This is the second post in a series regarding personal injury settlement mill law firms. In the first post, I provided a general overview of how settlement mill law firms operate. Very generally speaking, settlement mills are personal injury law firms that advertise extensively and handle an enormous volume of claims per attorney (with an attorney to client ratio that makes it impossible for an attorney to perform any real legal work on the case).
Since there was so much interest in the topic of settlement mill firms (even leading one personal injury attorney from another state to call and thank me for educating the public), I wanted to dig a little deeper. As was true with first article, I am relying upon data collected by Stanford law professor Nora Engstrom.
Personal Injury Settlement Firms: Operating In The Shadows
For her research, Ms. Engstrom relied partly on disciplinary records, but also conducted phone interviews of attorneys and other staff working in large personal injury settlement mills. One former settlement mill attorney with whom she spoke observed:
In this article, I want to explain why and how Ms. Enstrom concluded that personal injury settlement mills escape various forms of traditional attorney scrutiny, which means that many of their activities are never reviewed or examined by those who might cause them to change.
The Press Turns A Blind Eye
First, the overwhelming majority of personal injury settlements handled by large mill firms involve non-catastrophic injuries, and so involve lower value cases. Typically, according to Ms. Engstrom’s research, large settlement mill firms rely almost exclusively on advertising to obtain thousands of “soft tissue” injury cases from car accidents (which means injuries that are relatively low in value). Since those often involve damages that are lower than $8,000, they are unlikely to attract the attention of the press. (Also, one of my attorney friends keenly observed that these firms spend so much on advertising that it would be hard to imagine press scrutiny even if otherwise justified.)
No Public Documents Or Court Scrutiny
Next, the huge national personal injury firms scrutinized by Ms. Engstrom rarely filed lawsuits. The method of handling cases in these firms is unlike anything I have ever encountered in working with large defense firms and/or working with smaller firms as both a law clerk and attorney. In conventional law firms, at least in my experience, attorneys primarily handle disputes by preparing and filing lawsuits. They then seek information that would help their clients case through a process called “discovery,” during which attorneys do all sorts of research into both the law and facts, such as talking to witnesses, and reviewing documents and other evidence. This helps them formulate an argument that can be useful in persuading the other side to settle and/or persuading a jury to award a higher verdict amount.
With settlement mill firms, however, their attorneys reported to Ms. Engstrom that they did very little if any of this work on the overwhelming majority of cases. Instead, attorneys from settlement mill firms made these statements:
Given this high volume of cases, the attorneys simply did not have nearly enough time to handle cases in the traditional way, so “processing” claims (as opposed to litigating them) were delegated to case managers, who generally collected medical records, negotiated claims, and convinced clients to accept highest and best offers before filing suit. Since they often do not file suit, few, if any, public documents reflect the work of high volume personal injury settlement mill law firms. For the same reason, the work product of settlement mill firms also seldom comes into contact with judges, who otherwise oversee many important aspects of the work of traditional attorneys.
Most Research Focuses On Data Obtained From Filed Lawsuits
Ms. Engstrom noted that most important studies of personal injury law firms, such as other law review articles, focus on data obtained from filed lawsuits. Her research was unique in this respect, since she reviewed disciplinary records (which only exist for those firms who have been caught breaking rules) and telephone interviews with guarantees of anonymity.
Code Of Silence
Attorneys working in these firms may not want to share how they handle cases because of concerns about ethical violations (which are rules that govern attorneys governed and enforced by various state bar associations, and which can lead to sanctions including disbarment). Additionally, Ms. Engstrom noted that these firms have a financial interest in protecting their methods of doing business, so that rival law firms cannot replicate their money-making methods. Further, at least one huge mill firm reportedly required their associates to sign “confidentiality” agreements as a condition of employment (which is highly unusual–I have never been asked to sign such a thing).
Fellow Attorneys Cannot See What Is Happening
There is an ethical canon that requires fellow attorneys to report ethical violations of other attorneys. In this sense, the practice of law is supposed to be “self-policing.” However, Ms. Engstrom’s research showed that most plaintiffs’ lawyers do not refer their cases to settlement mills. So those attorneys are not likely to be in a position to observe any problematic behavior (when working as a referring attorney, for example). Additionally, since most insurance companies only hire lawyers when lawsuits are filed, settlement mill negotiators typically deal with adjusters, rather than defense attorneys. Adjusters do not have the same ethical obligations–meaning they have no duty to expose any ethical violations they might encounter. So, yet again, no one who might know there is a problem, and care, is watching most of what happens in a settlement mill personal injury law firm.
Clients Have No Idea
Ms. Engstrom’s research revealed that most clients of these firms did not file bar grievances or malpractice complaints, possibly because, she surmised, they had no way of judging whether they might have obtained a higher recovery had they hired more conventional counsel. Additionally, many clients of settlement mills firms belong to historically disadvantaged cultural groups, who may never have had an attorney, so do not know what an attorney-client relationship should feel like.
Grievances Are Rarely Publicized
Bar grievances are rarely made public because only about 3% of grievances lead to formal charges. Additionally, many states predominately apply private discipline, which sometimes leads to confidential testimony, inaccessible to the masses.
This Isn’t Right!
Before I started handling personal injury cases, I had no idea that there were firms which handled volume claims without attorney involvement. Indeed, I cannot even imagine this sort of approach. In more conventional firms, attorneys handle cases, speak with clients, and keep their case volume to a level where they have time to devote to each and every case. Without attorney involvement, the value of a personal injury claim cannot possibly be maximized.