Episode 20 – Janey Nethery: Leading with the Client’s Perspective Top of Mind

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Janey Nethery

Janey Nethery

Executive Director, Michael Sullivan & Associates LLP

Janey Nethery worked in claims for years before joining Michael Sullivan & Associates as Executive Director. Her experience as a client of General Liability and Workers’ Compensation law firms has given her deep insight into what clients want, what it looks like when firms delight, and yet how easy it is to fail. In this conversation she shares quite a few examples that reveal just how hard firms have to work every day at every level to get it right.

Full Interview Transcript

Michael: My guest today is Janey Nethery, the Executive Director for Michael Sullivan & Associates. Before that, she was Vice President of Operations at Sedgwick CMS, where her responsibilities included hiring and managing law firms and attorneys. So I’m really interested in hearing her perspective both as a client and now also as an executive in a law firm. So thank you for joining me, Janey.

Janey: Thanks for having me.

Michael: Sure. So I think regular listeners of this podcast might recognize the firm, but for folks who don’t know, tell me a little bit about Michael Sullivan & Associates.

Janey: We’re a workers’ comp defense law firm, mid-sized, specializing in California workers’ comp. And along with having very distinctive, excellent lawyers, Michael Sullivan is also the author of “Sullivan on Comp,” which is a highly valued reference, treatise on workers’ comp, which is used by defense attorneys and adjusters. So yeah, that’s what the firm is. It has seven locations. We are new to northern California but growing rapidly and plan to have probably one or two more offices.

Michael: Okay. Let’s see, I think it’s worth mentioning, of course you know this, but I used to be in your role at Michael Sullivan & Associates. That familiarity will work its way into the conversation.

Janey: Yes.

Michael: Also, I wanted to ask you, again, for folks who don’t know, what is Sedgwick CMS?

Janey: Sedgwick CMS is actually the nation’s largest third party administrator for property casualty claims. Workers’ comp is one of the lines that they administrate claims for for self-insured entities and large deductible programs, so anything that would not fall under the direct administration or handling of an insurance carrier. We do handle or we…(laughing) I was there for so long, it’s so hard to stop saying “we.”

Michael: That’s okay. You know it’s funny, the description of a company comes from that place in a person’s brain where they are…It’s hard not to talk as though you’re back in that role.

Janey: It is. But Sedgwick also administrates claims for insurance carriers as well and acts their claims shop.

Michael: Right. Of course, for those of us who work in that world, we’re really familiar with third party administrators, TPAs, but there are lots of different practices out there. I like to think of the job of a TPA, it’s like if you took the claims department just out of an insurance company and made it its own company. Does that seems like a reasonably accurate description for an outsider to latch onto?

Janey: Yeah. As Sedgwick started, but I just…for Sedgwick’s sake, they have so many different products now, they’re so large. But, yes, that’s the main thing for today’s purposes is the claims administration piece without the underwriting of the risk.

Michael: Right. So as they started doing work for employers or companies that were relying on them for self-insured purposes, they got into underwriting as well?

Janey: No, no, I’m sorry. They do not underwrite. So that’s the difference, insurance companies underwrite the risk and then handle the claims. TPA handles the claims.

Michael: Got it. Okay. Tell me a little bit about the executive director role. Because certainly lots of listeners will be familiar with that, but at a smaller firm, they might not be able to see what that person would do yet. So I’m interested in getting that perspective.

Janey: Okay. Well, in a broad sense, my responsibilities are everything non-lawyer. I don’t manage the lawyers themselves. But IT, human resources, marketing, finance, all of the back shop, so to speak, falls under my responsibility, along with working with Mike on firm vision and direction on where we’re taking the firm, growth, goal setting, that kind of thing.

Michael: Okay. I’m curious, your thoughts on…you were relying on law firms as a client and…well it might be cool to just start there. Now on you’re on the other side of that transaction, so I’m interested in getting your perspective on both sides. I was thinking, why don’t we start first with the client side? What were your responsibilities relative to working with law firms?

Janey: Okay. Well, my final role at Sedgwick was a little more remote than what I had had in the past. But I would say throughout my career, when I was closer to the actual claims handling, it was working with the adjusters, the supervisors primarily, and then they would work with the adjusters to discuss law firms’ results, costs obviously, what the clients’ needs are, and what the best match is for the clients and the firms.

A lot of clients dictate themselves which firms they want to use, but they also will go to Sedgwick, or their TPA, or broker and ask for recommendations based on our experience. So we would do that. And then I also have experience on the insurance company side prior to Sedgwick, working on suggesting firms for panels and what that entailed in terms of performance of certain law firms.

