In the new global marketplace, companies need to manage their efforts, quite literally, on a worldwide scale. AIG WorldSource serves U.S.-based companies with international operations, as well as foreign companies doing business in the United States. Accordingly, a wide range of claims and related legal issues arise from the four corners of the world.

WorldSource, a division of the property-casualty insurance subsidiaries of American International Group, has sought out the best technologies to help in managing its claim and claim-litigation processes.

Many in the insurance industry have looked to legal electronic billing and bill review as candidates for technological automation. Using the application service provider-version of Allegient System's Expense and Performance Management Suite has created significant benefits for AIG, especially given the volume and complexity of litigation. The new system has translated, conservatively, into an estimated five percent reduction in legal fees. Just as valuable, the knowledge garnered, has allowed AIG to monitor its claim litigation management on a continual basis. At the end of the day, everyone benefits, including the insured.

Reviewing Legal Work

Initially, the company evaluated three electronic-billing and bill-review alternatives. In addition to offering more than the other two combined, Allegient's system was selected because of the company's reputation and experience.

The implementation began with a test phase involving five law firms. AIG worked closely with the test firms to obtain their feedback, resulting in subtle guideline changes along the way. After 60 days of testing, the system was launched in the New York office. Since then, its use has mushroomed and, now, it is in production in the San Francisco, Dallas, and, most recently, Puerto Rico facilities.

Because the system is offered through ASP-delivery, AIG staff, outside counsel, and insureds have access 24 hours a day from anywhere in the world. Effective and economically sound litigation management is achieved by close teamwork between AIG WorldSource claim examiners and defense counsel. The system serves as a tool for close communication, joint decision making, and implementation of the most appropriate courses of action.

Retained counsel is required to submit legal bills electronically, using the Uniform Task-Based Management System budgeting and billing system. The fees are coded in the Legal Electronic Data Exchange Standard format to ensure uniformity.

Once the system is in receipt of an electronic statement, an automatic review process ensures that the bill conforms to AIG WorldSource's guidelines. The law firm is notified of any discrepancies and afforded the opportunity to modify the bill for compliance.

The system then routes the bill automatically to the appropriate claim examiner. Using the software, the examiner is able to focus on and analyze non-compliant billing activities and the bills themselves. With the automatic review of every incoming legal bill, the system is able to catch all coding, math, or rate errors before bills are submitted to examiners. Once the review process has been completed, the system automatically notifies the law firm that the invoice has been approved.

The system also allows AIG to analyze raw billing data. The company can monitor day-to-day litigation management activity and identify trends, all in an effort to evaluate the performance of its law firms and examiners. Using the data for reporting, monitoring, and training has assisted AIG WorldSource in improving the performance of its examiners and outside counsel.

William Wymes is the office manager for the New York Branch of AIG WorldSource. He can be reached at william.wymes@aig.com.

Special Reports /

Legal Billing Review Goes High Tech

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