Recently I was the subject of a well written post by one of my favorite people, Kevin O’Keefe, in Above the Law. Kevin talked about an idea I had about a better way to handle the kind of work I have historically done: mass tort defense.
By way of background, I have spent most of my career defending mass tort actions, either litigation stemming from a single disaster or from non pharmaceutical serial litigation.
Historically these cases commanded premium rates as we pioneered such innovations as sophisticated joint defense ideas or early case assessments to flat fees when no one had even heard of them. My recent idea was born when I faced the problem and reality that those who used to pay premium rates for this kind of work though were no longer willing to. I wondered why since the amount at stake would seem justify some pretty hefty rates, as it always had.
The more I talked to clients the more I sensed frustration: frustration with paying what they considered exorbitant rates to get work done that they thought could be done for less by non lawyers
The more I talked to clients the more I sensed frustration: frustration with paying what they considered exorbitant rates to get work done that they thought could be done for less by non lawyers. It wasn’t so much the clients minded paying me my market rate-they appreciated and valued what I brought to cases. What they didn’t like was paying for the leverage pyramid they perceived I was bringing with me. They just didn’t see the value of what we were charging for a lot of the work we were doing that didn’t require the special skill set and experience that I and others like me brought to the table. Not having any other alternative, they simply decided to pay less in rates for all those working on their mass tort files to reduce the overall costs to what they thought were an acceptable level.
This got me to thinking about what my value was, what it wasn’t and how I could get a large portion of the workneeded to defend a mass tort action done at lower and more predictable rates. I believed, then and now, that what I bring to the table in terms of experience and value was appropriate with the rates I thought I should receive. I realized though that the work for which my experience and value (and my firm’s experience and value) really didn’t add much should be charged at much lower rates than what were actually charging. But how to do that?
My first idea was to charge my normal rate for what I did best and then have my firm offer at flat fee for all the other less critical work that has to be done. This made sense to me but not to my clients: they perceived quite rightly that for my firm to do this, the flat fee we wanted would be too high and wouldn’t be justified. Given our overhead, cost structure and business model, we just couldn’t do it profitably at an amount they would find appealing.
This made me pivot and instead look to see if there was a way to outsource some of the work to entities that could do this work just as well and for an attractive flat fee for my clients. Enter the alternative service provider, Elevate. Elevate believed they could do much of this work for a flat fee leaving me to provide the high-end advice and strategy and that they could do this work at a level that was both profitable for them and palatable for my clients.
So together with Elevate we began to study this concept and how to partner together to offer a package. Fortunately, we attracted the interest of Dan Linna, a full time professor at MSU Law, Director of LegalRnD and adjunct law professor at the University of Michigan Law School. Dan recently created the Legal Services Innovation Index and has been studying the concept of collaborative disaggregation (or what I would call unbundling) of legal tasks within a case and wanted to look hard at what we were doing.
So we are now collectively studying whether this unbundling concept will work and how to actually do it. We have had sessions with my firm and team and with various clients and as it turns out, there seems to be a fairly bright dividing line between what my clients value me for and want me to do and what they would be happy having an outside provider managed by me do. They want me to do the early case evaluation, determine the estimated exposure and formulate an overall game plan to bring the case to conclusion.
After that, they basically want me to implement and be responsible for the case and for the game plan.
They are more than happy to leave it up to me to figure out how to process manage to matter to get the other work needed to bring the case to conclusions done. How I do that is less a concern than the cost and predictability of the cost.
They are more than happy to leave it up to me to figure out how to process manage to matter to get the other work needed to bring the case to conclusions done. How I do that is less a concern than the cost and predictability of the cost. So a provider like Elevate providing back end work and support at a flat fee makes perfect sense to them. And they like the idea that they can go one place to have all this work managed by one vendor as opposed to having to coordinate among several entities.
So the theory that the unbundling of the work and the outsourcing of certain parts of the work as a way to lower costs seems to be consistent with what clients want and are looking for.
But the devil is in the details: we have to figure out such things as:
- Where is the dividing line between what I should do and what Elevate will do?
- How do Elevate and I partner to be sure we can get the right result at a price that is good with Elevate, profitable for my firm and gets the same high end result for the client?
- Can there be a set formula for who does what or is each case different?
- Can and how will a law firm and alternative service provider woprk seamlessly as one?
- What about the work that Elevate is not equipped to do and falls outside my expertise?
- What are the ethical implications?
- How will the marketplace react: its one thing to talk in concepts but the proof will be when we have a real live case to work on.
This is an exciting idea and its great to work smart people like Nancy Michalski and Dan Coll at Elevate and Dan Linna at MSU. If it works, I see it being applicable not only to mass tort but to all kinds of matters. It’s already become clear to us that the notion that all work in a case has to be done by one or more lawyers or a law firms is not necessarily still valid-if it ever was.
We hope to offer a new and better mousetrap. Stay tuned.