Michael: Right. Especially for listeners who are maybe outside of the world of workers’ comp and outside of California, what is the role of an attorney on a workers’ comp claim? Because it seems kind of like somebody gets hurt, they file a claim, they get their benefits, and they’re done.

Janey: Yeah. That’s true for probably the majority of what happens, and there’s varying degrees of opinion on when it’s appropriate to bring a lawyer into the situation, into the mix. But really…I’m sorry, Mike. The question again?

Michael: Sure. Well, for folks who aren’t familiar with California claims, why are there even attorneys involved in handling workers’ compensation claims? And really from an employer’s perspective, what is it that they’re doing?

Janey: Okay. When issues cannot be resolved, such as extent of injury, or AOE/COE issues, or length of disability, or severity of disability, then the issues get litigated, and the injured worker will hire an attorney, an applicant attorney, and then once the litigation process starts, we need an attorney on the defense side to appear in order to argue those. I know that sounds really basic, but that’s generally what happens.

Michael: There are claims that stay outside of this realm of litigation, right?

Janey: I would say the majority of claims stay out. If the employer and the TPA or insurance company are working together, working well, then the litigation rate should be relatively low. It should be in the 10…well, 10 would be really nice, but 20, 30% of claims go into litigation.

Michael: I wanted to loop back to AOE/COE, just basically, was it really an injury, right?

Janey: Yeah. Was it out of and in the course of their employment, as a result of and in the course of their employment?

Michael: Right. Okay, that’s really helpful. Lots of claims are being handled right at the adjuster desk, everything is going fine, but some of the…either the bigger claims or suspicious claims or just when an injured worker goes out and hires an attorney and goes to court over any issue, then the employer’s hiring an attorney to do that to have the claim handled?

Janey: Yes.

Michael: Okay. Then in the world of TPAs, I think you were mentioning that the employer’s directing that decision about which attorneys to use, right?

Janey: They can. They don’t have to. They can rely on the TPA making the recommendation. But generally if somebody is self-insured or has a very large deductible program, they’re usually very interested because it’s their money, so they want to have some say-so in who is representing them and how much it’s costing.

Michael: My gosh, over the years, you’ve…how many firms do you think you’ve worked with?

Janey: Oh, my gosh.

Michael: All of them?

Janey: No, actually I don’t think it’s all of them because I’m so amazed at how many there really are. What’s odd about maybe my…I should be honest and say that my experience in handling claims actually started with general liability. So as an adjuster, I worked with a lot of GL firms. As a manager, it was workers’ comp. So it’s probably not as many as you think, one would think, as an adjuster handling workers’ comp claims would. But I would say almost all of the big firms, I’ve definitely worked with them and had interaction with them.

Michael: I’ve had the experience of coming in to see you when you were the client. I have to say that you commanded a lot of respect. We knew you, you were paying attention, you were looking at what we were doing, you expected a great job from us, you treated us with respect, but we understood we had to perform. I don’t know if you’ve ever received that feedback, but it was a little scary coming to see you sometimes because of that. Because you don’t want to mess up. You want to know that you’re doing a good job, and you want that meeting to reflect that. Because obviously in a context where you as client are directing a fair amount of business our way, that’s important to not mess it up.

Janey: Sure.

Michael: I’m curious, over the years, you must have seen some patterns, things you liked, things you didn’t like. And I’m really interested in hearing about some of that. What do you think the good firms do well, and what are some things that the not-so-good firms tend to consistently not do?

Janey: Well, I think the biggest thing is deliver on promises. That to me was most important. I’m flattered by the fact that you said I paid attention. I paid attention at certain times. I didn’t pay attention during the sales pitch because the sales pitch really wasn’t all that important. What was important was the results that the firm was getting. I would think what was so important to me was being honest at what they could do. If you’re going to commit to something, follow through and do it. And if you can’t do it, tell me as the client.

I would much rather hear, “That’s just not in our wheelhouse,” or, “We disagree with that philosophy.” Anything. I would much rather hear that. There are many firms that would come in and promise, “I can close X number of files in X numbers of days,” but then when we actually launched into the process, there was all kinds of excuses as to why it couldn’t happen. “We didn’t realize that this injury was that bad,” or, “We didn’t know these issues were taking place,” and there was a total loss of creativity when it came to following through. It was very frustrating.

The other thing I would say is communication. The partners would come in, they’d have a great idea, they would pitch the idea to us as the client, but when the files were sent to the firms, what I noticed was the associates, the lawyers at the associate level, didn’t have any of the information. They didn’t know what was expected of them. So it was very frustrating to have that lull where the partners had to go back and sort of do this, “Oh, yeah, I forgot to tell you we’re doing this, X.” So that would really frustrate me.

