Settlement Counsel: A Unique and Powerful Asset to Control Litigation Risk.It was a great pleasure to speak with my latest guest, Mike Connery, a Partner in the Philadelphia office of the law firm Maron Marvel and leader of the firm's Settlement Counsel Practice Group. Mike is a trailblazer in redesigning the litigation risk landscape for clients by providing this innovative and transformative service. Don't miss this episode!
This transcript has been lightly edited for grammar and clarity.
Kevin Skrzysowski:
Welcome to the 32nd episode of Certum Group's podcast, Alternative Litigation Strategies where I interview esteemed members of the bar on the latest litigation trends and settlement strategies. I'm your host Kevin Skrzysowki, a director here at Certum Group, where we provide a suite of litigation risk transfer solutions to help companies mitigate, cap, and transfer outcome risk in commercial litigation. Today, I'm excited to be joined by Mike Connery, a partner in the Philadelphia office of the law firm Maron Marvel and leader of the firm's settlement council practice group. Mike is a trailblazer at redesigning the litigation and risk landscape for clients by providing a unique and powerful asset in controlling and ending risk. Mike, it's a great pleasure to have you on the program today.
Mike Connery:
Thank you, Kevin.
Kevin Skrzysowski:
Perhaps it would be best if we started by having you give us an explanation of what is settlement counsel and what gave you the idea to develop the settlement counsel practice group?
Mike Connery:
I would begin by saying I started on the defense side as an attorney in a mid-sized to large national firm, and all I did was litigation and trial work from the defense side and I also always had a good level of work that I did with regard to insurance coverage and the various issues of coverage, whether it's reading the policy and reserving rights and litigating, whether it was with the direct plaintiffs or with other carriers or what have you. In about the sixth year, seventh year of my practice, I began to work as a national counsel and I've worked as a national counsel for a manufacturer, for a pharmaceutical company and for an insurer, and that would be managing litigation around the country, managing law firms, constructing the company story and the company defense and the trial. I also ran litigation at my firm as chair for a while. In everything, the case would generally end up in a settlement discussion, whether it was an individual case, whether it was a national council case, whether it was insurance coverage, I was always immersed in settlement.
So part of the idea was I had lived, and many people have done this, you spend two or three years running around the country developing experts, developing motion practice, managing other lawyers, interacting with the judges and courts, and you end up at the end generally talking about settlement and settling. So those three years didn't really build into a jury trial. So I started to think about it as, well, I want to do settlement. I went to a client one day and I said, "I don't really want to go to court for you. I don't want to try your cases. Let me just have a problem that you have, something that's troubling you, that's troubling the general, counsel that's troubling the CFO that is litigation, and let me see if I can make it go away."
Kevin Skrzysowski:
Very interesting. So it sounds like given your history and experience, you have a great perspective from many sides of the litigation equation. Explain exactly when you're working as settlement counsel, how do you get all of the different sides to play nice in the sandbox together from the plaintiff side, the defense side, the corporate side, and then the insurance side? How do you bring everybody together and explain that what you're offering is an efficient and cost-effective resolution?
Mike Connery:
That's the exact question the client asked when I proposed this to them, and it took me about two years of having casual conversation with that client and then one day I got a phone call from the client. He said, "I want to take you up on this." And that was a case where the client was having a great deal of trouble. It was a very large case. Their defense firm had projected a few years of litigation, substantial fees. The client had run numbers, had run liability. They knew what they would most likely eventually pay down the road if they settled, and I was able to help them settle it in 60 days and we settled below any of their estimates, far below their estimates.
What I did from that, and I had done this in prior cases, is I think the first and the most important thing is to be introduced into the equation as somebody who is not engaged in the actual litigation. When the client reaches out, for example, to a plaintiff counsel and they're doing this usually through the defense attorney saying, "The client has brought Mike in and he would like to have the opportunity to speak with you." And 90% of the time plaintiff lawyers say, "Okay." They're curious or sometimes they know because I've worked with them before and to me the first and most important thing is that initial contact and creating a space, if you will, or creating an environment or building a structure, whatever the metaphor is, where the plaintiff lawyer knows that I'm not sending them interrogatories, I am not planning a motion to disqualify an expert. I am simply there to talk and to see if they're interested in resolving. I think tone is important. I think being present with them is important.
