Get Ready to Rumble...

As an early pioneer of Web assisted dispute resolution, I am very disappointed to inform that relationships between insurance companies and claimants have recently taken a turn for the worse and plaintiff's and defense lawyers may already be seeing the impacts of this shift toward an increasingly adversarial environment. Of course, the economic downturn is once again the main culprit.

So, what exactly is going on? The property and casualty insurance industry depends on premium investment earnings for a considerable portion of profits. There are many profitable carriers that do not have a combined ratio (losses plus expenses divided by earned premiums) of under 100. Translated in English, a carrier may spend $1.02 and earn $1.00. However, in good times, that $1.00 can generate an extra $.16 because it is floated, or held on to for a lengthy period of time.

As you can guess, insurance carriers are not very eager to part with their capital, while their investments earnings are at all time lows. Under normal conditions, insurance companies are driven by both the compelling need to satisfy policy holders and the financial reality that legitimate claims do not get cheaper as they age. However, given the market dowturn, carriers have started digging in and cash flow has become the new profit and loss.

Here's a link to an interesting Business Insurance article, where David Siesko of Siesko Partners elaborates on the carrier perspective and its current impact on relationships with policy holders.

What does this mean for litigation professionals and the vendors that support them?
This phenomenon is having a profound impact on the industry and the impact varies according to the perspective.

Let's start with plaintiff's lawyers and claimants. If you are a trial lawyer that handles a large volume of carrier settlements, get ready for protracted negotiations, and an increase in litigation due to less flexibility by insurers. An increasing number of commercial carriers will be following in the footsteps of auto carriers and taking an increasingly rigid approach to settlement. A year ago you may have negotiated a specific injury to a $45,000 settlement. Today, a carrier may offer you $35,000 and tell you to take it or sue.

"Mill" type firms, which are dependent on high volume, low severity claims, will see an increase in receivable cycles and likely a reduction in the amounts they are able to negotiate. This will ultimately cause many firms to rethink their existing business strategies. Plaintiff's firms will become increasingly dependent on litigation financing companies to help them navigate the peaks and troughs that will be created by this new environment.

Insurance companies will become increasingly dependent on defense firms, which is certainly a positive if you fall within this category. However, it is not all sugar and spice, as insurers have begun to scrutinize every dollar spent, in an uprecedented fashion. A number of carriers are hiring additional legal bill review experts to help them turn the heat on their defense firms.

Legal vendors will be impacted differently, depending on the type of business they are in. Litigation financing is a great place to be today - just have to make sure your investment is secured by viable cases, or that the firm you are lending to is very healthy financially. It is a different ballgame today.

Some vendors, particularly ones working with plaintiff's firms, may expect a delay in receivables. Firms will not be seeing settlements as fast as they once were and this is going to affect everyone doing business with them. It is a good time to be in the cost-savings business, but you will need to demonstrate an immediate and certain financial return, to win business consistently.

So a few tips to overcome this change in carrier practices: ensure adequate cash flow by learning about and leveraging the legal financial services available on the market, keep your own operations trim and tight to remain competitive and make sure to stay on top of the aging of your receivables.

Blogging Secrets... Revealed

The list of reasons why bloggers blog is fairly vast and some of the benefits may come as a surprise. When I first heard of blogging, I naively assumed that it was something that self-centered people with too much free time did... and now here I am... hmmm.
OK, should you consider a blog and if so why? My answer is... it depends... so why do bloggers blog?

1) Search Engine Traffic
According to search engine gurus the return on your marketing investment for natural search can blow pay per click away. Blogs promoting your business or law firm can dramatically enhance your search engine position listing. This one should be reason enough for many plaintiff's lawyers looking to cast a wide net for claimants. I managed search engine optimization for a law firm advertising company back in 1999 and had the opportunity to see how powerful of a marketing tool this was, even 10 years ago. Today, with the keyword price inflation of pay per click (particularly for terms such as "Personal Injury" or "Asbestos Litigation" or "insert harmful drug name here" - you get the picture Trial Lawyers...) Should you have a blog for this purpose? The answer is: the bigger your organization is and the more critical search is in your overall marketing mix, the more likely you will need to give blogs serious consideration, as part of your overall strategy.

2) Position Yourself as an Industry Expert
If you write enough about what people want to read, they will come back. If they come back enough, you may find that one day you will actually be seen as an expert in your field. In fact, I think my mother is fairly convinced that I am an industry luminary in the litigation marketing field and sends my blog to all her friends and co-workers, so if you happen see her, please let her keep thinking that I am important...

3) Social networking with a group sharing common interests
This one is fairly straight forward. Chances are you are probably reading this because you have some interest in the litigation world, or in getting some tips on improving your marketing.

4) Cost-effective Promotion
Web sites cost money - blogs are free. They are also very easy to use and do not require a high degree of technological aptitude.

