-class technology, enabling them to practice smarter and more efficiently than their peers. These resources include electronic document and file management systems that move us closer to a paperless workplace and reduce our environmental footprint, a central matter diary system designed to assist attorneys and staff with litigation progress, reporting, billing and court-imposed deadlines, and an electronic budget monitoring system that helps attorneys stay mindful of the costs and fees incurred while managing their files.
We have also invested in mobile applications, allowing attorneys to record their time entries on the go, and expense reporting software, enabling them to allocate expenses to files digitally, in compliance with client guidelines, from any secure desktop or mobile device as they occur.
These investments in technology are in addition to those related to cyber security, business continuity, and applications designed to streamline the creation and dispatch of made-to-order, client-specific invoicing, including eBills.
I could go on and on, as I am proud of our firm, but will close with this final point.
Change is inevitable. I hope this column demonstrates that Marshall Dennehey is listening, innovating, investing and striving to be a law firm prepared for tomorrow.
*Mark works in our Philadelphia, Pennsylvania office. He can be reached at 215.575.3570 or gmthompson@mdwcg.com.
Defense Digest, Vol. 25, No. 2, June 2019. 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. © 2019 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.