Almost every contact I have with a plaintiff lawyer begins with lunch or a meeting in their office or sometimes a dinner and we talk about the case. They know that I have the protections of law and procedure and that it's a safe conversation. Sometimes they say, "I don't know you, can you give me some referrals?" And I'll say, "Well, you can go talk to other plaintiff lawyers. I've resolved things with them. It's confidential so they can't really share what it was, but feel free to talk with them." And sometimes that happens and they'll come back to me and they'll say, "I spoke with so-and-so, I want to talk to you." Part of it is just establishing this level of communication and frankly Kevin, in my view, it just doesn't exist. In the first or second month of the case, sometimes prior to file, I'm having these conversations.
Kevin Skrzysowski:
At the very beginning.
Mike Connery:
It works the best early, but I've come in in the middle of litigation, I've come in at trial, I've come in on appeal, I've come in at any stage and I try to create this level of dialogue with the plaintiff lawyer. When I was doing defense work and when I was trying cases, it's a level of communication I never had. And as the defense lawyer, I'm charged with telling my client, the corporation or the insurance company or both what I think is going to happen, and yet I'm really not able to have communication with the plaintiff. That first meeting or those first few interactions also yield an enormous of data and communication. Sometimes a plaintiff lawyer will say, "Hey, here's my expert report. I want you to see it. I want you to give this to the client." That might've taken a year and a half worth of litigation.
Frequently a plaintiff lawyer will say, "I want to continue this process, let's do it and let's slow down or let's stop the litigation while we're doing this." But I'd let them direct the communication. I think another thing that's important is I don't fight with them. I have zealous advocacy. I am representing the client, I am there for the client, but I don't have to pound on the table. I don't have to threaten them with taking out an expert or a witness or what I'm going to do on cross-examination. I don't have to do any of that, so that's how I establish it and then go from there.
Kevin Skrzysowski:
I think that's a great methodology and it's a very innovative and out of the box approach to consider all available off-ramps from the onset of the litigation. It's similar to what we practice and preach over here at Certum Group that all of the parties and their counsels should consider either funding or insurance to mitigate cap and transfer that outcome risk from the very beginning so that businesses can potentially exit litigation for a known fixed cost and as early as possible, which completely placates the in-house council department and the business units that they report up to. I want to clarify something with you though.
Mike Connery:
Can I go back to what you just said? What you're doing is you're focusing on resolution.
Kevin Skrzysowski:
That's correct.
Mike Connery:
And traditional litigation is, it's not efficient. If you talk to any general counsel or any head of litigation or any person in an insurance capacity, whether it's direct, primary, excess, reinsurance, whatever, the big part of what they do is defense spend. The big part of what they do is a transaction cost. So what this goes at, what you go at and what I go at is you see the opportunity to eliminate and lower the transaction cost. The cases I've had, and I've had over probably over 100 now in the past 15 years, and these are large cases, but this savings is 30 to 50%. I have enough data, I can't share it because it's all confidential data, but it's generally 30 to 50% shift to the better for the client.
Kevin Skrzysowski:
That's ironic because we have done a survey of some of the cases where we've found insurance or funded arrangements, and our statistics show that working with us earlier in the litigation usually saved the client about 50% of the cost of extending the litigation. In fact, I had a head of litigation for one major consumer brands company say, "We can litigate for two to three years and I may win on summary judgment, but if I went on summary judgment three years after filing, I really didn't win. I still lost in terms of the amount of money that I paid."
Mike Connery:
For your listeners, we should also probably admit we've never had this conversation, so I don't know the statistic you just said, but it's inevitable if you can get this going. Plaintiff councils will always be looking for a good resolution for their clients and for themselves. The longer it goes, the harder it gets, the more embedded they become, and if they have funding and things like that, it gets to be very difficult.
Kevin Skrzysowski:
I just want to clarify something about the role of settlement counsel before I ask you about the benefits of potential bifurcation. So are you basically taking over the negotiation and the settlement efforts or are you coaching the lawyers on how to do so? And if it's the former, what's the difference between what you do and going to a mediator?
