So, You Want to Do Insurance Defense Work?

So, You Want to Do Insurance Defense Work?

If you are still reading this blog post after reading the title, then you have either done work for or are interested in doing work for an insurance company. Like any area of law, there are many factors that go into being a successful insurance defense lawyer but today I am focusing on just one: complying with billing guidelines. More specifically, I will be discussing ALPS’ billing guidelines although, in my experience, other insurance carriers have their own guidelines for defense counsel billing so while I will only be referring to ALPS’ guidelines the discussion is generally applicable to all insurance defense work.

After hiring an attorney to defend a legal malpractice claim, an ALPS Claims Attorney will send defense counsel an engagement letter with its billing guidelines. While it might not be evident when going through the guidelines, ALPS has made a point of keeping these guidelines as streamlined as possible because we understand that defense counsel have a big task in defending legal malpractice claims and we want counsel to focus their efforts on defense work rather than billing guidelines. Yet while the feedback on ALPS’ billing guidelines has been positive, it is undeniable that complying with an insurance carriers’ billing requirements is an extra hurdle not faced by an attorney who bills a private client.

Given that, I think a natural question is: why have billing guidelines at all? A fair question which can be answered with two points. First, unlike most private clients, the insurance industry is highly regulated at the state and federal level and some of the guidelines (like requiring supporting invoices for expenses over $50) are meant to comply with reporting requirements. Secondly, it is a matter of efficiency.

ALPS is proud of the fact that it is the nation’s largest direct lawyers’ malpractice insurance writer. In comparison to other insurance carriers, however, it is a relatively small company. Nevertheless, in a given month ALPS processes around 400 invoices from defense counsel which are reviewed by Claims Attorneys handling the respective claims. Unlike other carriers, ALPS is able to do this – rather than relying on third-party bill reviewers – because we have devised a billing procedure that allows us to efficiently enter, review, and pay invoices.

The key to that procedure is complying with the billing guidelines.  That is not to say, unfortunately, that the process goes smoothly 100% of the time. Every month there are invoices submitted that are not in compliance with the guidelines. For example, the invoice is not emailed to the proper address or is in an improper format, is missing the claim number, or does not include required receipts. To defense counsel, these may seem like trivial things but when ALPS is trying to process hundreds of invoices each month each error slows up the process which, in turn, slows up payment of the invoice.

Like ALPS, defense counsel are operating a business and like any business, its profitability and ability to maintain operations requires timely payment. Understanding this, we try to process invoices as efficiently as possible but this can only happen if the billing guidelines are followed. Beyond that, compliance with the billing guidelines demonstrates to ALPS that defense counsel is not only interested in continuing to be hired by ALPS but that they are running an office that is capable of paying attention to details. To the contrary, when defense counsel continues to ignore requests to comply with the billing guidelines it is a strong indication that he or she has little interest in being hired again.

I think it is fair to say that insurance defense work is not for everyone and that while there are many advantages, those advantages do come with certain “strings.” As one of the Claims Attorneys who helped draft the billing guidelines, I will be the first to admit that they are not perfect, but they are a good compromise between freeing up defense counsel to defend ALPS’ insureds while creating a framework that allows us to efficiently process hundreds of invoice a month. In summary, compliance with the guidelines allows us to pay timely pay invoices which, in turn, allows our business (and defense counsel’s business) to run smoothly and creates a lasting relationship between ALPS and its defense counsel.

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John Ries is a graduate of the University of Montana School of Law and Northwestern School of Law at Lewis & Clark College. John has been a Claims Attorney for ALPS since 2009. Prior to coming to ALPS, John served as a Deputy District Attorney for Union County, Oregon, and an Associate Attorney at Stamper Rubens, PS, in Spokane, Washington.