President’s Message: The Extinction of the Insurance Defense Lawyer?

WDC Journal Edition: Spring 2012
By: Michael W. Gill, President, Wisconsin Defense Counsel

One of the privileges afforded to me as the President of this organization is the opportunity to meet and work with other state defense organization leaders. In January, together with our Executive Director Jane Svinicki, President-Elect Rollin Krafft, Program Director Kara Burgos, and DRI State Representative Matt Yde, I attended the DRI North Central Region Annual Leadership Conference. Representatives from the state legal defense organizations of Indiana, Illinois, Minnesota, North Dakota, and South Dakota gathered in Naples, Florida (I know it’s a dirty job, but someone has to do it) to share information about our respective state organizations and exchange ideas on how to enhance and improve the membership experience in our respective states. This conference also gives us the opportunity to discuss and debate the common problems facing the defense bar not only in Wisconsin, but throughout the upper Midwest.

As a result of my attendance at the North Central Region Conference in 2012, and earlier years, I have come to realize certain things about both our state organization and the current “state of the world” for defense practitioners that I would like to share in this column.

First of all, I have learned that the WDC is unique when compared to some of the other state defense organizations in our region in that it allows “in-house” counsel to be members of the organization. A number of the other organizations in our region preclude attorneys that are not in private practice from belonging to their state legal defense organizations. This surprised me in that the WDC, f/k/a CTCW, has always enjoyed, and prospered from, a strong contingent of staff attorneys participating as active members of the organization.

Those states that do not allow in-house or staff counsel to belong to their organizations offer a variety of justifications for that position. Some feel that the presence of staff counsel at their conferences would lead to a marketing “feeding frenzy” at their conferences that would lessen the collegiality among the private practitioners in attendance and distract from the educational and social objectives of the organization. In at least one state, there is still a rule prohibiting in-house counsel from defending lawsuits, thereby eliminating this segment of the defense bar altogether.

In representing the WDC at these conferences, I have unabashedly supported our organization’s heritage of not only allowing, but promoting, the membership of in-house or staff counsel. This organization has benefited greatly over the years from the leadership of people like Bernie McCarten from American Family, Bryce Tolefree from American Family, and your current President-Elect, Rollin Krafft from West Bend Mutual. Many other staff attorneys, too numerous to mention by name, have done yeoman’s work for this organization as board members, committee members, speakers, and contributors to the WDC Journal and our web site. Without the contributions from these many individuals over the years, our organization would certainly be diminished. No doubt the WDC will continue to benefit from the contributions made by this segment of our membership, and we should continue to promote and expand our connections to this group.

The other observation derived from my recent attendance at the North Central Region Conference is the pervasive concern that defense attorneys have about the trends in the practice of defending civil litigation, particularly on behalf of our insurance company clients. Representatives from virtually all of the states in the region express anxiety on behalf of their membership over shrinking caseloads, stagnant or reduced fee income, arbitrary fee reductions attributable to fee auditing and a loss of business due to the handling of files by in-house counsel. These are all concerns that some of our members share with our colleagues from the surrounding states. At the regional meeting, I listened to those who have a “doom and gloom” perspective regarding the direction of the practice go so far as to predict the virtual extinction of the insurance defense practitioner in the private bar.

From the perspective of an attorney that has practiced primarily as an insurance defense lawyer for the past 30 years, I believe that some of this is “old news”. The demise of the insurance defense lawyer has been a topic of conversation for as long as I have been practicing. Insurance carriers have been looking for ways to reduce or eliminate defense costs ever since I started in the profession. Without a doubt, the pressures faced by defense attorneys to control or reduce legal defense costs, while still making a fair living from the practice, are as great as they have ever been. Unfortunately, some of our insurance defense clients are faced with similar belt tightening problems.

As defense lawyers, we work at the sometimes cruel intersection of the business world and the world of civil litigation. The people who make the business decisions may not always have a full appreciation for the talent and work that it takes to successfully defend some of the cases that we as defense lawyers handle. The world of civil litigation does not always surrender itself to business principles that may be sound in other contexts. It’s very difficult in some instances to provide a quality legal defense based upon a model or budget that does not fit the circumstances.

We as defense lawyers, however, also need to be cognizant of the economic realities faced by our clients and need to be alert to efficiencies and cost saving opportunities, especially in the smaller cases. As a whole, in my experience I think that the defense bar is sensible about trying to control defense costs in most cases.

How do the two seemingly unrelated topics that I have prattled on about above connect? Because the WDC has a large contingent of staff attorneys and other in-house counsel in its membership, it potentially provides an excellent forum for having a dialogue about these areas of concern in the defense bar. This is true even though the business relationship between “outside” defense counsel and their insurance defense clients has oftentimes been treated as a taboo topic. Ignoring these issues of concern for both the defense practitioner and the insurance defense client is unlikely to mute the concerns that are being voiced at events such as the DRI North Central Leadership Conference, and by individual members of the WDC that voice these same concerns when I and other Board members interact with them.

Keeping in mind the fact that most, if not all, of the staff attorneys that belong to the WDC are not responsible for the business decisions made by insurance carriers that impact defense counsel, does the WDC as an organization want to wade into these issues and look for constructive and mutually beneficial solutions? At the national level, the DRI is looking at these issues in an effort to assure a stable civil defense bar into the future. Ultimately, the decision whether or not to have the WDC address these issues in some formal manner is a decision for the WDC membership through its Board of Directors. I would urge the members of the WDC to communicate their thoughts and wishes on this issue to me or other Board members so that we can determine if this is a matter of significant concern to the membership that calls for WDC involvement.

To answer the rhetorical question that appears at the top of this column, I do not believe that the insurance defense lawyer is headed towards extinction. I think that all parties involved in the defense “industry” are interested in the same thing. We all want to see the rich tradition of excellent defense advocacy continued. We all want our defense clients to retain business viability and prosper, and we all want to see the defense bar fairly compensated for its skill and effort, so that the next generation of defense trial advocates will have an incentive to continue that tradition. Even the companies that possess large legal staffs require the services of able defense counsel for any number of reasons. There would appear to be no good reason, business or otherwise, to eliminate the private practice defense lawyer from the landscape. The WDC as an organization must do its best to assure this outcome. We look forward to receiving your input on how that can best be accomplished.

P.S. On an unrelated note, kudos to Beth Hanan and Dan Kennedy of Gass, Weber, Mullins, LLC, for their work on the amicus Brief in the Hirschhorn case recently decided by the Wisconsin Supreme Court. The summer edition of the WDC Journal will include an article on this new precedent. Beth and Dan deserve immediate acknowledgment, however, for their service on behalf of the organization in preparing the amicus Brief. If there are others in the organization who are willing to serve in this capacity now or in the future, please let us know. It is very valuable work for the organization and the defense bar as a whole.