Episode Transcript
[00:00:01] What I've done over the past couple of years is spend a lot of time working with and talking to owners and operators of personal injury law firms about their businesses, both from a financial perspective, from an operational perspective. And one of the things, because there's so much interaction back and forth that I've done is create an overview of how a personal injury law firm works from an operational perspective, from start to finish. So at a really high level, what we're looking at is a flowchart that shows the journey of a case of a client from start to finish. And I think this is really important on multiple levels as far as understanding how the industry works, understanding how law firms work, and really optimizing for the best structure. What we're not going to do is say this is exactly how this works. We're going to talk about the blueprint for personal injury law firm. A lot of this applies for various types of cases, but this really is specifically designed for auto accidents. There could be some modifications and then you could have a medical malpractice type of firm. You could have employment, you could have work comp, et cetera. So that's, that's what we're going to cover today. Really excited to share this with you all and we'll dive in here. If you have questions, post them in the chat and I'll answer them. This is a way for you to understand how a personal injury law firm's operations work. This is also really important as technology is changing and there are more and more ways to optimize for various parts of this flow. In the separate training, I've outlined the landscape of the current technology offerings that law firms can use to make their operations work better and how those, how those technologies can be plugged together. So this is the non technology version. We're just talking about the blueprint today. With that, I'll pull up the flowchart and again, love interaction. So throw your questions in the chat as we're moving through.
[00:01:49] Okay, fantastic. So I'll zoom out and show the the full scope here. What we're looking at on the flowchart. The clear boxes are internal parts of the law firm. And then the boxes that are filled in in the background, those are external pieces of your operational workflow. And generally we're moving left to right from start to finish. And there's multiple layers here. So let's take a look at what those layers are here. In the purple pinkish side we've got operational actions. The layer above that is client communication. That's anything that deals with the, the client directly. Operational actions are the things that we're doing inside of the law fir. And then below that we have data, documents, summarized data and external data sources that you could be pulling into your firm to work on the case. Now the thing that I've done with this that's a little bit different than probably how you would see another flowchart for how a law firm operates is I'm really looking at this from the perspective of where we're headed with the industry, which is that at the core for a law firm you have an understanding of the damages, model, evaluation of a case and everything feeds into that and that's ultimately the decision making place, that's the brain, the memory of every individual case. So everything feeds into that and then you're making decisions about the case. From there it gets really helpful, especially as we're moving into a phase where AI is becoming more and more of your co pilot, building and working on these cases. So these are the internal or operational sides and then the third parties that you would be working with are out here. So we have insurance carriers, medical providers, police department, co counsel. Again, this is a work in progress guarantee. There are things that are missing here and I welcome feedback on this. I'll work through that flowchart as a case progresses for a personal injury law firm and how this plays out from start to finish. First, there's two primary ways that law firms will start the process. Either a lead form submission and generically that means somebody putting a lead in on a website. It could be a lead buy lawyers. Com, accident.com, martindale, Hubble. There's a million ways a lead can come in, either through email or through form submissions. But ultimately it boils down to two things. Either you've got a live call that you need to pick up very quickly or you have a lead form and you're doing an outbound phone call back to that lead to try to establish your first point of contact. So here we have lead form submission, outbound phone call that's also going to be accompanied by integrate law firm email and text message as well to try to establish that first bit of live communication. The first thing that you're doing for an MBA firm, and this is where we're going to focus today, is your goal is to qualify and to sign that client on the first call, not to have a multi phone call, multi point interaction with a potential client before signing in. That really stands out here, is that the average consumer for an auto injury law firm is going to contact seven law firms while they're making that buying decision. If you have someone on the phone, if you've established contact, the industry standard here is to sign them on the first call, then you have to qualify that person on the call. But it's pretty easy to qualify an MVA claim at a high level. Sign them, get them on retainers, stop the shop from there. There may be additional information that needs to be gathered. That's fine, but you need to get them signed to a retainer speed to lead. How quickly you get back to someone really matters because those seven law firms are in pretty tight spread. You want to get them signed on the first call so they don't keep shopping around. So first call based qualification and then client contract or retainer signed on that initial call. A couple of things that you're seeing here is the call based qualification. If you're an MVA firm, you get a hundred calls. In the minority of those calls generally are going to be calls that you sign. Now there's some exceptions to that like if you're dealing inbound referrals or you're doing highly qualified live transfer, that's your primary intake. But generally it's a minority of the callers that are coming in that are going to be qualified for your law firm to handle. And there's really three buckets here. There's the callers that you want to assign in house yourself. There's going to be callers that call in and they just don't have a case, even if it is in your practice area. And then there's a pretty significant bucket for a lot of law firms that can be between 30, 50, even 70% of the cases that are coming in that need to be referred out to co counsel. So the first third party that you're dealing with here would be your co counsel, your referrals and sending out your leads that while they aren't a fit for your firm, they may be a fit for some other law firm. You want to get those referred out out on that first call as well. Instead of saying, hey, we can't help you, you're saying, hey, we can't help you with this, but we have a network of lawyers and we'd love to get this over to someone else and have them take a look at this. Is that, is that something that you'd be open to? 99 times out of 100 they're going to say, absolutely, that sounds fantastic. And then you get them referred out. If they qualify, you're, you're Signing that client on that first call, you're trying as quickly as possible verify damages and verify the claim. Once you know that your client wasn't the one at fault here, the police report and pre existing medical records, you're immediately starting the document gathering process and retrieval to verify the claim. Make sure that there's not anything that disqualifies it again. But you're doing that post getting the retainer because that document retrieval is not yet real time. There are companies that are working on making all of this a real time process so you can do even more qualification on that first call.