5) Communicate Message to Broad Audience
You publish a post once and the content is there forever for anyone to find. Blogs are also cumulative. The more you post the stronger your blog becomes. 20 posts are 10 times more likely to be found than 2. It is virtually impossible to not see a considerable increase in traffic if you commit to posting on a regular basis.

There are many other reasons for blogging, but these are some of the most common. Remember, Tip: Blogging is highly cost effective, but you need to be persistent to see results. It's not for every organization, but it can make a huge difference in certain organizations. If you would like to know whether a blog is appropriate for your firm, e-mail me at jzissu1-litigation@yahoo.com

More Recession Wisdom

I came across a very interesting report on marketing during a recession. It is a more elaborate and substantiated take on some points I had made in a recent post.

http://www.mb-blog.com/Images/Recession_POV1_Final.pdf

Whether you are a law firm or vendor in the space, putting the brakes on your marketing during the recession will cripple your business in the long term, particularly if you are operating in a highly competitive environment.

If you are a vendor and are in the business of cost savings, or directly helping firms acquire or retain business, there is no better time to get aggressive than now. If you can tie your offering to a concrete financial value proposition you will greatly improve your chances of getting the business.

Legal Process Outsourcing & Litigation Technology Trends - Interview with Shree Laxman of Law Allies

We have a very special posting lined up for today. I had the opportunity to interview Shree Laxman, the President of Law Allies, which is a client that I have worked with. Law Allies is a leading provider of technology, outsourcing and consulting services, specializing in the claims / litigation domain.

Q. Shree, you have worked with many progressive litigation firms. Can you tell LitigatorEdge readers, what is it that these firms do right technologically?

A. Law Firms, like many other businesses, have to understand the changing paradigm of operations in this day and age. Law firms have to be open 24/7 and attorneys need to have access to cases 24/7 and from anywhere. The thing that most successful law firms do right, is to ensure total control over their information, at all times, ubiquitously.

Q. In your opinion, what are the most critical technology elements for a plaintiff's firm?

A. Access to their information from anywhere anytime is the most critical element for a plaintiff law firm. The firm needs to have a case manager application online, and all documents should be electronic. The system should be able to "talk" to other applications like court calendars, investigation agencies, medical document retrieval systems, etc... This Web capability allows the firm to not only have presence in the immediate state, but anywhere in the US, or beyond.

Q. How about for a defense firm?

A. For a defense firm, billing is a crucial element. The traditional way of billing, which involved sending out a monthly bill, by having the attorney, paralegal and secretary dedicate time to this, is an inefficient and laborious approach to this task. The technology should be able to track in "real time" the tasks that are performed by attorneys and paralegals. Also, there is great competition between defense firms and they need need to be able to showcase their case winnings and statistics to insurance companies and other clients. Currently, many defense firms do not have a good in house library of their cases, because they lack a consolidated case management system.

Q. We hear so much negative publicity about the outsourcing of call centers and how this can adversely impact customer service for large corporations. Is it really possible for a litigation firm to improve its customer service by outsourcing functions? If so, which functions are most outsourceable for litigation firms and how does this work?

A. Outsourcing is often confused with "offshoring". The concept of outsourcing is to concentrate all resources and efforts on core functions, while not getting distracted with expenses and efforts on non-core functions. There is only one universal way of being profitable. Profits equal income minus expenses. By analyzing a firm's operations', non core functions can be identified and optimized and these functions can be outsourced to companies that specialize in these functions. Doing this can considerably increase a firm's revenues while decreasing expenses.

Q. Our blog readers appreciate how important client relationships are. What are some of the technological steps a law firm can take to improve client relationships?

A. In this day and age, access is everything. A firm has to be accessible and operational 24/7. There is no reason for a firm to be fixated by the old age model of 9-5 and confined to a single office location. A client should have access to the firm, its cases and be aware of any changes in status of its cases at all times and from any location.

Q. How can plaintiff's lawyers leverage their internal technology to become better marketers?

A. The evolution of technology in today's world has gone from Web 1.0, which was a pure plain Web site acting like a visiting card to Web 2.0, which is a service and interactive application like online banking, policy and claims handling by insurance companies. A majority of law firms and health care providers still have not embraced a Web 2.0 model and some have not even gotten to the point of Web 1.0. Plaintiff's lawyers can no longer think only in terms of having a Web presence. They need to provide a better service and better access to their clients in order to keep up with the times and with competition. The referral systems need to mature also to take advantage of the collaborative marketing - for example Google referral.


Q. You have been working with some of the most prominent litigation firms in the industry for some time now. What have you learned about working with these firms that you can share with other vendors who wish to partner with litigation firms?

A. The companies need to evolve toward service based models rather than product based models. Across the horizon, even the heavy weights of product companies like Microsoft have made a push toward Office Online and Microsoft MSN Platform. It is just a matter of time before old paradigms of product based sales will be outdated.