Mike Connery:
I do whatever the client wants and many of the clients I work with I've had for years, so we have a really good synchronization. We know what we're doing. The usual approach is I am speaking with the plaintiff counsel. Sometimes there's three or four or five plaintiff firms. They might be multiple plaintiff cases, they could be all over the country. It might be very complex, but I'm speaking with the plaintiffs, whoever the lead people are, but I am not doing anything without the client every step of the way, every level of communication. And sometimes the client, the inside claims person or sometimes the inside insurance person may go with me. It just depends on the case. It's rarely done with the defense counsel because the defense counsel has a job, their job is to zealously advocate and so forth. It's not to say defense lawyers don't do a great job, don't know how to negotiate, but it's a much, much different style and I think the approach that this model has is very effective.
When it comes to mediation, I'm not a mediator. I'm not a neutral, and that's another thing I make very clear with the plaintiff counsel, but in a good tone and respectfully. "I'm not here to mediate. I am here to help my client and if helping my client is also an option that's good for you and your client, plaintiff council, great. If it's not, that's okay. The litigation is going to go forward. I'm not going to be involved in it and go for it." Another aspect, I don't get into it much with the plaintiff councils, although it comes up sort of sometimes, about three or four years into doing this, one other change occurred and that was I can't do this as a billable hour, so I do it as a contingency and that is the way I do it in the overwhelming majority of the cases.
I think that that aligns with the client and it also frees me up. I don't have associates to keep busy. I don't have paralegals to keep busy. I don't have court dates to go to. I am just focused on working with the client for that case. It works very, well because it delivers very solid value and it still reduces the transaction costs substantially.
Kevin Skrzysowski:
At first blush, it may appear that the difference between what you do and a mediator does is slightly nuanced, but it's actually vastly different when you're able drive into your methodologies. Now, I would imagine also leveraging you as settlement counsel also would give the litigators time to actually focus on preparing their case and not conveying the case weaknesses and potentially preparing it for trial down the road so they can continue their zealous advocacy and they're almost, not walled off, but it's bifurcated between their zealous advocacy and reasonable consideration for settlement.
Mike Connery:
I've worked with some of the best defense lawyers in the country, the best jury trial defense lawyers, and for the most part, people will share with me that they like this. Some firms, some defense firms will be a little concerned, because it may make the case go away or they may feel it's possibly going to interrupt some of the strategy, but I work very closely with them in terms of making sure the lines of communication are there. Frequently, they'll be on a Zoom call when we're looking and talking about a case and with the client. In a number of cases, I'll end up in a mediation. Usually it's when I come in late and I'll work with the defense counsel, I'll work with the client, I'll work with anyone who's at the mediation and mediators get it. They like it.
Kevin Skrzysowski:
Interesting.
Mike Connery:
It definitely throws a mediator a different curve because they're not used to that. They're used to pulling people aside, going into the corridor and working with the excess carrier or working with the client or doing what they do, because their job's to get to a resolution. I respect mediators, I know a number of them. I work with them. I encourage them to do what I do and it's hard for them, because their model is just close the cases, keep people relatively confident and comfortable with the results, and that way you keep mediating, you keep getting other cases. Not to say they go out and simply market. They market because of their quality, but it is vastly different.
Kevin Skrzysowski:
Yeah, yeah. And I want to drill down into that a little bit more and discuss resolution, resolution of conflicts and how to actually build out a program like this. But first I want to ask you a question that I'm normally asked at the beginning of the matter. People normally come to us as an outside consultant and ask about how work product is protected and how the attorney-client privilege is protected and we think of ourselves as experts in litigation consulting. So we say the expert privilege applies and a lot of it is documented in our non-disclosure agreements and our consultant agreements, but I would imagine this question comes up for you all the time, how do you structure the relationship with the client in terms of protecting the attorney-client privilege?
Mike Connery:
I have a retainer that sets that out in detail and it's protected by rules and procedure, and I am reporting to the client. At first when I started doing this, that was my major concern, how does this fit? Because there's no such thing really. It's never been challenged and I believe firmly that it is quite protected. I've never had a plaintiff lawyer think it's not or say it's not. And I've had some cases where federal judges, I don't think I've had a state judge, but I've had federal judges who were sort of involved and I was involved and somehow, some way we ended up talking with each other
And they have said to me, I've had two federal judges say to me, "Can I order this in cases? Can I order settlement counsel in cases?" And I said, "Well, that's up to you, but I think it's better if it's a decision by a client." And it works from the plaintiff's side too, and it works for corporations when they have insurance recovery and so on. It works in any situation. I've had cases that are injuries and multiple tort cases and multiple jurisdictions and trademarks and class actions. It fits just about anything. I haven't seen anything where it doesn't fit.
