Historically, litigation management has centered on pre-injury procedural aspects, such as negotiating the lowest hourly rates or pushing for discounts, whether it be a percentage of the bill or a flat rate. Hourly rates are important, but the concept of getting what you pay for cannot be discounted. The attorney with a lower rate and fees could end up with inferior outcomes that result in overall higher claim costs. If not monitored, lower rates and discounts could also result in non-essential litigation to make up the lost revenue due to lower rates and discounts.

Best practices and litigation guidelines usually delineate procedural aspects like timeframes for submitting reports, limits on travel expenses and limits on time spent for various components in the litigation process. Evaluating legal bills for adherence to rates and litigation guidelines can be an administrative nightmare for adjusters and as such, utilization of a vendor to review bills and make sure they are in compliance is advisable, so long as the associated costs are justified.

Selecting the right attorney is very important and should not be based on personal relationships alone. Simply put, some attorneys are more experienced in complex litigation matters and claim assignments should be made accordingly. Identifying claims through the predictive analytics process can help guide the selection and ensure that the right attorney is selected for each claim. Equally important, it is critical to make sure the adjuster understands that their responsibility is to manage the litigation process as opposed to turning it over to counsel and/or letting the litigation control the claim.

Once an attorney has been selected, it is critical that a realistic budget and a well-defined litigation strategy are established. Once the strategy is in place, the adjuster must remain cognizant of developments and associated litigation costs and make adjustments when necessary. The overall cost of defense should be considered in disposition plans as it makes no sense to litigate a claim for two years only to settle for an amount you could have settled for at the onset of litigation.

Post-litigation management has traditionally involved minimal benchmarking that compares litigation costs against historical results. Unfortunately, these efforts are generally more focused on the costs as opposed to overall outcomes. Oftentimes claims are closed without assessing whether pre-litigation goals were met, how close the budget came to the actual costs, whether the litigation duration was appropriate and most important, a determination on whether the selected counsel successfully mitigated the overall claim costs. Very little time and effort is currently given to analyzing litigation outcomes and the actual impact the attorney had mitigating the overall claim costs. Once implemented, an assessment on the overall litigation and claim outcomes can help determine the best attorney for future claims and ultimately, keeps the litigation management focused on the “big picture”– total claim costs.

In closing, benchmarking, predictive analytics and psycho-social analyses are ever-growing elements within the workers' compensation claim management process. There is a wealth of data that can be very helpful in identifying when claims should be assigned to an attorney and determining the best counsel for each case based on their expertise. Incorporating the data assessment with a post-litigation outcomes-based assessment will have a significant and positive impact on the entire litigation process and more important, the total cost on the claims.