The other thing that we were highly sensitive to was excessive billing, and not so much the dollar amount of the time spent, although that’s important. What’s very frustrating is keeping a file open longer than it needed to for the opportunity to bill more. That is extremely frustrating. I would rather have paid perhaps a little bit more for the file to close a little faster than to pay the same amount of money over a stretched period of time because maybe the bills looked smaller. That was very, very frustrating.

Michael: Do you have any sense…and this is, of course, involving lots of different firms over many different years. Is it neglect or do you think you were picking up a feeling that it was sort of a willful strategy?

Janey: It was both, and some of it was fear, too. I think that there was a fear that if they closed that file, the revenue stream stopped. Perhaps what they didn’t realize is that it’s a direct correlation of whether or not you get another referral. But I think that most of the time it was neglect or fear. I think there was a small percentage where it was an actual strategy. At least that’s what I would like to think.

Michael: Yeah. One of the things that’s particular to workers’ comp law in California and maybe in other places, there’s sort of the primary case and there are bills and liens that need to be resolved. A lot of times the handling attorney likes to focus on the case in chief, and then the liens are not as sexy to work on. So that’s why I was asking about the neglect is it seems like it’s easy to let those things just sort of linger forever, unless you’re aggressively doing something about it.

Janey: I agree. I think a lot of it depends on philosophy of the clients. I think adjusters…liens were always a real annoyance to me. I’ve always felt like that was something that should have been taken care of along the settlement process of the case, waited to the very end. I think adjusters play a big role in that. But I agree with you, the case in chief gets settled, and then there’s these lien claimants, and nobody likes to talk to them. They’re a specialized type of claim. I have great respect for hearing reps that deal with them. But the impact to it is the examiners can’t close the files, and the clients can’t take down the reserves. So they stay open, and they just become the gnat that’s buzzing around your head, that’s bugging everybody.

Michael: Yes. You know what? I’m glad you brought up the concept of reserves too, because that’s a really big part of your world, and the attorneys really don’t see that at all. I wonder, does that affect the service you get? Did you perceive that some firms took the time to understand the rest of the picture as it were?

Janey: Right. Well, I think as an assumption at some adjuster’s level or in the insurance company, TPA world that the attorneys are well versed in the whole world of workers’ comp, and some are, there’s no question about it. But not everybody is. There’s an assumption that the lawyer is the workers’ comp expert, as opposed to understanding that the lawyer is the workers’ comp legal expert.

I did notice that when an attorney took the time to learn of the claims world and the legal world and connected it together, the result was much better than just an attorney who only knew the law and didn’t have a correlation to what was going on in claims or in the world of workers’ comp prior to litigation.

Michael: Can you think of an example where, something that you used to face in your day-to-day life that attorneys didn’t really…if they didn’t understand, it might have a big impact on the type of advice they would give you?

Janey: Well, let’s take the denial process or whether or not to accept or deny a claim. If you have a legitimate case, and in fact in saying that, let me back up a little bit. I would say almost every employer, with very small exception, wants to pay the claims they owe, but not pay the claims they don’t owe. The best way to get a good financial result on a claim you don’t owe is keeping it out of the system. Once it’s in, it’s in, it never comes out.

So there was a disconnect in a lot of attorneys that I would talk to of the importance of that very, very first decision, the decision to accept, delay or deny. Delay is dating me because the laws have changed. So that decision is critical. It’s probably the single most important decision you’re going to make in a claim. So I would get frustrated with the exchange as opposed to, “Well, the legal position on your denial is X,” but there was a strategic component to that as well for claims that really were not legitimate and were not owed.

Michael: Right, that if an attorney wasn’t mindful of that, they could basically strongly advise the adjuster to do what you would consider the wrong thing in that circumstance?

Janey: Or not the best thing, yeah. Not the best thing for everybody involved. Because this may sound like a weird statement, but it doesn’t do the injured worker any good to get into the work comp system when they didn’t belong there. They end up getting treatment they don’t need, they end up getting medications they don’t need. It can really be impactful to a person’s life if they get hooked up in all that stuff.

Michael: Yeah, I mean we could tell claims war stories of people getting back surgery that messed them up for life and all sorts of weird stuff, who really didn’t even have legitimate injuries.

Janey: Yeah, and they didn’t really understand what was happening to them.

Michael: Yeah, what they were doing. Now, what about the attorneys that consistently did a good job for you? What were some of the things that you saw them doing, presumably the opposite of what you just said were bad? Were there other things as well?

Janey: I think our interests were aligned. They weren’t worried about, “Where is my next file?” They were worried about, “How do we get the best result on this file?” They had a legitimate…or not legitimate, an actual passion for their job and what they were doing, and they were diligent. They followed through on what they said they were going to do and understood the value of a resolved claim or the value of a good defense. That’s an art, to be able to decide, “Is this really a case that we want to litigate to its fullest?”