[00:07:11] But you've got them e signed to your retainer, you're starting to get medical records and police report retained. This starts to feed into your hard data and documents layer. So as soon as you start talking to someone, the first thing that you'll notice here is that we're feeding data into the practice management system for the law firm. Because you're trying to put everything related to that case into one place so that you have an understanding of the damages, the fact pattern, the liability. All of that needs to be stored correctly in one place. There's, there's companies that are working on various parts of this, but you're really trying to get as much data as you can about the case as quickly as possible. Good law firms are recording their case every single call. They're storing every text message, every email, every document in the same place. And what's really cool is that the beginning of 2025, there's really amazing platforms that are starting to take all of that information and then turn that into actionable data about the case as soon as you're having that first conversation. And that's really the best practice now. Whereas before it would take, you know, a long time to get all that information. A lot of the data isn't really actionable. With AI, you're able to action on all of that and understand the case faster and better than before.
[00:08:20] The next big thing that personal injury law firms are going to do is get that client treating for their injuries they're getting do a medical provider referral. There's a number of ways that this is done. A lot of law firms that I've seen, they have pre existing relationships with a network of medical providers. So this is all preset. They already know exactly who they're going to refer their clients to. It's a pipeline and they've established this. Good law firms will go every single area that they want to have a practice. If you're moving into let's say Georgia. Before you do any marketing, you'll already know who your medical providers are because it's such a key part of the process to get that referral done in real time. Law firms are looking for medical providers that are willing to work with personal injury law firms on a lien basis and provide that treatment upfront and get paid on a lien. So there's, there's a qualification criteria for good medical providers for personal injury law firms. There's. There's companies that have built out these networks. I don't think there's anyone that I've seen that's national, but some of them are approaching 30, 35, 40 states where they've got a network of these medical providers. And their goal is to go and partner with law firms to provide that referral service scale so that lawyers don't have to go find it for themselves. So you're getting the medical treatment taken care of really quickly. Then you're moving into medical management.
[00:09:40] Law firms have different approaches to this. There are different ways that law firms approach this from an ethical perspective, from a liability perspective, from a best standard of care for their client. Some law reviewers will say, hey, I'm going to refer the client over to a medical provider and that's it. The medical provider is the expert over here. And we aren't going to dictate or make any kind of suggestion about what should or shouldn't be happening in terms of medical care. That's one end of the spectrum. The other end is law firms are saying, hey, there are certain things that need to be done from a medical perspective, and those are non negotiables when you have a certain threshold of injury. So it's an MRI being done, Are you treating for pain, et cetera, et cetera. There are a lot of law firms that will take an active approach to seeing that those checkpoints are being met along the way when there's a certain level of injury. So there's a bit of a spectrum here. Some lawyers will say, hey, no, that's totally out of bounds. Other lawyers will say, if these things aren't happening, then the client is not getting the treatment that we all know that they need. So we're going to have this as part of our SOP to make sure that this is happening for our clients. Right. There's differing perspectives here, but no matter what, they're going to refer to a medical provider. Good law firms are tracking medical management, and some law firms are taking more of a prescriptive approach to, you know, what that medical management looks like to some degree. What's coming out of that is you've got medical records and bills. Obviously you need to make sure that the damages are being tracked and accounted for. You've got a client pain journal, which is something that I'm seeing as a best practice in the industry.
[00:11:23] The client themselves is creating a log on a daily or weekly basis about their pain, their pain management. It just provides a better trail of how this accident has impacted their life. You've got medical bills and you've got treatment notes. All of this information here is going to be stored inside the law firm and that goes into the damages model. And we'll get to kind of the next step from there here in a second. Other things that are happening is you need insurance coverage verification unless you're going for excess damages, which means that you're going to ignore what the insurance coverage was and you're going to sue for a larger amount if it was a catastrophic claim.
