August 14, 2022

Archives for September 2012

Adjusters — Revisit the Power of “No!”

In May of this year, I posted a blog on the importance of the word no for adjusters to maximize their personal and professional effectiveness  (see

This point was underscored after reading recently an excellent book by Peter Bregman titled, “18 Minutes:  Find Your Focus, Master Distraction and Get the Right Things Done.”  ( I highly recommend this book!)

On page 122 of the book, a paragraph jumped out at me:

Never before has it been so important to say “No.” No, I’m not going to read that article.   No, I’m not going to read that e-mail. No, I’m not going to take that phone call. No, I’m not going to sit through that meeting.

The point is not to be a negative adjuster or claims person or to garner the reputation as one.

Rather, it recognizes that we all have limits. We have limited time. We have limited energies.

Where will we focus and deploy that time and those energies? Is it on the activities that drive us further toward our personal and professional goals?

Or will we scatter out time and energies responding to stimuli which represent the needs of other people? Clearly, there is a happy medium given the fact that adjusters are in a customer service business.

When you say “Yes” to something, you are saying “No,” implicitly to something else. Harness the power of no in order to maximize your personal and professional effectiveness!

Question:  have there been times in your claims career where you have had to set limits and say no in order to maintain your effectiveness? Post your answer here or respond off-line

Seven Questions to Ask Candidate Law Firms to Assess the “Billing Culture”

One huge aspect of shopping for legal services involves fee discussions.  It is common to gather hourly rate information and fee schedules from candidate and incumbent law firms.  Whether you are a claims professional, risk management, insurer employee, TPA rep or an in-house general counsel, you must make sound cost decisions when selecting outside counsel for your legal needs.

A simple review of hourly rate or fee schedule may not tell you all you need to know, though, in managing litigation, controlling costs or assessing a good economic “fit” between yourself and a law firm.  What hourly rates and fee schedules will never tell you is the “billing culture” within a firm.  Hourly rate tells you nothing about how efficiently a lawyer works.  It masks the situation where the firm low-balls the hourly rate but “makes it up” by laying on charges with  a heavy pencil.  If the firm arranges to take twice as long to draft a motion or research some point of law, the 10% reduction in fees you won are now offset.

That is a false economy.

While it’s easy to determine hourly rate, discerning a firm’s billing culture is notoriously difficult. That does not mean that it is impossible, however, or that the discerning buyer of legal services shouldn’t try nonetheless.

How do you get to the issue of a firm’s “billing culture,” the degree of pressure within a firm to pump up the volume on billings?  One approach comes from asking the right questions during the “courtship phase.”  This is part of doing due diligence on any attorney or law firm that you are considering. These may be out of the norm from the usual list of interview questions posed by risk managers, adjusters and other buyers of legal services.

Nevertheless, these questions can poke beneath the surface gloss, to probe the depths of the billing culture of the law firm in question. Consider these questions to discuss fee issues with any firm you are considering using.  True confession time. I cannot take credit for these.  They come from Chicago attorney Mitch Orpett of Tribler Orpett & Meyer.

Orpett rightly observes that few clients pose the following questions to law firms:[1]

  • What is the minimum number of hours your associates and partners are expected to bill?  (We hear of some firms that have minimum billing quotas of 2000, 2200 or 2400 hrs. per year. That puts a premium on heavy billing.)
  • What are the bases of attorney compensation and advancement?  (Is work quality considered?  How? What percentage of the evaluation is driven by production of billable hours?)
  • Are billing minimums used, particularly by new attorneys who often handle the firm’s motion call for each day’s scheduled court appearances?
  • What kind of training do new lawyers receive from the firm and who pays for training time?  This tells you the commitment that the firm has or lacks with regard to ongoing continuing education.
  • How are attorneys supervised?  What is the firm’s general culture?
  • Do your attorneys engage in non-billable activities?  Who is responsible for reviewing and approving bills?  Is there some kind of quality control or quality check on bills before they go out to the client or the insurance carrier?
  • Do attorneys receive bonuses for hitting certain billing targets?

By posing these questions, you are putting yourself ahead of probably 90% of all clients.  Many (most) client meetings with firms are “grip and grin” glorified social calls.  It need not be this way.  You do not have to transform yourself into The Grand Inquisitor, but pack the exchange with substance.