That’s another thing that used to make me crazy is the attorney would be, “Let’s fight, fight, fight. We’re going to take this to trial,” and then a week before trial, “This is a loser. We got to dump it. Let’s settle it,” and we had spent all that time and money prepping for trial, doing all the discovery, only to settle what we could have settled six months ago.

Michael: Okay. Now, what’s your sense of what’s going on there? I know sometimes what happens is that it starts out one attorney, maybe that attorney leaves the firm, and a new person has a different take on it. But have you seen an attorney take it all the way through and change their tune at the end?

Janey: Oh, yeah.

Michael: And so what’s going on there? Is that that they’re getting cold feet? Is this the first time they’ve really read the file? What’s happening do you think?

Janey: I guess I couldn’t say for certain. I have seen many different things. A lot of times I was completely baffled by it. I would not know why. But I think most of the time that happens, it’s not just the attorney, it’s the adjuster and the attorney not paying attention along the way, not having the discussions about the file at the right time, and not reading and always looking at the position that the claim is in, and isn’t it time to settle? Isn’t it time to resolve? At every step of the way.

If you’re just on a path of discovery or the adjuster’s just on a path of letting the file get through the system, then they’re not serious about resolving it until everything is in, everything is done, and then it’s been far too long. Most cases settle. So the attorneys that are paying attention along the way and bringing settlement opportunities, that’s a huge value added to the client.

Michael: Is that mindset thing? Is it knowledge, skill? What is it do you think that separates the attorneys who are doing that and the ones who are failing?

Janey: I think experience. You get a sense for when a case should resolve. New adjusters, it’s the same thing as new attorneys, may not see the opportunity. Having a sense of timing. There’s another element to this whole process, and that’s the applicant attorneys. They have to make a certain amount of money. That’s just the reality of things. So understanding that world and trying to mitigate that as much as possible.

I guess I would have to say that the attorneys that are truly engaged into the process, and that’s a very overused term, and I apologize for using it, but it’s accurate. They’re reading their mail, they’re not just reading, they’re looking at the file, not just all the stuff that came in that day. Did you understand what I mean by the different…?

Michael: Right, so each time they get a piece of mail, they’re thinking about their understanding of the case and what’s the impact here.

Janey: Right.

Michael: But the other side of that coin, the day-to-day reality of a workers’ comp attorney or a workers’ comp adjuster is there’s a lot going on. So the question for the leader in that environment is to figure out what are the policies, procedures, and top level decisions we want to make that enable that attorney to understand that that’s the goal, and then number two, to be able to fulfill on. Those are the challenges.

Let me ask you, as you think about it with your law firm leader hat on, is there an understanding that you have now about, “Well, the only way an attorney could possibly do that is if we created those conditions.” Like what might those conditions be? The one that comes to mind for me is, like if you give them 200 files, they’re not going to be proactive on any of them, right? So other things like that come to mind?

Janey: Yeah, there’s definitely a good number for a case load, where it allows the attorney to think. It allows them time to process and come up with a strategy, when the case is in litigation. And if they have too many files, they just can’t do that. There’s no question about that. I think, too, that encouraging them to talk to the examiners, I think a lot of attorneys do a great job with that, but other attorneys find it an annoyance. They don’t necessarily appreciate the value in partnering with the examiner.

Yes, they’re the expert on the law, but the examiner really knows claims and they know the environment that the client has created and what the client wants. I also think that attorneys that get to know the clients and what their goals are really help in allowing them to succeed in their workload and resolve cases to the client’s satisfaction. I noticed the attorneys that pay attention and talk to their clients and learn about their clients have a greater success.

Michael: Can you think of some examples? Just from things you’ve seen over the years, what are some things that one client might want an X and the other client would want Y on that same exact thing? Any examples come to mind?

Janey: I think the example to litigate, whether or not to litigate a case. There are some clients that believe that they have to fight every case because if they don’t fight every case, they’ll create an environment in their workplace where people will see workers’ comp as an opportunity to make money, and their claim count will go up, and so they have to fight them. Others feel as if they’re fair and they accept the claims that they owe, people will respect and just go through the process and get better and not hire a lawyers, and it stays out of the system altogether. So the very same slip and fall injury one employer could say, “Fight it. Litigate it.” The other one could say, “I don’t know. Just pay it. Settle it. Close it.” And those facts could be exactly the same.

Michael: Right. So if you’re the TPA or the law firm that’s sort of gotten involved in that matter, you’re handing it with the wrong philosophy, then you’re pissing off the client.

Janey: Absolutely.

Michael: Even if you’re thinking you’re doing a good thing.

