A Message from the Executive Committee
"The first rule of sustainability is to align with natural forces, or at least not try to defy them." - Paul Hawken
Throughout the country, law firms that practice defense litigation are experiencing the end of business as usual. Litigation management is changing the landscape and increasing competition. No longer do clients assume they are receiving efficient, predictable and cost-effective legal services—they measure it. Law firms who perform poorly are culled from the ranks of panel counsel and what is left, depending on the jurisdiction, is an "Elite Eight" or "Final Four" who are willing and able to align themselves with exactly what the client is seeking.
The firms who make the cut and the companies who engage them have all been shaped by market forces, most notably the economic collapse of 2008. In its wake, both carriers and self-insureds have felt pressure to deliver more value to their businesses. Managing litigation costs is part of the equation but so is partnering with firms who understand their business, share their principles and are willing to adapt.
When done well, panel consolidation creates deeper relationships with firms who regard budget accuracy, guideline compliance, strategies for early resolution, alternative fee agreements, diversity initiatives, resource-task allocation, e-billing, use of technology and negotiation discipline more important than the market as a whole.
What do the firms left behind have in common? Many have been blinded by past success. Their lawyers cling to the old ways, rationalize conventional approaches, view trends with disdain and rather than align themselves, seek to defy market forces.
Marshall Dennehey is not one of those firms. We haven’t grown to nearly 500 lawyers and remained competitive for 53 years by resisting change. When it comes, we study it, teach it to our lawyers and monitor its implementation.
It’s a multifaceted approach. We begin by meeting with our clients, listening to them and staying abreast of changes in the industry. Many of our lawyers are active members in professional associations devoted to advancing litigation management services. We remain open minded and receptive to innovation. This has resulted in several carriers selecting our firm to participate in their pilot programs. We post all our clients’ guidelines on our intranet and announce updates in real time via email notifications to our lawyers. We discuss changes and initiatives through practice groups and routinely conduct formal training seminars on file handling, guideline compliance and billing issues. But we don’t stop there.
Within our firm is a team of eight internal auditors comprised of senior attorneys and retired claims professionals whose job it is to audit the files of all our lawyers on an annual basis. They evaluate and report on file handling, guideline compliance and work product. This is one of several ways we monitor the implementation of change. We also collect data, on an ongoing basis, with which to measure our performance against the metrics employed by our clients.
These practices distinguish us from other firms and keep us ahead of the curve. They enable us to enter alternative fee agreements with confidence and on-site 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 winnow billing entries, they allow us to speak with authority as an informed and trusted partner.
How else are we distinct from the competition?
Marshall Dennehey does not compensate its lawyers based on origination. This is a pervasive practice in law firms by which the attorney who first touched the client receives credit, often in perpetuity, for all subsequent assignments. He or she might then share credit with the attorney who grows the account and/or the attorney who performs most of the client’s legal work. The lawyers are then paid on the basis of their "originations."
These systems 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 construction, employment, liquor 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 unique approach puts our clients’ interest first but also fosters sharing, team work and trust among our lawyers, strengthening the firm.
We have also concluded we are strongest maintaining a regional footprint with some national practices. We currently operate 20 offices across the states of Pennsylvania, New Jersey, Delaware, Florida, New York and Ohio. Our regional approach allows for deeper market penetration and broader coverage within the jurisdictions we practice. That distinguishes us from certain "national" firms who merely dabble in the same states.
We know our nearly 500 lawyers can provide our clients better, more efficient and consistently priced legal services across six states than any other firm’s 700 lawyers can attempting to practice coast to coast.
None of this changes the fact our clients still prefer to hire lawyers not law firms. We are fine with that because we are brimming with good lawyers and not ashamed to put them out front. So many firms these days shelter associates and junior partners. Their attorneys spend years ghost writing for “relationship partners” without ever interacting with clients. By contrast, our lawyers are encouraged to interface with clients, and nothing makes us prouder than when these lawyers begin receiving direct assignments from claims professionals and legal staff who know and trust them.
Hiring lawyers rather than law firms is a common refrain, but there are important parts of our business only an organization and its resources can supply. As an organization, we provide mentoring, continuing legal education and professional development that boosts the quality of the lawyering our clients receive. As an organization, we provide opportunity to minorities, promote a common culture and become, as we have, a "Best Place to Work." As an organization we can institutionalize client service, ensuring consistently high standards across multiple locations. As an organization, we have the technological platform and human resources to customize file handling, billing and accounting functions to adapt to the unique programs of our clients. Our lawyers can also draw on the collective experience of hundreds of peers because we operate as a team rather than a collection of individual lawyers. And these same lawyers can focus on the practice of law while the organizational structure focuses on the business.
All these traits inure to the benefit of our clients. They sustain us as a law firm and separate us from the crowd. At Marshall Dennehey we are proud of who we are, what we do and how we do it. We hope you’re proud to partner with us.
*Mark can be contacted at 215.575.3570 or gmthompson@mdwcg.com.
Defense Digest, Vol. 21, No. 2, June 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. Copyright © 2015 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.