Training the Staff to Do Legal Bill Reviews – Part II

This is another in a series of posts I started on January 23, 2011, on the three options that an insurer has when it comes to eliminating the leakage in outside legal expenses.  To recap, those three options are:  establish a dedicated legal bill review unit, train (and monitor) all litigated file handlers on how to properly review legal bills, or outsource the review of legal bills.

In my post on February 6, I discussed the first option, establishing a dedicated legal bill review unit.  The take-away on this option is that it is really the better option provided that an insurer has a large enough legal bill volume to justify a staff of at least 3 FTEs.  My post on March 15 was the first of a two-part post on the second option: training (and monitoring) all litigated file handlers on how to properly review legal bills.

If you read my March 15 post, you might have come away with the impression that you definitely would be swimming upstream with little chance of success if you chose the option of training your entire litigated file handling staff to properly review legal bills.  But I ended my post on a hopeful note that there was an exception to the general rule that it is a waste of time and money to train (and monitor) the entire staff on how to properly review legal bills.

That exception is that the staff to be trained has to be small.  By small, I mean no more than five FTEs.  That is, you have little chance of establishing a successful legal bill review program for your claims department with more than five litigated file handlers doing the legal bill reviews.  In fact, I have yet to see an insurer have a successful legal bill review program where more than five litigated file handlers were doing legal bill reviews.  If you think that your department may be an exception to the exception, I would ask how you know this to be the case?   Have you have had your department’s legal bill review results independently verified?

One of the chief reasons for having as small group as possible doing legal bill reviews is that the more people involved, the less and less likely it is that all legal bill reviews will be done consistently.  Consistency in reviewing legal bills is absolutely essential.  Consistency is much easier to manage with a smaller than a larger group of people.

Also consider there are inherent difficulties in managing a large group of people who have multiple priorities.  It should go without saying, the larger the group (as well as the larger the number of priorities), the more difficult the task of management becomes.  Contrast this situation with the management of a small, dedicated group such as a subro unit or a legal bill review unit.  Less likely for these people to become sidetracked with other priorities as they have only one priority.

Related to the issue of monitoring staff’s performance is the very important issue of controls that management puts in place.  As noted, litigated file handlers have multiple priorities.  This means that they also have multiple goals or objectives to meet for performance review purpose.  Whatever the size of the group, unless management is willing to build a specific legal bill review goal or objective into the file handler’s performance review, the legal bill review program will be doomed to failure as the file handlers will appropriately focus on only those things which count toward getting salary increases and bonuses.

Notice I said what is needed is a specific legal bill review goal or objective.  As I said in an earlier post, a general objective to “save on claim file expenses” is not at all the same thing.  Management must be willing to make legal bill review an absolute priority in a file handler’s job by establishing a specific legal bill review goal or objective in the file handler’s performance review objectives.  Otherwise, pursuing the staff training option as a way to control outside legal costs is a waste of time and money.

Provided that the staff size is small enough to adequately control and monitor for consistency on legal bill reviews and that appropriate goals and objectives have been built into the employee’s performance review, the next step is to properly train the staff how to review legal bills.

In my view, training needs to be more than a simple one-shot training session.  Otherwise, it quickly becomes the issue de jour in the staff’s mind and attention quickly falls off as the weeks go by.  For staff training to be effective, some preliminary groundwork needs to be laid as well as appropriate follow-up review and even re-training needs to be built into the program.  In other words, you need to think of staff training as just one step in a coordinated on-going program effort rather than as a one-shot type of effort.  I describe how such a coordinated program should be structured and implemented on my website at

Of course, when you have a robust legal bill review program whether it be with a dedicated legal bill review unit or with the entire staff reviewing legal bills, there are other things that insurers need in order to have a successful program.  One thing that is important to have is a good e-billing system.  I will go into depth on this subject in a future post.  In the meantime, if you want more information on how to decide if an e-billing system is right for your company, you can check out an article I wrote on “Evaluating E-Billing Systems” at or you can contact me for more information at

In a future post, I will discuss the third option an insurer has to eliminating leakage in claim legal expense:  outsourcing the legal bill review.  As many insurers have already found, outsourcing legal bill review can pay double dividends.   Outsourcing legal bill review can not only reduce claims legal expense, but it can also improve staff productivity.

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