Dream Job was an ESPN reality show in which young slackers and sports nuts vied to become a real-life Sports Center newscaster. The winner got a one-year contract and the right to shout "Boo-yah!" during footage of home runs sailing over ballpark fences.
Some defense lawyers also are discovering their dream jobs. Defendants facing class action lawsuits or other mass torts often embrace a national coordinating counsel structure to guide their claim defense. Increasingly, however, defendants clamor and lobby insurers to fund national coordinating counsel when they have few claims or lawsuits. I have seen adjusters being pressured to appoint national coordinating counsel when there have been three or four product liability claims. In one case, a company that did not yet have a single claim entreated us to appoint national coordinating counsel for it.
Perhaps goaded by law firms, who see such assignments as plum jobs, some corporate clients and risk managers are convinced that this arrangement is a prudent step for their insurers to fund and implement. Let's examine the tradeoffs, the pros and cons of adopting a national coordinating counsel model for claim defense.
On the Plus Side
It's no mystery why many companies are intrigued with national coordinating counsel when facing threatening litigation. Benefits of national coordinating counsel include:
o Coordination and management of litigation, managing discovery, coordinating a company's discovery
responses, preparing company witnesses for deposition and trial, coordinating work of consulting or
testifying experts, and actively preparing cases for trial.
oExpertise in states' statutes, regulations, and industry practices that govern the claims and cases at issue.
oConsistent reporting to apprise management of the scope and magnitude of pending matters. The client can better model case reserves and institutional exposures.
oContaining costs and fees, as the client must rely less on local counsel. National coordinating counsel's institutional knowledge produces more favorable resolution of pre-litigation claims.
oLocal counsel whose experiences justify being part of the overall defense team.
National coordinating counsel often is attractive to companies for additional reasons. These include consistent discovery approaches, document production and interrogatory answers. Handling interrogatories one way in Oklahoma and in a different manner in Massachusetts invites disaster. This is especially true when plaintiff attorneys coordinate and share information about prosecuting high-profile cases. Inconsistency in document production invites court sanctions and undercuts the credibility of the defense.
Coordinating a defense strategy on a broader scale also avoids duplication of effort in educating local counsel and not having to reinvent the wheel. When a different local firm is assigned to defense in dispersed areas, clients tire of orienting and training attorneys on the same issues again and again.
Client convenience in having a single or centralized point of contact, in lieu of managing dozens of outside law firms and legal counsel, also is an advantage. National coordinating counsel can help guide and evaluate local counsel, making sure that the client's interests are well served. Often, coordinating counsel can bring a sensitivity to issues that transcends the defense of any single isolated claim or case. What makes sense within the narrow context of a lawsuit may be harmful in a broader business setting. Examples include cross-claims or defense postures that antagonize key customers, suppliers, or business partners.
In addition, having national coordinating counsel may reduce the overall number of hours needed to defend claims through astute division of labor among local counsel and coordinating counsel.
Conned?
As to the presumed need for national coordinating counsel, some clients and many insurers decline to drink the Kool-Aid. This is not because national coordinating counsel is never needed, but because it can be over used.
An apocryphal tale circulates of a small town that had only a sole attorney. He had so little business, he nearly starved. Later, a second lawyer moved into town. Soon, they both had more business than either could handle. An extra supply of lawyers creates its own demand.
Other potential drawbacks of calling in coordinating counsel include division-of-labor friction between them and local counsel. Who does what? Who covers plaintiffs' or experts' depositions? Will local defense counsel just be a mail drop or occupy a more substantive role? Is local counsel clear on this? Ego and turf can disrupt even the best-laid plans. Without clear communication at the outset over division of labor, fractious disputes and subtle one-upmanship among national coordinating counsel and local counsel can arise. This hikes legal costs, fragments strategy, and distracts from the task at hand.
Tactical and strategic friction between national coordinating counsel and insurers also can arise, especially regarding claim control issues. Risk managers and their companies seek national coordinating counsel because they have definite ideas about how they want a case defended or legal strategy to evolve. Often, this is a feisty, pro-defense, pro-trial strategy.