Kevin Skrzysowski:
Okay. I was going to ask you about the nature of suit. What type of cases do you handle or is it easier to answer what type of cases don't you handle or have any work done?
Mike Connery:
I had not covered patent, and then I've had that, but for a while I had not seen that happen. But again, it's a reasonable discussion that leads to a resolution, so that applies to any dispute and it applies at any time. So it pretty much covers, it also covers governmental investigation.
Kevin Skrzysowski:
Really?
Mike Connery:
I've had cases where I've worked with federal and state where they were doing some sort of a regulatory matter, and again it was, "Hey, can we talk? Can we talk in a protected fashion and so on?" And for the most part, they very much invite that rather than fighting.
Kevin Skrzysowski:
I had no idea it was applicable to regulatory issues as well. I didn't think about that.
Mike Connery:
Neither did I until...
Kevin Skrzysowski:
Yeah, okay. So I know you've been very successful at developing the national settlement council practice at your firm. Do you think other law firms or all law firms should have a settlement council practice? And if so, how would they resolve the age-old question of resolving the conflict early in the case versus the traditional billable hour?
Mike Connery:
Very good question. I think that it is one of the biggest opportunities that exists in litigation. Internally at a corporation, and I've had these conversations and I'll present internally at a corporation to claims and to senior leadership, you can create a small settlement team that employs these principles. At a carrier, you could do the same. Now most corporations and those carriers, the people who are in-house will say, "Well, that's what I do." And they do, they negotiate for a living, but this would be something that is just intensively focused on resolution, not on managing the case. That's one thing.
The other thing, which I think is dramatic, and I hope it changes things. I have a client right now who's sending out an RFP for settlement counsel and they're going to send it to their panel and they're going to request that their panel counsel respond with people who they believe are appropriate for this work, who will work on a contingency base and they will not work where their firm is doing the defense. So if you have council A who is defending and council B is a settlement council, they will be from separate firms.
Kevin Skrzysowski:
Different firms, okay.
Mike Connery:
The settlement council will work on a contingency with the internal claims folks at the corporation or the carrier, and their sole mission is to see if they can resolve the case. I don't know if firms, I'm very curious to see what their responses will be because the billable hour is hard to get around, but I think it's an enormous opportunity.
Kevin Skrzysowski:
But couldn't there be, and we do some of these as well where we do what's called a litigation buyout and the company has some known threat and repenting litigation and they obtain a LBO policy to ring-fence and expunge the exposure. We usually will continue to work with defense counsel, but we now own the litigation, or I should say the third-party carrier does. So we own decision-making authority and the way we resolve that and it benefits all parties is by giving defense counsel a success fee for an earlier and more efficient resolution. That they'll participate and have an increased fee award or bonus structure for getting the good quicker. I think that could be, like an AFA type success fee model could also be very attractive for defense counsel to get them on board with working with settlement council. Would you agree with that?
Mike Connery:
Yeah, I think success fees play a big role. I think your ideas, that sort of are quite creative. And again, we haven't had this discussion, so I'm just responding to what you're saying, they're very creative. I think anything that incentivizes a resolution is a good idea because when you look at it in the terms of an insurer, it's about loss ratio and anything that improves that loss ratio is a good idea. And this does. This, going back to that 30 to 50%, that's a massive shift if it's employed internally with a settlement team and externally with a settlement team.
Kevin Skrzysowski:
So basically what you have said is that it could benefit the market as a whole, if firms had settlement practices, if defense firms leveraged them, and if corporates and carriers also had groups that were solely dedicated towards settlement and looking at resolution from all three, four sides.
Mike Connery:
Yes. And I think the key is the external counsel who can come in and meet with that plaintiff or meet with that group of plaintiffs, create a space, nobody's hollering. The earlier the better. The results are considerable.
