An Existential Crisis?

It’s time for defense lawyers and insurers to ask themselves, “Is there a better way?”

-an article published in CLM Magazine

We are in a time of crisis, whether we want to believe it or not. Our industry has resisted disruptive innovation for years.

We think because we use email, have a firm website, subscribe to Westlaw, purchased some data-storage software, or use PowerPoint (occasionally) that we’re up to date; that we’re tech savvy; that we’re consistent with (if not ahead of) the trends. But we are not.

The frank reality is that lawyers are only a few steps removed from communicating with carrier pigeons, wearing powdered wigs, and dipping a quill pen into an inkwell. It’s time to shake things up.

You’ve Lost that Lovin’ Feelin’

Can you imagine a time when any movie you wanted wasn’t available on-demand, without commercials, and without leaving your home? Netflix, Apple TV, Prime, Hulu, Peacock—it seems there is a never-ending list of streaming services that, for a monthly fee, allow you to consume vast amounts of content with just a few clicks on your remote. Now add up the average costs: $14 here, $20 there—let’s say you spend $50 to $75 per month. It feels like a lot, but it grants you access to tens of thousands of choices. It is almost an infinite supply of content that is updated constantly.

Now, keep those thoughts about cheap, available entertainment content in your mind, step into your DeLorean, rev up the engine to 88 mph, and tell us: “Where were you on Wednesday, March 11, 1987?”

The number one show on television was “The Cosby Show” (yikes!). The number one song was Bon Jovi’s “Livin’ on a Prayer” (still holds up!). We were in the midst of Reagan’s America, and the biggest blockbuster of the previous year was about to be released on VHS. Some may not realize that when “Top Gun” was released on video, it changed the industry forever.

There have been plenty of articles addressing this seismic shift. Still, the gist of what happened is simple: Before the VHS release of ”Top Gun,” videos were, with some earlier exceptions, prohibitively expensive, with some priced around $70 (in 1987 dollars) and sometimes more. The logic was that people already paid around $4 to go to a movie, and they could only watch it one time. So, for $70, people could buy the film and watch it however many times they wanted (or at least until the tape got worn out and distorted and flickered, or it got unspooled, and you couldn’t rewind it the right way. You just had to live through it to understand).

So, what happened? Paramount—the production company behind “Top Gun”—struck a deal with PepsiCo, which included a commercial before the movie that ran on the tape. Riffing off of the plot, the commercial featured a fighter pilot who rolls his fighter jet over to pour the perfect sip of an ice-cold Diet Pepsi. Classic ‘80s advertising. The deal between PepsiCo and Paramount allowed “Top Gun” to be widely advertised, for those VHS costs to be driven down for Paramount, and for the price point to be lowered to $26.95 (which had never been lower). 

It changed everything.

If you could buy the most popular movie in America for $26.95, you aren’t going to want to spend $79.99 to watch “Footloose” (unless, of course, you failed to return a rental to Blockbuster). What is interesting is the subtlety with which these “innovative” decisions changed multiple industries. This was neither the first time commercials were used as advertising, nor was it the first time a popular movie was released on VHS. But it was innovative to cross-pollinate product-placement advertisement with a VHS release, adding an attractive and competitive price point.

And that’s the central takeaway for our profession. We do not need to reinvent the wheel. Before Facebook, there was MySpace. Before texting, there was AOL Instant Messenger. We don’t need to wear black turtlenecks, faded jeans, and New Balance sneakers to shake up our thinking and do things. We also can’t rely on a DVD and think we’re tech-savvy. And we also can’t afford to remain stagnant and resist change, technology, and emerging trends.

How Do We Innovate?

An excellent first step is a critical self-examination that strips down how we litigate from the outset and looks for ways to make the process more efficient and cheaper for our clients. But, unfortunately, our profession, on both the legal and claims sides, is, in most instances, resistant to criticism. Maybe it’s ego, maybe it’s defensiveness; maybe it’s just human nature. But we don’t like being criticized. We’re consistently in attack mode, and we often resort to oversimplifying complex issues and overcomplicating simple issues.

We need to take a page out of the playbook from our distant cousins: physicians. Leaving our personal feelings aside—which are perhaps influenced by personal anecdotes, inflated expert bills, and a general sense of overwhelming self-importance—one area in which physicians excel is the critical self-examination that takes place within their profession, combined with a perpetual need to improve processes and procedures.