Insurance carriers harbor different perspectives than their counsel. They must pay the hefty legal bills and pick up the financial pieces if a runaway jury sees things differently. Accordingly, insurers often resist a "defend to the death" strategy, a scorched-earth policy, or a defense philosophy that says, "Millions for defense, bit not a penny for tribute." (This is easier to say if someone else, i.e., an insurance company, is the one funding the millions for defense.)
Many view national coordinating counsel as a Full Employment Act for Lawyers. Jaded insurance claim people view it as the dream job for defense attorneys, hence the perceived bias of some lawyers to persuade clients that they really, really do need national coordinating counsel.
Clashes with the insurance carrier can develop over control and costs. "There is only one 'con' I have seen," said a risk manager who prefers anonymity. "Insurers may view national coordinating counsel as an additional, unnecessary layer of expense. Until you get an insurer comfortable with national coordinating counsel, insurers will complain loudly and threaten not to reimburse defense costs. However, by explaining the pros and demonstrating national coordinating counsel's value by its performance on actual cases, we have always been successful in winning over the insurers' claim staffs."
Another concern is that hiring a special defense team may send the wrong message to opposing counsel that the litigation really is a significant issue. Plaintiff attorneys realize that clients appoint national coordinating counsel when they have large problems. Establishing this structure may telegraph to personal injury attorneys and others that the case has substantial value and exposure.
Why Should Risk Managers Care?
Admittedly, the risk manager likely will not be grappling with issues of national coordinating counsel alone. There is no naivet? that risk managers are the ones within their organizations who would select national coordinating counsel or make major decisions in this area. Likely, the risk manager will work closely with the organization's general counsel or in-house claim manager, if one exists.
Risk managers need to be conversant, however, with the idea of national coordinating counsel and its features in order to enhance the dialogue and provide needed perspective, and because the success or failure of a national coordinating counsel model can materially influence, positively or negatively, an organization's cost of risk. Indeed, the decision to embrace or forego a national coordinating counsel model also has implications, positive or negative, on the cost of risk with which risk managers wrestle.
So, is national coordinating counsel a dream job for underemployed defense lawyers or is it a dream answer to risk managers' litigation headaches? The right response may be, "All of the above." Depending on the circumstances, national coordinating counsel may be a needed tool for effective management of litigation risk. In other cases, it can become an expense train running out of control. It is a tool and, like any tool, can be employed deftly or crudely. In case of litigation emergencies, break glass and consider retaining national coordinating counsel.
Pros and Cons of Coordinating Counsel
Advantages
oInvesting time with one firm is better than reeducating attorneys piecemeal all over the country.
oPromotes consistent defense in producing documents, answering interrogatories, overall approach.
oSaves client time in not having to deal with dozens of different law firms.
Disadvantages
oMay add cost from two layers of counsel: local and coordinating.
oGreater chance of communication snafus; more cooks in the kitchen.
oTurf wars in allocating division of labor.
oMay be overkill, except in cases of mass tort or class action litigation.
oSends message to opposing side that the litigation is a Big Deal.
oInsurance issues in getting carrier to pay.
Wanted: National Coordinating Counsel
Where to Look?
oYour insurance company (most of them have an approved panel of attorneys)
oYour insurance broker
oSuggestions of other companies in your industry or business
oGeneral counsel's recommendations
oInternet sources (e.g., Martindale-Hubbell, www.martindale.com)
oLegal trade groups, such as:
3Defense Research Institute (www.dri.com)
3American Law Firm Association (www.alfanet.org)
3Product Liability Advisory Council (www.plac.com)
3Harmonie Group (www.harmonie.org)
3International Association of Defense Counsel (www.iadclaw.org)
Kevin Quinley is senior vice president of Medmarc Insurance Group in Chantilly, Va. Reach him at kquinley@kevinquinley.com or www.kevinquinley.com.
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