[00:12:02] The basic way that the value of a case is calculated is the lesser of the actual damages or the insurance coverage cap. And there's, there's a ceiling and it's going to be one of those two things, whichever is less. Understanding the insurance coverage is really important to the early stages of the case to understand how much coverage is available and how large those damages are in relation to the coverage. So that can be pulled. There's actually services that will go and find that if that's not readily available, then that goes into the document section.
[00:12:36] This can take a while, right? So just from a timeline perspective, all of this here up to getting the medical provider referral done can happen in a matter of hours or just a couple of days. But there's like a lot of work right at the beginning. Then from there there's, there's medical management happening and that can slow down dramatically until that treatment is done. With that said, once treatment's wrapping up, you take all of that information and create a demand packet that's taking all of the data that we've gotten before here and then turning this, that into a demand, a mini page long document that is sent to the insurance provider saying here's all the damages, here's everything that we know about the case and here's the amount of money that we're requesting. So that's the first time that you're now entering into a negotiation with the insurance carrier. And that could either be a policy limit demand, which we're saying, hey, we believe we know how much coverage there is. We're asking for the full amount of that coverage and you're going to do two things. You're going to affirm that this is the amount of coverage in the case, that there's no other policies out there. And if the damages are high enough, the insurance carrier may say yes to that or they may come back with a counter. What's happening here is the demand packet is created and more and more that's being done with AI because it's a lot of data. It needs to get packaged up into a pretty formulaic letter. And the name of the game there is just to make sure you're dotting your I's, crossing your T's, and all of the relevant data is included. That's generally going to be created, at least in a volume firm, by a non attorney attorney has to sign off on that. Client has to sign off as well, and then that's sent to the claims adjuster for negotiations. So now you're talking to the claims adjuster about all of that.
[00:14:20] You're negotiating, you're going back and forth. You definitely want email voice transcriptions about all of that. And then if the insurance company's coming back with additional information or you're learning something that needs to go back into your valuation model to update. There's two ultimate outcomes there.
[00:14:37] And this is all pre litigation. So the case hasn't necessarily been filed yet is you're going to come to a resolution with the insurance carrier. That's it, you've agreed to the amount and you move on to the resolution or you can't agree and there's a case filed. One of the big changes that I've seen and heard about recently is that law firms are pushing much, much faster and much harder to file cases. So they may be filing cases if the damages are high enough.
[00:15:05] They're filing those cases even before they're really moving into negotiation. Now there's obviously some good faith there. So you're sending a demand, but very quickly moving to file the case in court to show how serious you are and that you're about your best alternative to a negotiated agreement with the insurance carriers. You're taking them to court, especially when the damages are there. Now that doesn't necessarily make sense.
[00:15:28] I've talked to law firms where they were filing 10% of their cases and they've now, even in the past two years, that number has gone from up to 60, 75% of their cases are being filed in court just to really push to show the insurance carriers, hey, we're not Just here to play around and get a deal done. We're here to get the most for our client. That's an industry wide change that's happening. The economic drivers that we're seeing there is that the cost of case acquisition is increasing. There's for reform in some places. And so the average value of the case really matters. Pushing to maximize the value of the claim for every single client. So let's say that you do get to resolution, there's attorney sign off on that and the client has to approve the settlement as well. And then if that doesn't happen, you're moving into litigation. And we're not going to get into that in detail here. That's an entire workflow unto itself where you're going into court system. But ultimately you're going to end up with either with one of three things. You're going to have a jury verdict or judgment. A pretrial settlement which happens a lot of the time on the steps of the courthouse is a real thing. A lot of cases settle right before trial or there's a loss and nothing comes out of it after that. The settlement trust is funded and so that's checks coming into the law firm to the trust account and then it's dispersed to any of the parties that are involved. Liens on the case are resolved. So that medical treatment if it's being done on a lien basis, which means that the medical provider is essentially going out of pocket on it and they get paid at the end of the case that's resolved. So that's negotiated and the medical provider paid out and then the client and other fee disbursements are made. The law firm gets paid at the very end. That's the last thing to happen. Once everything else is resolved, client gets paid and co counsel, should that be the case resolutions happening there with the medical providers.
[00:17:17] We'll take a step back here and look at the entire journey from start to finish. But any questions or thoughts on on that? I know that was a lot of information to dump on you all at the same time. But that's the process for pre litigation. Firm can talk about how litigation works later on if that's interesting to folks. But I think it's really important to understand how a personal injury law firm starts in that journey of a client from start to finish.