Janey: Exactly. If you’re pulling out all the stops on discovery and all the client wants is just get this for the fair value, injured worker’s entitled to it, just pay them fairly and quickly, but it’s being over litigated, that will make them mad. If you take the other approach and you settle a case that somebody gets big money and the philosophy of the employer is, “I don’t want a litigious workforce. I don’t want claims settled unless I say it’s okay,” and you go ahead and do it, then they will be very angry because they believe that that information will get out in their workforce and they’ll have another problem.

Michael: Right. So you would think, as we talk about it, that that’s pretty obvious and that’s the way people handle themselves. But I don’t know. Do you have a sense of the percentage of the time where you see those kinds of things happening?

Janey: In terms of…?

Michael: Where there’s a lack of alignment between the philosophy, between all the players, employer, TPA, and law firm?

Janey: I don’t think that happens a lot. Where I’ve seen that happen is when the…and I would just speak the lawyer side. Because the bulk of my experience is on the client side, so I have more opportunities for stories on the client side. I think when the lawyer gets hung up in being the lawyer as opposed to being a partner in the resolution of this matter, that’s where communication could kind of fall apart. If they’re overzealous and they’re like, “No, I want to take this case to trial,” and they’re just not listening.

Some employers, they know they could probably win, but at the end of everything, it’s going to be so expensive to litigate it that they’d rather just cut their losses now and settle it. That seems to be when it drives the lawyer the most nuts, is because that’s their craft, and that’s what they want to do. The lawyer that can set that aside and understand the business side of that and the financial wisdom in that will get a better result with that client, as opposed to one that’s trying to constantly talk them into spending more when they just don’t have an appetite for it.

Michael: Yeah, that makes sense. Well, I wonder if you have a really good story, just an exceptional experience that you’ve ever had with an attorney or a law firm that just comes to mind as an example of, “Now, that’s how we want firms to act.”

Janey: Sure.

Michael: You don’t have to name names, so we’ll keep it…

Janey: Okay, good. It was an interesting time. It was right after SB 899 passed. We had a very large client, and we realized that there was a great opportunity, there was a window to resolve cases at a fair price, and they had a very large old inventory, and there was a lot of files, well over a thousand files that fit this category or this type of opportunity. So we contacted three firms and we had a strategy. The heads of the firms came in, and we outlined what we wanted to do, and all the firms stepped up to the plate.

They actually put resources, their own staff of attorneys and hearing reps in our offices, and we had this massive settlement project. It was all homegrown. It was the adjusters, and the lawyers, and the hearing reps working together, and it was over a set time frame. The results were outstanding because everybody was working all in the same direction. It actually was kind of exciting for everyone to see the results. But what was really nice is at the end of the project, the client saved so much money on reserve reduction because of all the files that were closed, they actually held a gratitude luncheon for the examiners and explained that they actually changed the finances of this very large organization because of their efforts. That was awesome to me.

So we went and explained the lawyers’ participation, and it created some long term relationships for those firms. But was truly a value added…that put money back to their business that helped them decide on opening new locations or not. It was really great.

Michael: Yeah, that sounds really cool. Those firms understood the importance of that and they found a way to step up in a big way.

Janey: And out of their norm. This was not normal for them. This was not something that they’ve done in the past, but everybody just threw away…egos were checked on both sides, and all ideas were accepted, and we came up with a really strong strategy together that worked for everybody.

Michael: Great. I’m also interested in getting a sense of your transition to working at a law firm. What were some of the things that were maybe different or just otherwise than what you would have expected? Or was it pretty much kind of what you thought it would be?

Janey: Well, the way I came to this position and some of this, I’ve known Mike Sullivan for a long time, and it wasn’t something that I was setting out to do. It kind of just developed. I knew the firm really well. But I think what I was probably most surprised at is there’s always this tension around bill, legal bills. There’s the clients worry about the legal bills, the TPAs and insurance companies worry about the legal bills as do the firms.

Billing is probably the one of the biggest reasons why relationships fail. What I didn’t have a good understanding for was some of the…from a client’s perspective, some of the self-inflicting pain we were putting on ourselves by the way we were approaching the attorney’s billing. So over-focused on maybe line items, over-focused on hourly rate, over-focused on certain aspects of billing that are control mechanisms, but they’re creating a lot of pain for everybody. So that was kind of interesting. I didn’t really understand necessarily that piece of it. It’s pretty complicated issue.

Michael: I think any listener who has an insurance defense firm knows that whole world pretty well. But it involves lots of back and forth communication between the admin function and the firm and the attorneys and then between the admins and the billing folks at the TPA or the insurance company.

Janey: Right. The unique relationships that get formed because of bill review companies. Let’s face it, everybody is in this business, we’re here to make money, right?

