Getting on more insurance panels is a top priority for law firms seeking to expand their panel counsel revenue base. Now is the time that proactive insurance defense law firms across the country are turning their attention to planning for 2018.
There are actually a number of ways to grow revenues for insurance panel counsel members. This is the first of a series of three articles that will identify several proven revenue-generating techniques managing partners can include in their 2018 business development plans. Each article will focus on one of the three successful growth strategies identified below.
Three Ways to Grow Insurance Defense Revenue: Panel Counsel Revenue Tips
- Attract more clients.
- Increase the average transaction value from existing clients.
- Increase the frequency of getting more cases from current and past clients.
This article focuses on attracting more clients.
Keep reading for valuable insights into 2018 panel counsel revenue growth potential for your law firm. The author is available to discuss what this might mean for your law firm.
#1 ATTRACT MORE CLIENTS.
Law firms should always be on the look-out for new clients. Consolidations within the insurance industry, as well as a move to use regional law firms, means that an insurance defense law firm never knows when it might be at risk of losing a client.
The exact reason the insurance defense sector is attractive to its law firm participants—namely, the steady flow of new matters—also has a downside. The work associated with an existing client can be so voluminous, that managing partners and practice chairs either get lulled into a false sense of security or simply don’t have the time to go after new business.
A common outcome is that an insurance defense law firm can become dependent on a relatively small number of clients. The “too many eggs in one basket” syndrome carries a high level of risk, and is another reason insurance defense firms should constantly look for new accounts for panel counsel revenue growth.
Listed below are a few ways that insurance defense law firms can naturally seek new business relationships.
Ask Existing Clients for Referrals
Ask current clients with whom you have a friendly relationship if they have suggestions on what other firms you might approach for more business. This could potentially be an awkward discussion for competitive reasons, so you might want to ask insurer clients for suggestions in regard to third party administrator (“TPA”) prospects, and vice versa.
Additionally, in cases where you have not already done so, you can ask current clients if they are willing to serve as a reference for your law firm. It can be difficult to maintain a list of references, particularly since some carriers may have a policy of not giving recommendations.
A list of several references can support overall business development efforts by helping a law firm avoid “reference fatigue” and also allowing for some selection options in instances where one reference may be perceived as competitive by the targeted prospect.
Monitor New Carriers Admitted to Write Coverage in Your State
Identify and approach new entrants to your state’s insurance market as another way to enhance panel counsel revenue growth. The Department of Insurance within most states publishes periodic reports of new entities admitted to the insurance market within the state.
In the state of Florida, for example, a report on new admissions is published at least twice each year. More than 120 new insurance companies and insurance-related entities were approved to provide insurance services in the state during 2015, for example, according to a 2016 market share report.
In addition to new property and casualty insurers admitted to the state, an insurance defense law firm may also be able to find admission information on newly admitted third party administrators (TPAs), risk retention groups (RRGs), surplus lines carriers, and others.
Although it may take some time for a carrier or TPA to build up a book of business before claims are filed against the new policies, it is always better for a law firm to start building a potential relationship early.
Be Alert to Carriers that are Expanding Coverage
Monitor P&C industry journals as well as the news pages of leading insurance carrier websites to gain an understanding of what firms are expanding within your state. Sales office openings, hiring patterns, and product announcements are all potential indications that a carrier is increasing the number or types of policies being written within the state.
By staying alert to new market entrants, your insurance defense law firm can arrange an introduction to new market participants before competitors get their attention.
Consider Mutuals and State-Based Carriers
A mutual insurance company is an insurance company owned entirely by its policyholders. Many states have an association of mutual insurance companies domiciled in that state, as well as large national mutual companies that write coverage (like State Farm or Sentry Insurance).
Many mutual companies are relatively small, with close ties within their communities. This may create opportunities for smaller insurance defense law firms that are facing increasing competitive threats from larger law firms within the state.
The National Association of Mutual Insurance Companies (NAMIC) has more than 1,400 member companies, as well as 18 chapters across the country. NAMIC may be a resource to law firms seeking to establish new relationships.
A similar approach for panel counsel revenue growth can used to gain business from smaller carriers that are domiciled and / or headquartered in your state.
Hire Lateral Attorneys with a Book of Existing Business
Hiring an attorney with an existing book of business or a big rolodex is a time-tested strategy within the legal community, and the insurance defense sector is no different.
If you do plan to hire an attorney in order to capture their client base, it is important the confirm the strength of those relationships while also checking for conflicts. Also, try to determine how likely it will be that the attorney’s clients stay with your firm for the longer term.
A partner of a relatively large insurance defense firm may look like an attractive hire, but if the hiring entity is a comparatively small law firm they may find that a carrier has guidelines on the minimum size of a firm they use on a panel counsel program.
It is also possible that the panel appointment is governed by an agreement or set of regulations that restricts the appointed firm’s (or attorney’s) ability to transfer its coveted panel position to another law firm. This may be particularly true in the municipal market where panel appointments are made through an RFP process.
Explore the Self-Insured Market in more Detail
A large insured party—like a retailer, restaurant chain, or hospitality company—is likely to have a “self-insured retention” (SIR) that requires them to handle internally any claim that falls under a certain monetary value. Some Fortune 500 companies, like Wal-Mart or Home Depot, have a robust panel counsel program as a result.
Self-insured insured clients are likely to offer higher rates than insurance carriers, and may be better at building personal relationships with their law firm partners.
The types of claims covered by a self-insured entity are generally the same as for insurance companies, including premises liability, commercial general liability, commercial auto, workers’ compensation, and employment practices.
Watch the market also for panel counsel revenue growth opportunities. One current example is in the expansion of meal delivery services, which may result in auto liability claims.
Trucking companies also may maintain their own panel composed of law firms with experience in trucking, transportation, and inland marine claims.
Insurance Defense Marketing Consultant for Law Firms
If your insurance defense law firm is asking how you can get on more insurance panels, give us a call. We have helped more than 120 insurance defense law firms pursue new insurance panel counsel clients.
Legal Expert Connections, Inc. offers three key benefits to insurance defense law firms nationwide:
- We are the leading U.S. legal marketing agency specializing in the insurance defense market. We know the panel counsel process, and can accelerate your business development efforts by identifying who you need to contact.
- Save time and money. You get quality marketing materials and targeted, accurate prospect lists. No need to invest in senior in-house marketing / business development staff with the associated overhead expense for office space, equipment, and benefits.
- Increase revenue with professional, on-going legal marketing campaigns. We do the research to identify insurance panel managers, so you can better target your marketing efforts to obtain new panel counsel appointments.