Well, many thanks to Shree for his valuable insight. In summary, [Tip:] make sure to keep up with technology trends if you want to keep up with the competition.

For more information on technology and outsourcing solutions that your firm cn leverage or, if you have any specific questions for Shree, please e-mail me at: jzissu1-litigation@yahoo.com.

Staying Afloat in Rough Waters

"So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance." - FDR

Economic experts are predicting that we are about to enter a period of recession that is expected to last for at least the next 12 months. Inevitably, many undisciplined investors will react and move long term investments out of equity and into conservative investment when the market bottoms out, only to miss the ultimate rebound.

There is little difference where business owners and marketing are concerned. In fact, when the going gets tough, the smart steal business away from competitors.
Challenging economic, or down business cycles, actually help sort out inefficiencies in the marketplace.

For example, if a particular defense firm has a relationship with a manager in an insurance branch office, they may have had the luxury of being insulated from competition when markets were strong. Now, the same company may have tighter cost contraints from home office that will force that manager to consider shopping multiple firms that deliver the same, or greater value at more competitive fees.

A vendor that offers cost management solutions to law firms may find that their offering is a much greater business priority today than it was just a year ago and they may actually experience a reduced sales cycle.

Consider the fact that many of your competitors will decrease their marketing spend and there may be far less marketing clutter, as well as decreased demand, which means your dollar may take you much further. As always, look for opportunities where you will get the biggest return and bear in mind that the legal world is not impacted by discretionary spending like other industries are.

Remember, the markets will eventually improve, and what affects your business affects everyone else's also. Tip: The real battle is against other firms, not the market and will be decided by which company can promote itself better, offer more favorable pricing and deliver a superior product and/or service to its clients.

The auto industry serves as case in point and I will rest my case here.

Strength in Numbers

Why is it that Fortune 500 companies can't seem to get enough of gobbling each other up? Companies merge, the large company now acquires a smaller one, then another, until the company becomes too large and diverse to effectively manage. Before you know it the company is involved in an accounting scandal that the CEO "never knew about", or the company falls to pieces as a result of risky subprime bets. Then, guess what? A white knight swoops in and... yup, you got it - acquires the collapsed business.
While there are many lessons (Do's and Don't Do's) to be learned from the world of mergers and acquisitions, here are a few reasons why companies choose to merge.

- Consolidate redundant functions and cut costs
- Gain tax advantages
- Increasing market power
- Compensating for weakness in key areas

How does this apply to litigation marketing?
Tip: There is strength in numbers.

The same principles that apply to these large companies also make sense for smaller entities. I have seen a perfect example of this in a NY no-fault/PIP firm that has brilliantly combined partner merger activity, superior marketing and client communications, technological efficiency and operational exellence to blow their competition away and gobble up market share. The merger was the catalyst for everything else that followed.

They combined one partner's marketing expertise, with another's client base, another partner brought strong operational capabilities to the table and together they created efficiencies and pooled resources. This in turn allowed the partners to focus on their respective areas of expertise, cut costs, increase marketing spending and it wasn't long after until no firm in the marketplace could keep up and they put much of their competition out of business.

Now, I am not suggesting that mergers, or even joint ventures are for everyone. In the legal field, or even as a legal vendors, getting in bed with the wrong partner can be disastrous. However, it is important to be mindful of the flip side of this coin. Make sure that you do not get so caught up in your business routine, that you ignore opportunities to strengthen your firm's or company's strategic position - your competitors may be doing just that!

Search Engine Basics

Today, search engine marketing is an integral part of many litigation firms' and vendors' marketing strategies. This post will give a basic overview to some who may be less familiar with the topic, rather than attempt to get into the many intricacies involved in managing a succesful program.

Search engine strategies can be divided into 2 simple categories:

(1) Search Engine Optimization (SEO) Simply described, SEO is leveraging the arrangement of words and links contained on your Web site, in order to achieve a higher ranking on a search engine. Over the last 10 years the SEO market has skyrocketed. When I first became involved with marketing in the legal space, back in 1998, SEO was the first marketing tactic I was responsible for managing. Back then, there were only a handful of firms specializing in this. Today there are offshore companies and a number of companies that handle this within a specific business niche. For example, most trial lawyer conference will have several vendors that specialize in SEO, or in online marketing generally.

(2) Search Engine Marketing (SEM) This is actually nothing more than paying to place text advertising on search engines when specific words are inputted into the search engine. Businesses essentially try to outbid each other to place their ads higher on search results and achieve more clickthroughs than the competition. Yes, this pretty much all there is behind the disgustingly brilliant and simple business model that is almost singlehandedly responsible for Google and Yahoo's Billions. Get the entire world to use your search engine and have every business compete for qualified traffic seeking the products and services they are offering online.
Today, there are many firms that handle SEO, SEM and other online marketing and many traditional ad agencies have developed expertise in online mediums.