Michael: Right.

Janey: It shouldn’t be that it’s a ridiculous amount of money. And so it kind of creates an adversarial situation. It’s kind of weird, you want to partner with your attorney, and the adjuster and the attorney are handling the claim appropriately, and then all of a sudden this weird shift in the relationship comes in the billing. And so it sort of creates a schizophrenic relationship. It might be little dramatic, but in that you have to partner, partner, partner, then boom, now I have to look at your bill, and I have to call you out on all the things I see wrong. It’s just odd.

Michael: Right. There are mandates in place. You mentioned the bill review companies. It’s sort of an acknowledged thing that exists out there. If there’s a bill review company, they’re getting paid out of the attorney’s bill. So they have to cut bills no matter how good the billing is on the way in. So you could say that that sort of creates an incentive for a law firm to put things in there that they know are going to get cut because cuts are part of the process. I think that’s what you’re talking about there, the schizophrenic scenario. Why are we behaving this way?

Janey: Why are we doing this? Exactly. There just has to be a better way. I don’t know what it is. I would agree with a lot of people’s opinion that true, true flat rate is probably not the answer. But this line item, billing, the amount of…when I stood back and looked at the amount of money that’s going into just processing a line item legal bill, it’s probably true for other things, but it’s a lot of money going into that on both sides of the house.

Michael: Right. Yeah. So let’s see, I’m curious, are there some insights that you’ve been able to share inside the firm that have helped them to strengthen relationships because of just all those years of being on the client’s side. Have you seen some of those things play out?

Janey: Yeah, some of them. I’m hoping to have more. But one big one is the legal budgets for the files. First acknowledgment is is that everybody hates them, but they’re required. Clients require them so that…and they require them for a very good reason, so that they can assess, “Is this case really worth the effort of litigating it?” That’s one reason. The other thing is reserving, they need to get the appropriate amount of money up.

So what I’ve been able to help with and we’re working on is really grasping that concept of legal budgets, putting some time and effort into it, understanding what the adjusters are looking for, and really helping the adjusters getting those into their files helps them. It’s something they have to do. They’re not thrilled about it either because they’re having to bug their attorney for it. So that’s one area that I’m trying to help clear up.

A lot of times when you have to do something you don’t want to do it, it’s annoying. If you know why, at least it’s better. The other thing is understanding a little bit not on how to reserve a case, but why reserves are really important and why we need to be accurate with the information, such as how many depositions we’re going to take, how many witnesses we think we need to talk to, that kind of thing.

And then the impact on the litigation. I think I’ve been able to help attorneys understand why they get pounded for closure so much. In general, a closed file is a good file, but the timing of the closed file is really important. For an insurance company closing a case before their X-Mods are due makes a big deal. So two months could make the difference in an employer’s premium.

Michael: Right. It’s certainly a date they should be aware of and working towards.

Janey: Right. Not only to disagree, but just close it as soon as you can. Delaying something, you don’t know what that delay is doing. If you don’t understand the potential on the other side, that it actually means money literally, then I think it was just they just didn’t understand.

Michael: Right. Okay, let’s see. I was also interested in operational insights. You manage large numbers of people, lots of different clients, lots of different things to keep track of, all these different systems that all had to be in place. I’m curious if you’ve seen opportunities to bring any of that aspect of your background into the law firm.

Janey: Yeah. Well, I’m still analyzing that. I had to learn about a law firm first. My first assumption, there is a lot of similarities. There’s also some vast differences, too, that I had to learn. There’s just understanding what motivates attorneys is different than what motivates examiners. I’m not talking about financially. I’m just talking about it’s a different type of person. So that was important for me to learn.

But I do think that we’re bringing…I’m having a hard time grabbing the word, technology. You started that while you were here, and I’m continuing that process of improving the technology, going paperless, some of the efficiencies that perhaps TPAs and insurance companies are ahead of the legal profession on. The legal profession and the medical profession, they’re lagging a little bit in terms of with the people that they’re working with, like with insurance companies and TPAs.

But then now I’ve learned there’s actually a pretty good reason for that is because they also, the law firms, have to interact with the boards, and the boards are really far behind. So they’re stuck in this little problem of how do you deal with two different worlds. But I think that we’re making headway that way. The other thing is that a lot of what helped me in my work with TPAs and insurance companies is understanding the use of data to point to the right direction of where to look for areas, for improvements, or for problems. That has been very helpful I think trying to get the right suite of reports so that managers can be more efficient.

Michael: I’m curious, as you’ve moved in the direction of more and more paperless, have there been attorneys who have resisted? Do you have any thoughts about how to…? Because look, this is a common challenge at a lot of firms is they’ve got, in any one firm, probably attorneys from two or three different generations. The recent grads are very comfortable with technology and probably annoyed that the law firms’ technology isn’t up to the level of the tools they’re using in their personal life.

