"Run-of-the-Mill Justice" by Stanford Law professor Nora Freeman Engstrom, published in a recent issue of Georgetown Journal of Legal Ethics, analyzes the practices of "settlement mill" law firms -- those that "advertise aggressively, sign a higher percentage of callers to contract, delegate more duties to non-lawyers, file fewer lawsuits, and take far fewer cases to trial" than legitimate law firms and attorneys.
Over the past three decades, no development in the legal services industry has been more widely observed and less carefully scrutinized than the emergence of firms I call “settlement mills”—high-volume personal injury law practices that aggressively advertise and mass produce the resolution of claims, typically with little client interaction and without initiating lawsuits, much less taking claims to trial. Settlement mills process tens of thousands of claims each year. Their ads are fixtures on late-night television and big-city billboards.
These settlement mills differ from conventional law practices because they settle everything, and do so without the negotiator having the benefit of "(1) first-hand information about verdicts obtained in comparable cases, (2) detailed information about the intricacies of the particular claim, and (3) the proven willingness and ability to take the claim to court."
Settling all cases -- including the catastrophic cases -- cheaply in relation to the value the cases would have at trial, the settlement mills lack the ability to credibly move cases to jury trial, but offer insurance companies quick, cheap settlements.
Attorneys at settlement mills handle an extraordinarily high number of cases, necessarily treating them in "cookie cutter" fashion. Consequently, they spend "little time engaged in legal research, investigating claims, and preparing pleadings." The article reports that "one Georgia settlement mill attorney reports that she personally settled approximately 600 to 700 claims in a thirteen-month span."
Client screening and even settlement negotiations are delegated to non-lawyers. Cases may go from intake to settlement without any attorney contact.
Many of these settlement mills seldom file suit ior investigate cases, and almost never take a case to trial or refer to a firm that is capable of doing so.
Negotiations with insurance adjusters may take no more than ten minutes, and then clients are pressured to take whatever it offered. (Thus the slogan "one call that's all" may be literally true -- one call to the insurance company is all you get.)
Such settlement mills prey upon uneducated and unsophisticated people.
Such firms rely upon heavy TV advertising. Since TV advertising lawyers are stigmatized among lawyers and judges, the attorneys in those firms no longer feel bound by a need to maintain good reputations in the profession. Thus, there is no need to do good work for clients in order to maintain a strong reputation among other attorneys. If a lawyer relies solely upon heavy advertising to produce clients, reputation and relationships do not matter. All he needs is a heavy advertising budget and a steady flow of unsophisticated, unsuspecting clients to sell down the river.
They negotiate claims on the basis of formulas that have little to do with the value of cases if they were taken to trial.
The article concludes that insurance companies like settlement mills because they settle quickly and cheaply, even in catastrophic cases, without litigation.
Such law firms are able to operate in this manner only because federal courts bar tough regulation of legal advertising, and their operations operate "under the radar" because they almost never file their cases in courts. They are the kudzu of the legal system, operating in a manner generally contrary to the interest of their clients and the public, and just as hard as kudzu to limit.
Ken Shigley, an Atlanta attorney, is a national board member of the Interstate Trucking Litigation Group. His practice focuses on representing people who are catastrophically injured, and families of those killed, primarily in commercial trucking and bus accidents. Mr. Shigley also has extensive experience representing parties in products liability, catastrophic personal injury, wrongful death, brain injury, spinal cord injury and burn injury cases. He is a Certified Civil Trial Advocate of the National Board of Trial Advocacy, has been listed as a "Super Lawyer" (Atlanta Magazine), among the "Legal Elite" (Georgia Trend Magazine), and in the Bar Register of Preeminent Lawyers (Martindale). Currently he is treasurer, and unopposed as a candidate for president-elect, of the 41,000 member State Bar of Georgia.
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