“Participation by too many lawyers is another form of over lawyering that can result in a violation of Rule 1.5(a).” ABA Annotated Model Rules of Prof. Conduct (7th ed. 2011).
Experience in working with independent counsel for over two decades has taught me that many too often think that they have been given a blank check to defend the insured. Thus, many independent counsel firms think that they can with impunity have as many attorneys as they want work on a case. As a result, over staffing a case is one of the most common issues I encounter when reviewing independent counsel legal bills.
How to determine what is appropriate staffing for a case or when is it appropriate to add staff to a case are issues I cover in my seminar How to Review Legal Bills Like a Pro©. But for now, the main thing to keep in mind is that independent counsel’s duties with regard to staffing a case are no different that than those of non-independent counsel.
The Rules of Prof. Conduct and well settled case law require that all attorneys staff cases appropriately or reasonably. And as I have stated before, the ABA Model Rules apply to all lawyers equally with absolutely no exceptions. So if a case is being over staffed, it should make no difference if it is an independent counsel case or a panel counsel case.
But what about the argument from an independent counsel that having two partners and four associates involved in a case will allow for the “best defense possible.” Does that change things? No, because an insurer has no legal obligation to provide an insured with the “best defense possible.”
Consider that if an insurer had an obligation to provide the best defense possible, it would logically flow that good local attorneys would never do. This is because an insurer would be obligated to hire only the very best attorneys with national reputations in order to provide an insured with the best defense possible (in addition to only hiring the very best experts that money can buy).
Fortunately, any appellate court that has ever considered the issue of an insurer’s defense obligation has held that an insurer’s duty is limited to paying “reasonable defense costs.” See, e.g., Boyd Bros. v. Fireman’s Fund, 729 F.2d 1407 (11th cir. 1984). And reasonable defense costs assumes that the case is reasonably staffed. So if having additional partners and associates in a panel counsel case would not be “reasonable,” the same also would be true in an independent counsel case.
Controlling an independent counsel’s over staffing a case can sometimes be difficult to do given that many independent counsel will fight insurers on this issue. But insurers need to stand firm and not adopt the “deer in the headlights” look when dealing with independent counsel. Insurers must be willing to review independent counsel legal bills rigorously to ensure that they are following applicable ethical rules and settled case law when it comes to billing for fees and costs.
Because of my expertise in reviewing independent counsel legal bills, many insurers – even those with their own legal bill review units or who use one of the “legal bill review factories” – have called upon me to review their troublesome non-panel or independent counsel legal bills. For review of non-panel or independent legal bills, please contact me at firstname.lastname@example.org.