Kevin Skrzysowski:
And I think you've shared a lot of really valuable insights regarding this practice area, this tool, this solution that is settlement council. But just one last question for you, and I think you've already kind of answered this, but just to perhaps summarize as a closing statement, it sounds like what you're really doing as settlement council is looking at the litigation from a transactional perspective and upending it. If you had to summarize the benefits of looking at the transaction through this lens, what would it be?
Mike Connery:
I agree with you. It's looking at the litigation the way people tend to look at it at the last hour and you're moving that 11th hour up to the first hour and you're seeing the results by having that dialogue. It works. And I think that the people who are the most surprised are the plaintiff lawyers.
Kevin Skrzysowski:
Yeah.
Mike Connery:
And they like it, because they get a great result for their client, they get a good result for their firm, for their practice, and the risk goes away.
Kevin Skrzysowski:
And it shakes up the age old system of one party comes in very high, one party comes in very low, and you spend years chipping away to get to the middle, which is where you're going to end up anyway. We work with clients all the time where we get involved and we could have a resolution and they pass on one of our solutions only to hear from them a year or two later, and now the price of poker is higher and they spent more money and they're in the same position.
Mike Connery:
At first meeting, Kevin, with the plaintiff counsel and the building of that relationship also is an information exchange, and that tends to take the air out of the, I have to be very, very high and I have to be very, very low, because I don't really know where the other side is. When the other side starts to get a feel for where they are, it enables a negotiation where you can identify the range and you can identify that range so much quicker than that last minute. There isn't a defense lawyer in the world who hasn't walked into a mediation and there isn't a mediator in the world who hasn't walked in and said, "Okay, well, where are you?" And the answer is, "Well, we don't really know. The other side's just crazy." Well, this eliminates the crazy thing and it gets you to talking. The cases I'd had closed 90% of the time.
Kevin Skrzysowski:
Wow, that's an amazing-
Mike Connery:
And I don't drive them to settlement. I just leave it, go and I'm there and I'm there to talk and I'm there to listen and I'm there to communicate. And 90% of the time we figure it out. And some of these cases are not about the money, they're about the terms. And that's the other thing, this dialogue opens up a great discussion on the real terms and the problems sometimes that the plaintiff lawyer's having or that the corporation has and needs and those terms are the things that freeze cases. So this helps that process as well.
Kevin Skrzysowski:
We have sort of similar practices in that we're working with clients for an efficient, cost-effective resolutions, and I approach clients and repeat clients frequently with cases that I see where I think one of our solutions may be applicable, but many times a client just comes back to me and says, "Kevin, this one is not going to settle for whatever reason." Perhaps it's for PR or brand image. "We are never going to settle this case and we are going to litigate to the end of the earth." Do you hear similar responses sometimes when you're reaching out to clients?
Mike Connery:
Certainly. And in some instances, a company has to try a case. In some instances, they have to get into the courtroom, they have to be in front of the jury, they need to have the best possible defense counsel. This is not a suggestion that this applies to absolutely every case. It applies to, in my experience, about 90% of the cases I've worked on, they can resolve, but there are certain circumstances where you have to take a stand or it's such that the other side has no interest whatsoever in talking. That can happen.
Kevin Skrzysowski:
I fully agree. Yeah, it's not a solution that's applicable 100% of the time and for various reasons. And it makes sense. And when I hear that from a client, I don't push back. I take that as face value. I think that's all the time we have for today. I really want to thank you for being on alternative litigation strategies and spending your time with me today and sharing your valuable insights and experience in this innovative practice that you've created. Thank you.
Mike Connery:
Thank you, Kevin. I appreciate what you're doing.
Kevin Skrzysowski:
I appreciate that, Mike. And if anybody would like to get a hold of Mike, you can simply Google Mike Connery at Maron Marvel and you'll find his contact information. If you want to get a hold of me, you can look me up, Kevin at Certum Group. I'm also on LinkedIn. You can just Google Alternative Litigation Strategies and see all this podcast and all the remaining podcasts as well. As usual, I'd like to take the audience for listening. Again, the podcast will be on LinkedIn. It will be on Apple, Spotify, Stitcher, or really anywhere where you listen to your favorite podcasts. It'll also be on our website, certumgroup.com. And if you also want to read about the litigation risk transfer solutions we offer in terms of funding and insurance, all that information is there as well. Thank you once again to Mike Connery from Maron Marvel, and thank you again for listening.
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