I can spend days speaking on SEO and SEM, having leveraged both as part of prior business online marketing strategies and understanding the intricacies involved. While I do have to sleep at some point, I will offer one tip with respect to each. However, if you have any particular questions on the subject, I would be happy to provide answers via e-mail.

Tip 1: If SEO is a major source of lead opportunities for your business, do the ROI math and invest the appropriate capital into a firm to stay on top of this for you. Some firms will consider partial incentives based on ranking performance - I would lean toward a win-win arrangement like this.

Tip 2: Studies have shown that there is no such thing as optimal position in SEM. The optimal position is the one that gets you the most leads at the lowest investment. (In other words, traffic that clicks through when you are ad link #1, does not behave any differently that traffic clicking through ad link #5). The difference is it will cost you less to be link #5 and likely get less traffic. If it costs you 1/5 of the price and you get half the traffic, it may be prudent to consider going for link #5, unless your market share strategy dictates otherwise

Referrals: The Biggest Lost Opportunity in Business

Let's face it, there is no such thing as the perfect marketing plan. No matter who you are, what type of business you are in, there is always an opportunity to improve your marketing. With so many different business priorities, there is just not enough time in the day to focus on all the opportunities to promote your business.

Therefore, when we approach a subject as critical as referrals, I will make sure I stress that this tactic is not a "nice to have" but a "must have" in your marketing practices. That said, I would be willing to guess that 90% or more of all businesses do not have a reasonably sound strategy for leveraging client referrals.

How many plaintiff's firms follow up with their personal injury clients by sending an e-mail or letter along the following lines: "Dear Ms. Smith, it was our pleasure assisting you with your case. We wish you a speedy continued recovery.
We hope we were able to exceed your expectations while we represented you. If there is anything we could have done better, please let us know, as we are always looking for ways to improve our practice.
If you were satisfied with our service and performance, we would greatly appreciate your future referrals."

Requesting referrals is a very easy tactic that offers an astounding return on your efforts, but is often forgotten. As a defense lawyer working with a client, how about following up a positive survey response with a follow-up call? "Good afternoon Mike, I wanted to take a minute to thank you for your continued business and the time you took to provide feedback. [My pleasure] Mike I would like to ask you one more thing, do you feel based on our service level that you would feel comfortable recommending our firm to a peer? [yeah, certainly] Would you be comfortable giving me the names and contact information of 2 or 3 peers that you feel may be interested in considering our firm on their next case? [no problem] That's wonderful, thank you so much, and may I refer to the fact that we have worked with you on these particular matters [go for it] Thank you!

And that is how simple and effective referrals can be. It takes a little salesmanship, but if you give it a shot, you will be increasing your business in no time!

Tip: Think about missed referral opportunities in your ordinary course of business and try to leverage them whenever possible

What is Marketing?

Ask 10 different lawyers or business people what marketing is and you are likely to hear a very broad range of responses. To one, it may be television advertising, yellow pages and print ads. To another it's a well designed web page and intelligent search engine marketing. A third will say it's managing client relationships through effective service.

The textbook definition of marketing is actually the process through which an organization develops and communicates value to its prospects and customers. When you stop to think about it, this is quite a broad definition - and it should be.

Tip: Marketing touches all parts of your organization and it encompasses vastly more than most imagine.

Marketing is pricing, market research and strategy, messaging, appearance of marketing material, planning and measurement, service, sales and yes, the channels through which you reach your clients. Solid marketing can make a company with a mediocre offering successful and poor marketing can make a company with a great offering fail.

The best marketing organizations measure return on marketing investment for every tactic and do not engage in tactics that are not measurable.

How many times have law firms become so dependent one or two marketing tactics that they are eventually blindsided when these channels dry up, or become oversaturated with competitors? Marketing requires the continual monitoring and analysis of results, tracking of lead sources and regularly updating strategies to keep ahead of the curve.

As for vendors, many do not realize how precarious their competitive position is, absent consistent monitoring and adjustment of their marketing efforts. I have managed marketing plans that have enabled the companies for which I workedto take considerable market share from segment leaders, in short periods of time. We were able to do this by executing throughly researched, integrated marketing plans and rapidly adapting them to those channels where the highest return on investment was realized. We maximized the highest return tactics and eliminated, or dramatically reduced the rest.

In conclusion, the proper management of your marketing is your highest return on investment. If, you are not able to afford a full time resource to assist in the continual tracking and measurement of your investments, consider retaining an experienced marketer on a consulting basis for a full evaluation of your current marketing process.

If you have any specific marketing topics you would be interested in hearing about, or have a specific question that pertains to your firm, please e-mail me or leave a comment and I will do my best to address your inquiry.