Let’s be clear and not dismiss out of hand the relevance of hourly rate as one data point to capture. None of this means that checking out the attorney’s or law firm’s hourly rate is irrelevant.  Do not throw away the fee schedule.  Factor in those quantitative data points but leaven them with answers to these searching questions.  Listen carefully to the answers.  Then and only then decide if, financially, you and the law firm are a good fit.

What is missing here?  What do you find are other ways to assess a law firm’s billing culture in order to help manage litigation costs?  Share your thoughts here.


[1] “Crisis in Billing: Is There a Professional in the House?” White paper by Mitch Orpett Esq.

Police Reports: Investigative Linchpin or Adjuster Crutch?

To what extent should an adjuster rely upon a police investigation? Should it substitute for the adjuster’s investigation or part of it? Or, should it simply augment the investigation but not be viewed as a substitute for it?

This issue arose recently in the context of a bad faith claim where I was engaged as an expert witness. The plaintiff/policyholder alleged, among other things, that the insurance carrier failed to conduct an adequate investigation. Part of the argument was that the insurance adjuster relied too much on the police investigation and did not do more in the way of taking a formal statement from the policyholder and interviewing witnesses.

The Police Report reflected the account of the incident (an alleged assault and battery) from the standpoint of the insured and of witnesses. There was no dispute about what happened in the incident itself. The coverage dispute pertained more to the policyholder’s intent and whether his actions triggered the “expected or intended” or the “willful and malicious” policy exclusions.

This raised the issue as to whether adjusters are obliged in every case to go beyond the Police Report or whether, in certain cases, the report can be the cornerstone of an adjuster’s investigation.

As new adjusters, we are often taught — rightly — to NOT view police reports as sacrosanct. Police Reports can contain errors, just as medical reports or even attorney reports can contain errors. Typically, police are not eyewitnesses to an accident or incident. Their reports will capture facts relevant to the breaking of laws and ordinances.

However, in some instances a Police Report might serve as the cornerstone of a claims investigation. This is not to say that the Police Report always constitutes the end-all and be-all of a claim investigation. It is not to say that the Police Report is necessarily the entirety of an adjuster’s investigation. However, there may be situations where there is no need for the adjuster to plow the same investigative ground that the police have tilled if the basic facts of a claim are not in dispute.

Consider a straightforward accident where Car  A rear-ends Car B.  No one disputes that, and it is reflected in the police report.  Is the adjuster still obliged to track down, identify and take statements from all witnesses? At some point, this appears to be overkill.

Unless the adjuster is on notice that the Police Report is in some way erroneous or disputed, and if nobody disputes the basic facts of a straightforward accident, there may be instances where the adjuster can rightly rely on a police investigation for the bulk of the fact-finding without being accused of laziness.

The overarching principle is that adjusters and insurance companies are obliged to conduct reasonable investigations. This is required in many state unfair claim practice statutes. It is also found in the NAIC Model Unfair Claim Practices Act. Of course, “reasonable” is not defined. There is no paint-by-numbers description of what goes into reasonable. The statutes do not delineate the components of a “reasonable” investigation. What is reasonable in terms of investigation must be determined by the particulars of each individual claim.

At one extreme, you have straightforward scenarios where it is undisputed that Car A rear-ended Car B. If the police report reflects that, both drivers agree and there is no evidence to the contrary, then perhaps the police report can serve as the cornerstone of the adjuster’s investigation.

At the other extreme are complex and disputed facts situations. These could include the Deepwater Horizon oil spill in the Gulf of Mexico or the Fukushima nuclear meltdown in Japan. Here, official reports might be taken with a grain of salt and should be the starting point, not the endpoint of an insurer’s investigation.

So, where do you stand on the issue?  Are there situations where the Police Report can substitute for a big chunk of the adjuster’s investigation, OR is the adjuster obligated to always go back over the features captured in the report? 


“Employment Practices Liability” Blends Legal Insight with Risk Management Savvy

Employment Practices Liability: A Guide to Risk Exposures and Coverage, Second Edition, by Britton Weimer, Eric Satre, Andrew Whitman and T. Michael Speidel, The National Underwriter Company, 2012, 306 pages, $96.

“Our employees are our greatest resource.”