Think about this: The associate/partner and overall law firm framework has been around for more than 100 years. While not invented by Paul Cravath (George Westinghouse’s lawyer in his battle against Thomas Edison, circa the 1890s), he developed a set of principles that guided the growth of major law firms in the late 19th and early part of the 20th century. This system exists and permeates through our legal structure today.

Maybe it’s time to toss the yellowed books with the pocket updates and ditch the emulation of a long-deceased corporate lawyer whose world bears little resemblance to the one we know today. Imagine if surgeries were performed the same way today as they were 100 years ago?

What the medical field does well is put an emphasis on continuing education with a practical component, academic research, development, experimentation, and advancement. It is not perfect; it is not without costs and drawbacks. But medicine improves over time. Open-heart surgery was first performed in the 1940s. The first human heart transplantation surgery was completed in 1967 in South Africa and the receiving patient survived only 18 days. That was 54 years ago. Look what has changed! Can we say the same for our industry?

 Let’s quickly examine a case through the standard litigation cycle.

•     A claim is made or a complaint filed.

•     Initial discussions take place between the claimant, their counsel, and the examiner assigned by the insurance company.

•     The case is assigned to panel counsel. Answers are filed.

•     Discovery is conducted.

•     Records are reviewed and depositions are taken.

•     Summary judgment motions are drafted and filed (and then denied).

•     Experts are hired.

•     Trial is scheduled.

•     Trial preparation commences.

•     Your ulcers act up, you lose sleep, you’re perpetually cranky, and you snap at your family (if you see them at all).

•     The case settles.

Does this cycle sound familiar? We can tell ourselves that the litigation industrial complex does not allow for ingenuity or creative thinking, but we’re wrong. The commonly cited statistics (if believed) indicate that more than 90% of personal injury cases settle before trial. However, some statistics place that number closer to 95%. On average, nine out of every 10 personal injury cases we see in our professional careers will not go to trial. And yet, we follow a recipe for preparing for something that will rarely happen. Where does the innovation take hold?

The theme here is that innovation does not mean radical change. Even disruptive innovation can be as simple as a low-priced VHS tape with a commercial at the beginning. Based on our observations, there are some straightforward, simple ways for innovation to take hold in our industry:

Internal collaboration (without charging the client). Take a minute and think things through, consult with your co-workers or trusted colleagues, and stop looking at life in .1 billable increments. Real innovation and creativity can and will spring by shifting your perspective and stepping outside of your bubble.

Educating ourselves about available technology. We are not suggesting that everyone needs to start learning binary code. It is, however, time to be a little bold. Investigate case management software and see what works; analyze your monthly bills with an eye toward whether some form of automation may reduce costs to clients or shareholders; and research upcoming technology trends and look at what can be applied to your daily work routine.

Understand, at the most basic level, what clients want and know what is essential to them. Then, step away from the know-it-all boss/employee mentality and start working toward collaborative solutions. And, for the love of God, stop with the emails!

The goal (and theme in our series of articles) is to re-examine how we typically do things; to ask repeatedly, “Is there a better way?”

Earlier this fall, Netflix released the movie, “Worth.” Starring Michael Keaton as attorney Ken Feinberg, the story follows his attempts to convince victims of the Sept. 11, 2001, terrorist attacks to opt into a fund that will govern and provide for their recovery. Doing so will require a commitment and agreement that the victims do not proceed with litigation and file a lawsuit. The reasoning was that, given the widespread damage caused by the attacks, lawsuits (especially against airlines) would send devastating shockwaves through the entire economy.

The arguments Feinberg and his team used with the victims included, among others, that litigation was lengthy and costly, that there was no guarantee of a successful outcome, and that opting in to the compensation fund would guarantee more money now and allow them to move on with their lives.

This dispute resolution system is designed for major catastrophic injuries. What if the decision-makers had just said, “Sorry, this is why we have trials”? Yes, not every case equates to the tragic events of Sept. 11. But what can we learn?

Any lawyer watching this movie should have heard alarm bells. It is a perfect example of a macro idea that needs to be applied at a micro level. We humbly propose a similar idea: one where lawyers, insurers, and even claimants can have frank discussions before the onslaught of litigation sets in and ask, “Is there a better way?” Perhaps we should, as an industry, be looking for ways to drive down costs; and perhaps having a separate, private resolution tract monitored by an independent governing body might be a more efficient and—dare we write it—humane way to proceed?