Plaintiff Attorneys: The Hard-Market Saviors

Attorneys have been suffering a lot during this recession. One of the biggest law firms in the country failed a few months ago. Others across the country have been forced to merge just to survive. They cannot afford nearly as many square feet in their offices or their homes as they could a decade ago.

Similarly, the property/casualty insurance industry is just now partially realizing material rate increases for the first time in many, many years. Yet the lines most correlated with lawsuits remain the softest, casualty in general and medical malpractice in particular.

The key then to increasing rates in these lines is to help plaintiff attorneys sue more people. I see a win-win situation here: insurers get rates increase and plaintiff attorneys get out of their slump. There are a few ways to achieve this joint goal.

First, agencies and insurers could offer webinars on how attorneys could sue them more successfully. Suits could be settled faster and for more money. The process would be significantly more efficient. The result will be more profit for attorneys because they will spend less pursuing the suits and the settlements will be larger. With the extra profit, they can bring even more suits. Rates will then increase even faster. It’s a self-perpetuating model.

Second, agencies and companies could raise money for plaintiff attorneys — kind of a welfare program. After all, our government is doing its best to create attorney welfare-to-work programs through all the new regulations it is publishing that no one reads except out-of-work attorneys. If everyone paid the attorneys a stipend to just keep practicing law, more lawsuits would be filed. Theoretically, some would be won and then the stipends could cease. Government programs could then cease and we could prove private charity works. What a great publicity opportunity!

Third, agencies and companies could lobby Congress to publish even more laws. I estimate that for every page of law, there are between 40 and 100 pages of regulations. The opportunities to unknowingly violate at least a dozen different laws and regulations are fantastic. Since many laws and suits are now co-joined (for example, if one violates a privacy law, one may be prosecuted and civilly persecuted simultaneously), the continued eruption of volumes of rules would greatly enhance attorney business opportunities.

A fourth opportunity is to accept reality that a price can’t be put on loss. The reason is that everyone’s loss is different. One of the ways to improve the public perception of the industry is for it to no longer supports caps. It wants everyone to get everything and anything they deserve. This new attitude may help some politicians see the industry in a better light, too. The result would be rates skyrocketing quickly. Claims would follow later.

Risk management has maybe worked too well in suppressing large and frequent suits. Maybe it’s time to loosen up and leave that stodgy insurance culture behind!

Burand is the founder, owner and chief wit of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-485-3868. E-mail: chris@burand-associates.com.

Topics Lawsuits Legislation Pricing Trends Market