The Lowdown on Why Independent Counsel Perform So Much Unnecessary Research

In a prior blog piece on “unnecessary research,” I noted that it is one of the more common issues I come across when reviewing legal bills from “independent counsel.”  I had several people contact me off-line to discuss this issue.  In particular, they were interested in knowing more about why this is a particular issue with independent counsel bills and not panel counsel bills.

I noted that one reason for the unnecessary research observed so much in independent counsel bills is that many independent counsel are from BIG law firms.  As has been my experience and observation over the years, all BIG law firms tend to have the same M.O. when handling any type of legal matter.  That is, among other things, they always assign young, less experienced lawyers to research whatever the issues are – even spending inordinate amounts of time researching the very issues the handling partner may claim to be an expert in.  Thus the research is not to educate the partner on the law, but to educate his helpers.

Another reason for the unnecessary research from independent counsel is that some think as independent counsel they are free to do as they please and the insurer will pay for it. They think and act as though they were handed a blank check along with the approval to act as independent counsel for an insured.  But as I so often do when reviewing independent counsel legal bills, I “educate” independent counsel on the fact that the law is very clear on the point that they can only bill for what is “reasonable” to do and, of course, doing “unnecessary” research is by its very definition not reasonable.

The third reason I have observed has to do with the fact that in many instances an independent counsel is not chosen by an insured for their substantive knowledge of the particular area of the law that is at issue in the suit, but more for their personal or other business tie-in with an insured.  And while there is certainly nothing wrong with an insured choosing an attorney who is a friend or is someone the insured has done business with before, there is something wrong when the chosen attorney does not have the experience (i.e, the competency) to handle the case. This invariably leads to the independent counsel having to bill for research to get up to speed to handle the matter.

The above situation occurs when the insured’s chosen counsel is not fully vetted as to whether or not the counsel has sufficient experience to handle the case.  And insisting that a proposed independent counsel be experienced or competent enough to handle a case is certainly well within an insurer’s right to do so.  In fact, the insurer’s right to insist upon this experience is embodied in the California Cumis Counsel statute, Cal. Civ. Code Sec. 2860(c) which provides that:

“When the insured has selected independent counsel . . . the insurer may exercise its right to require that the counsel selected by the insured possess certain minimum qualifications which may include that the selected counsel have (1) at least five years of civil litigation practice which includes substantial defense experience in the subject at issue in the litigation.” (emphasis supplied)

And as long as I am pointing fingers, I may as well point one at some insurers’ coverage counsel who either give too conservative advice or worse, incorrectly advise an insurer about the insurer’s rights to challenge an insured’s chosen counsel’s qualifications.  And it has been my experience that an independent counsel who lacks the experience or competency in handling the subject matter at issue invariably creates other billing issues that go well beyond the unnecessary research issue.

One final comment on unnecessary research.  Spotting unnecessary research or spotting any of the other issues related to independent counsel billing is not something that can easily be done using an e-billing program. While I have found e-billing programs may be good for reviewing very large volumes of similar legal bills (such as panel counsel bills), I also have found that e-billing programs are definitely not something to use when reviewing independent counsel legal bills. You should only review independent counsel legal bills the “old fashioned way” which is by carefully reading each word in every billing entry.

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