Meanwhile you’ve got attorneys who’ve worked for many years a certain way. They don’t see any reason to change. I don’t know. I just wonder if you’ve had some of those conversations. Maybe it hasn’t come up yet, but I’m just curious if you have any thoughts about how to approach those things.

Janey: Absolutely it’s come up. It’s come up a lot. Just the scenario you articulated, you have attorneys that have been in business a long time, they grew up with paper, they want their paper, they like their paper, which I don’t really understand by the way. Then the younger people are used to technology. But what I have found interesting is there is a segment of young attorneys that are very, very reluctant to go paperless, which really wouldn’t…you would think that would be not the case.

And then there’s this…and I don’t know what’s driving it and I’m not a psychiatrist, but I think that it’s not necessarily paperless, it’s just a fear of change. Paperless is really the tangible thing they can point to as to why they’re uncomfortable with a change. So, having gone through the transition in my old career and now here, the only way to do it is to hold their hand and be as flexible as you can but keep moving forward.

Like I said, be mindful of their concerns, work with them, but always have a forward date of, “Okay, we will help you through this this far, but after this date your responsibility is you’ve got to convert.” Because I think that it’s happening. The world is going paperless, and it’s just not going to work trying to hang on to something that’s going to be obsolete.

Michael: Well, the other thing though is there are benefits that the firm receives, maybe at an administrative level, that the attorneys don’t always get. For example, transitioning to more automation, for example, or a platform that has more data collection, etc. You can run reports, you can see things that are happening. So, as an administrator, you’re getting more insights to help you operate the business better, but the attorney is still getting mail, reviewing it, and deciding what to do, whether it’s electronically or in paper form. So their life doesn’t change except for there’s a new obstacle.

Janey: Right.

Michael: There are some people in the total equation who don’t get any real benefit from it, or is that not the case?

Janey: No. Well, I think that the benefits are different. I think the mistake of trying to tell an attorney, “Look, this is going to reduce your workload,” no, it’s not. Absolutely is not going to. It changes where the work is. But what it does do is it will make their lives easier going forward in the case. There’s more pain maybe in opening that piece of mail, there’s clicks. You have to open it and it has to upload. It’s much easier to take a piece of paper off your desk and read it. I would never argue that point with anybody. It’s absolutely true.

But what’s much easier down the line is finding that piece of mail again as opposed to thumbing through boxes and boxes and boxes of paper. So I think it’s important just to first acknowledge that it’s moving the work and secondly that it’s a tradeoff. You’re going to spend four or five more minutes upfront, but you’re going to save an half an hour or so down the road. At least that’s kind of how we got people through it.

Michael: Yeah, yeah, that’s pretty cool. Well, and the other thing is you get to continue being gainfully employed at a firm that is competing effectively in the marketplace versus one that’s holding on as an entity to methods that are going to cause them to fail long term.

Janey: Drowning in paper. Yes, I agree. Yeah, I think that’s one thing that people, it’s easy to lose sight of. If the firm is not healthy and vibrant, it doesn’t do anybody any good because you’re not going to have a place to work if the firm fails.

Michael: Janey, this has been a fantastic conversation. Any other thoughts come to mind, maybe final questions around lessons of leadership? One of the things that I’ve experienced directly is that you have a good way of understanding when interacting with different parties that have different interests, and subtext, etc., just kind of assessing all that stuff out and really understanding what’s going on.

Obviously there’s a natural talent element to that, but I wonder also if there are things that you’ve…either experiences you’ve had over the years, or lessons you’ve learned, or resources you’ve relied on to help develop that ability?

Janey: I think I learned at an opportune time in my career of management two things. One, nobody wakes up in the morning deciding they’re going to screw things up. That’s just not what people do. They come to work and they come to work trying to do the best job possible, but maybe things happen. So, learning that…finding out somebody’s motivation is really important because 99% of the time it wasn’t intentional.

You do get that once in a while, but usually it’s something else is driving that problem. And then the second thing is is that the true concept of cause and effect. Every situation has an antecedent, a behavior, and a consequence no matter what. Those aren’t necessarily always bad, they’re not always good. Just pay attention.

Michael: Can you think of an example that just helps illustrate that?

Janey: What? The ABCs of management?

Michael: Yeah.

Janey: Sure. This is how I learned. Somebody comes to work and they have a co-worker. One of them works diligently really, really hard and is super productive. The other person just is not motivated. They’re either not interested or whatever. So they’re not very productive, and their work piles up. A manager that’s not paying attention or doesn’t understand perhaps sees this backlog and they grab the backlog and they give it to this super productive person.

