This is the final installment of a series detailing the fivedisciplines at the core of an effective data metrics program forclaims litigation organizations.

So far in this series, I've written about the importance of a good metrics program, how togenerate 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 specifictypes of reports that will help you act on and improve outcomes.Each of the following report categories plays an important role inmanaging your claims litigation program.

Outcome reports

Outcome reports show where the claims organization standsrelative to costs, inventory, etc., so that management candetermine overall performance and results. Normally segmented at arelatively high level (such as claim type or organizational unit),outcome reports are not intended to evaluate performance at theindividual or law firm level, but to provide information aboutoverall 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 subjectmatter, but provide more detail that helps to determine performancefor individuals, teams and law firms. They show the level ofcompliance with disciplines designed to improve performance andwhether those strategies are working. Improved performance shouldbe reflected in ongoing outcome reports.

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

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

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Exception reports

Exception reports support immediate identification ofnon-compliance in critical areas and identify precisely who needsto comply. They are used tactically to promptly identify claimsthat are going awry, events that impact management plans, andsimilar issues. They do this by providing very granular informationabout claims, individuals, law firms or activities.

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

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

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Combined reports

Combined reports aggregate different metrics around a particulartopic in order to provide overviews of relevant information. Thissupports performance evaluation and strategy deployment bysummarizing information about several different aspects of claimsor law firms. Some examples are:

• Claim summaries, which show items such as spend over time,resources and law firm(s) used, risks, case evaluations, budgetperformance, 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 operationalmanagers, identify and prioritize drivers of cost, inventory andoutcome, revealing the greatest opportunities for improvement. Theyshow the claims, law firms, matter types, and more where strategicand tactical management can most effectively reduce cost, loss andinventory.

Analytic reports should be generated by individuals whounderstand the legal process so that they can interpret theinformation presented. They should also have the skills to usebusiness intelligence to generate iterative reports that find rootcauses of results. The information is then used by management toprioritize 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 (andwhy).

It is important to understand that all of these report types arecritical. Claims organizations sometimes place all of theiremphasis on outcome reports. However, while outcome reports areindeed essential, they only describe what has happened. Bringingthe other report types into your claims litigation strategy makesthe data actionable and actually drives strategies and tactics thatmove the organization closer to its goals. Outcome reports have acentral role, but to change the results they display, you mustaggressively use performance, exception, combined and analyticreports as well.

As director of decision support servicesat Wolters Kluwer's ELM Solutions, Bill Sowinskileads an expert team in the design of legal spend analyses andbenchmarking disciplines. He works with clients to structure andevaluate their legal data, helping to develop and deploy strategiesthat improve legal and claims department performance. Email himat [email protected].

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