This is the final installment of a series detailing the five disciplines at the core of an effective data metrics program for claims litigation organizations.

So far in this series, I've written about the importance of a good metrics program, how to generate rich and reliable data to support it, and segmenting that data to gain insights.

In this final post of the series, I will detail the specific types of reports that will help you act on and improve outcomes. Each of the following report categories plays an important role in managing your claims litigation program.

Outcome reports

Outcome reports show where the claims organization stands relative to costs, inventory, etc., so that management can determine overall performance and results. Normally segmented at a relatively high level (such as claim type or organizational unit), outcome reports are not intended to evaluate performance at the individual or law firm level, but to provide information about overall results. Some examples include:

Costs year-to-date.
Average total cost of closed claims.
Claims received and closed year-to-date.

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Performance reports

Many performance reports mirror outcome reports in subject matter, but provide more detail that helps to determine performance for individuals, teams and law firms. They show the level of compliance with disciplines designed to improve performance and whether those strategies are working. Improved performance should be reflected in ongoing outcome reports.

The most frequently used types of performance reports are financial performance and claim inventory performance, but there are many additional types. Common reports in this category are:

Compliance to budgets.
Average open case age.
Percent of accuracy in coding tasks, activities, or expenses.

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Exception reports

Exception reports support immediate identification of non-compliance in critical areas and identify precisely who needs to comply. They are used tactically to promptly identify claims that are going awry, events that impact management plans, and similar issues. They do this by providing very granular information about claims, individuals, law firms or activities.

Unlike other types of reports, exception reports are reviewed daily or almost daily, and always include the individual(s) accountable for the results. This is because they are designed to improve outcomes by detecting potential problems as early as possible to facilitate timely intervention. Examples include:

Specific lawyers billing above approved rates on particular claims.
The 10 claims with the highest costs over the past 30 days.
Claims exceeding budget.

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Combined reports

Combined reports aggregate different metrics around a particular topic in order to provide overviews of relevant information. This supports performance evaluation and strategy deployment by summarizing information about several different aspects of claims or law firms. Some examples are:

Claim summaries, which show items such as spend over time, resources and law firm(s) used, risks, case evaluations, budget performance, etc.
Law firm evaluation report cards, which measure quality, cost, level of services, compliance, rate history, etc.

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Analytic reports

Analytic reports, normally shared with senior operational managers, identify and prioritize drivers of cost, inventory and outcome, revealing the greatest opportunities for improvement. They show the claims, law firms, matter types, and more where strategic and tactical management can most effectively reduce cost, loss and inventory.

Analytic reports should be generated by individuals who understand the legal process so that they can interpret the information presented. They should also have the skills to use business intelligence to generate iterative reports that find root causes of results. The information is then used by management to prioritize very specific methods to control or improve results. Some analytic reports include:

Claims generating 80 percent of all cost (and why).
Law firms driving 50 percent of all cost (and why).
Claim types most increasing in receipts year-over-year (and why).

It is important to understand that all of these report types are critical. Claims organizations sometimes place all of their emphasis on outcome reports. However, while outcome reports are indeed essential, they only describe what has happened. Bringing the other report types into your claims litigation strategy makes the data actionable and actually drives strategies and tactics that move the organization closer to its goals. Outcome reports have a central role, but to change the results they display, you must aggressively use performance, exception, combined and analytic reports as well.

As director of decision support services at Wolters Kluwer's ELM Solutions, Bill Sowinski leads an expert team in the design of legal spend analyses and benchmarking disciplines. He works with clients to structure and evaluate their legal data, helping to develop and deploy strategies that improve legal and claims department performance. Email him at Bill.Sowinski@wolterskluwer.com.

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Taking your claims litigation program from good to great — Part 4

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