Does this corporate slogan sound familiar?  Increasingly, though, employees — and employment practices liability (EPL) — can be one of a company’s greatest liability exposures.        Employment practices liability is a growing concern for increasing number of businesses and organizations of all types.  In both claim frequency and severity, claims and suits are burgeoning.  Mitsubishi, Texaco, Circuit City.  The list of companies stung by harassment, wrongful termination and discrimination claims keeps growing.  (A few administrations ago, even the President of the United States was open to legal attack.)

Since the 1990’s, there has been over a hundred-fold increase in complaints filed with the Equal Opportunity Commission.  Claims alleging workplace discrimination produce an average court awards in the six-figure range.  Allegations regarding raises and promotions produce average awards of $350,000.  Sexual harassment claims net on average awards of about $150,000 apiece.  Scarier still, those are just the cases going to trial; over 95% of all these claims are settled prior to trial.

Those numbers, along with growing publicity about the problem, cause more and more companies to sit up and take notice of EPL exposures.  Corporate claim and risk managers are wisely adding employment practices to their list of areas of concentration.  How do corporate claim managers address the financial challenges of EPL claims?  Help is here in the form of the National Underwriter’s Employment Practices Liability: Guide to Risk Exposures and Coverage.

All four co-authors of this updated book are attorneys. Brit Weimer and Eric Satre  are in private practice in the Minneapolis area. Andrew Whitman is an insurance consultant and expert witness. T. Michael Spieled is an attorney/dentist.  If you assembled the Olympic basketball equivalent of a “Dream Team” for employment practices law, you would have the authors of this latest book.

Fourteen years have passed since the National Underwriter published its first edition of Employment Practices Liability, so the text was ready for an update, given the changing landscape and prominence of employment practices liability. In the intervening years, employment practices have become more prominent as a risk for risk managers to address, either through insurance or not insurance means.

So, if you have a copy of the earlier edition of Employment Practices Liability, why would you — or should you — invest in this latest version?  What is new about this second edition of employment practices liability?  In general terms, differentiating the second edition from its earlier version is a more detailed analysis of EPL claims, coverage, and risk management.  Beyond that, there are three specific reasons:

            #1.  Heft.  Readers get much more content than what appeared in the first edition.  It is not just “filler, either.  The latest iteration of the book is about twice the size of the original edition.

            #2.  Updated content on “hot spot” areas.  EPL now includes a significantly expanded analysis of whistleblower and reprisal claims, which are now much more common than they were in the late 1990’s.

            #3.  FSLA content.  EPL includes a full chapter on FLSA claims, which were barely on the radar back in 1998, but are now a major concern for employers.

The book subdivides into eight chapters, revolving around the following themes:

Chapter 1 – Policy Coverages and Exclusions

Chapter 2 – Workers Compensation/Employers Liability

Chapter 3 – Other Liability Policies

Chapter 4 – Obtaining and Managing Insurance Defense

Chapter 5 – Avoiding Wage and Hour Claims

Chapter 6 – Avoiding Discrimination and Harassment Claims

Chapter 7 – Avoiding Whistleblowers, Retaliation and Wrongful Discharge claims

Chapter 8 – Employment Risk Management from A to Z

In addition to these chapters, which are packed with tips, the book contains a handy glossary and five appendices that cover each state’s complaint processes, forms, time limits for complaint filing, and other resources.

Another handy feature for busy risk managers is that each chapter concludes with a risk management overview. These include bullet points and key takeaways from the chapter just concluded. Although all four authors are attorneys, the book is accessible to any risk manager and is not unduly weighted down by lawyer jargon and gobbledygook.

The chapter on “Employment Risk Management from A-Z” alone is worth the price of the book. Some may be off-put by the $96 price tag of a soft cover volume.  That would be short-sighted, though.

If having this reference and implementing merely a fraction of the ideas prevents a single employment practices liability claim, the risk manager’s modest investment in the book has a multiplier return on investment. Of course, as in the case of any risk management book, one must actually implement the ideas contained within the covers. As motivational guru Tony Robbins has said,” knowledge isn’t power – – action is power.”

NUCO’s Employment Practices Liability is an excellent — and practical — guidebook that belongs on the shelf of every practicing risk manager and human resource professional.


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