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The Top 5 Law Department Metrics for Insurers [Infographic]

The Top 5 Law Department Metrics for Insurers [Infographic]-header

Law departments within insurance companies demonstrate a high level of sophistication in corporate legal maturity.  Consider the following:

  • Legal costs are lower. Median partner billing rates are the lowest among the practice areas tracked by the CounselLink® team.
  • Rates tend to be stable. Legal rates in insurance work also have the least volatility with a score of 2 out of a possible 10.
  • Highest AFA utilization. Legal departments in insurance have the highest AFA utilization rates – 15.6% of matters structured under alternative fees.

These data points stem from the most recent Enterprise Legal Management Trends Report (Mid-Year Update 2015), which is based on invoices processed.  However, to gain a better understanding of operations within insurance – and specifically legal departments within Property & Casualty (P&C) carriers – we surveyed 94 organizations to identify:

  • What legal department metrics are being used?
  • Which metrics are most effective?
  • What cost control initiatives are being implemented in the New Year?

Top 5 Legal Department Metrics 

The top legal department metrics – those metrics law departments identified as most effective for insurance carriers are:

  1. Average total cost of case (loss + legal costs): 84% use it and 72% rate it effective.
  2. Legal expense per case: 82% use it and 65% rate it effective.
  3. Cycle time (days to resolution): 82% use it and 62% rate effective.
  4. Loss per litigated case: 77% use it and 60% rate it effective.
  5. Allocated loss adjustment expense (ALAE) as % loss ratio: 71% use it and 60% rate it effective.

These results have been rendered in a visual format in the infographic nearby and are this week’s Friday Share.  In addition, we’ve published a summary of the findings here and the complete report can be downloaded freely with registration:  U.S. P&C Law Departments Rate the Metrics They Use to Manage Costs and Performance.

Infographic: Law Departments Rate Metrics to Managed Costs

click here or image for higher resolution

Law Departments Rate Metrics Used to Managed Costs-small

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9 Neatly Organized LexisNexis Reports and Studies from 2015

Photo credit:  Flickr, Martin Fisch, give me five (CC BY-SA 2.0)

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About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.

Shame that the numbers predominate. As Tom Peters and others have said, "Hard is Soft. Soft is Hard." Therefore, I long for the day that firms measure something more profound, i.e. wellbeing, client engagement, the WOW factor. I think you get my drift.