So, immediately what happens is person here who is not productive thinks, “Cool. I’ve just figured out how to get rid of some stuff and make my life easier.” The person that is super productive is like, “Hey, what’s that? I don’t need more work.” So motivated now, demotivated now. The antecedent or what’s going on is they didn’t understand the behavior they were going to get and the consequence…excuse me, they didn’t understand the consequence that you get from your behavior and how you deal with a particular problem. So you’ve got to always think about what it is that you want to get before you act on how you’re going to resolve it. I don’t know if that’s what you’re looking for…

Michael: Yeah. No, that’s really awesome. It’s funny, too, because when you first identified those three components, I was thinking that they applied to the employee, the subordinate. But really you’re talking about as a manager.

Janey: Yeah.

Michael: Before you take an action, think though how did we get to this situation where you’re on the precipice of taking an action? And then what are some possible consequences when you do this?

Janey: Exactly. The backlog is not the issue. It’s how did the backlog get there. So, very simple. I realized probably old-fashioned example, but it really stuck with me.

Michael: Yeah. The other thing too I notice that some managers are really involved with their team almost continuously, and other managers are more focused on the work on their desk, and they sort of zone in and out of the lives of their subordinates, to make assignments, make reprimands, etc.

Janey: Yes.

Michael: That’s really interesting to me, like how much you can…that second example is the kind of manager who can miss what’s going on and why it’s happening.

Janey: Yep. I call them swoopers. They just swoop in and they just swoop out.

Michael: Right. Do you have any thoughts for how to guide people away from that sort of behavior? Other than obviously that’s not the best way to do it, but there’s a reality is they’re trying to just manage their own desk. Why do some people seem to do better at that than others?

Janey: Well, for managing, I think there’s a difference between managing and leading, and there’s a time for both, more leading than managing. In the scenario you’re talking about, you’re trying to manage the work, right? And so if you forget that your job is to manage the work through other people and you take on so much that you can’t even interact, you’re preventing the people who work for you from learning more.

You’re taking on too much work. So you’re the clog, you’re the problem, and you’re not serving anybody because you’re not getting to know your team, you’re not growing your team, people aren’t advancing. So I would say, understand that managers, leaders, our jobs is to get the work done through other people. If you are doing so much yourself that you can’t spend time with your people, which is your number one job, something is backwards, something is amiss, and you’re not providing the opportunity for the people who work for you.

Michael: Yeah, that’s fantastic. That’s a great place to end it.

Janey: Okay.

Michael: Thank you so much, Janey. I really enjoyed the conversation.

Janey: You, too. Thanks. It was fun.

Key Links

Show Notes

  • Description of Michael Sullivan & Associates [0:45]
  • Description of Sedgwick CMS [1:58]
  • Description of the Executive Director role at a mid-sized firm [4:15]
  • Hiring and managing law firms throughout her career in claims [5:45]
  • Some employers know what firms they want to work with; others ask their TPA for recommendations [6:32]
  • Why attorneys play such a large role in California Workers’ Compensation claims [7:50]
  • Interacting with most of the large GL and Workers’ Comp defense firms in California [10:35]
  • The most important thing a law firm could do to impress Janey as a client [12:39]
  • Her two biggest complaints; things she saw firms do regularly [14:17]
  • Workers’ compensation lawyers are legal experts but not always experts in the entire system but those who took the time to understand the rest of the system offered better advice [18:43]
  • The very best attorneys brought a single-minded focus on the interests of the client [23:20]
  • Attorneys who advised to fight a case right until trial and then wanted to settle [24:27]
  • Not knowing the client’s goals for a caseload often lead to frustration for the client and the attorneys [32:02]
  • It’s probably most frustrating to attorneys when clients want to settle a winnable case [34:33]
  • An example of a particular time when attorneys really provided fantastic service [35:33]
  • Moving into an executive position at a law firm and seeing how much inefficiency clients have imposed on firms due to concerns over billing [38:50]
  • An area where her claims experience has helped guide the firm’s attorneys is understanding the importance of putting thought into legal budgets [44:12]
  • Having impact in a new environment and understanding that what motivates attorneys is different than the adjusters she used to manage [47:50]
  • Bringing the TPA perspective on analyzing data into the managing of a law firm had impact [49:44]
  • Her strategy for guiding attorneys who are resistant to change to accept new technology: be understanding, hold their hand, but keep moving forward [52:27]
  • Don’t tell attorneys that technology will reduce their workload because it won’t [54:09]
  • Operating as an effective manager: nobody wakes up intending to screw things up so take the time to think through and understand their motivation before addressing issues [56:30]
  • Helping managers learn to delegate; those that don’t are impeding the development of their subordinates [1:00:52]