I am the managing partner of a 5 attorney general practice firm in Kansas City, Missouri. My book of business is down and I have been considering taking on insurance defense work. During the past year I had the opportunity of working as co-counsel on a couple of insurance defense matters and enjoyed the experience and the work. It seems to me that representing insurance companies would represent a steady flow of work. I would appreciate your thoughts.
Insurance defense work can be a blessing and a curse. Working for insurance companies often does result in a steady flow of work but at the following costs:
So, in exchange for a flow of cases you may be selling your freedom, independence, and your soul. It is hard to be successful if you dabble in insurance defense. You either need to be in or out and if you are in you would have to leverage the practice in order to be profitable at the lower billable rates. Be careful about relying on a large volume of work from one just one company. Consider diversifying your case portfolio to include a mix of higher stakes cases, if you are able, such as professional liability, products liability, medical malpractice, commercial litigation, and major construction defects.
Realize going in that insurance defense work is commodity work and insurance companies are shopping for the best deal and the best price – so is your competitive strategy to be a low cost provider?
John W. Olmstead, MBA, Ph.D, CMC