Traditionally, managing a large portfolio of litigation can involve e-mails and reams of paper travelling back and forth between a company and its law firm, waiting for phone calls to be returned and workflow grinding to a halt if any of the above fails to happen on schedule. But in an effort to align litigation management with their broader business and technology goals, in-house counsel at several Canadian companies are making moves to bring their portfolios of claims online, through a portal run by their external law firm.
Gowling Lafleur Henderson LLP’s XClaim portal went live earlier this year, and is a response to some of the inefficiencies and expense associated with traditional claims management, explains one of XClaim’s founders, Louis Frapporti, a commercial litigator in Gowlings’ Hamilton, Ont., office. “One of the things that was immediately apparent to me was that we needed to change the way in which we did the work, we needed to use technology much more effectively,” he says.
Considering technological innovations and how in-house legal departments address cost issues, Frapporti says he began to piece together a business model that would leverage technology in a way that clients already do internally and give them greater value.
The portal, currently used by several of the firm’s insurance and non-insurance clients, works by allowing staff and lawyers designated by the in-house legal department to log in and view a high-level snapshot and the status of all of their files. Clients can then go into each individual file, find out who the players are on the external legal team and all of the steps that have been taken in the file as it progresses through the various stages.
For example, clients can see any digital notations that have been made in the file, the history of offers exchanged between the parties over the course of the litigation, a history of all of the motions, the parties involved, when a hearing took place, and whether the result was granted or not by the court. Clients will also be able to generate their own reports from the system, rather than having to ask the external legal team for information.
Gowlings also provides many of the XClaim-related services for a fixed, rather than hourly, rate. “The goal here is to attempt to do everything — every aspect of a file, from the documentary production and correspondence to what would normally be memos to file is all digitized,” says Frapporti.
For many in-house legal departments, moving away from older forms of claims management in the digital age is also in line with their broader business goals. “I think it’s a highly innovative tool and being the general counsel for ArcelorMittal in Canada, we’re being constantly pressed by our company to be innovative and to find better ways of doing the things we do. In the legal world, the challenge is quite difficult because the legal culture is by its nature very traditional and slow moving,” explains Robert Soccio, general counsel, corporate secretary and compliance officer with ArcelorMittal Dofasco, which started using XClaim in late 2011.
Before the technology came along, managing a portfolio of claims came with the hassles and cost involved with exchanging large files, photocopying, and other administrative tasks, as well as adjusters having to wait for a response from outside counsel, explains Heidi Sevcik, vice president of claims at Cambridge, Ont.-based Gore Mutual Insurance Co. “Insurance companies have a constant need to control costs yet make sure that they get the right outcomes on their litigation files, so it’s a balance. But as margins continue to be challenged in our industry, we really need to look to our costs overall, to our claims costs overall, to make sure that we’re being prudent in managing those,” she says.
Before it started using the portal in early 2011, Gore Mutual had already put a lot of effort into document management systems and broker portals. “We very quickly realized we were very well aligned in terms of our business goals, and so we partnered right at the get-go to help them develop that solution for the property and casualty insurance industry,” says Sevcik.
At the moment, all of Gore’s casualty adjusters have access to XClaim, where they can view the status of litigation whenever and wherever they choose and communicate immediately with the legal firm. They also know when instructions or comments are being reviewed.
Ralph D’Angelo, senior counsel in Gowlings’ Hamilton office, moved from the insurance industry to become national manager of the XClaim portal. He explains that insurance companies are already using their own programs similar to XClaim, which monitor every stage of the process including their other non-legal service providers, when files are being handled internally. “There’s that level of transparency that has developed within the insurance industry, in terms of their usual service providers, except lawyers. Once the file goes out to external legal counsel, it’s like it disappears into a black hole,” he says. “They lose that control and what we’re doing here is we’re giving them that sense of control again into the litigation stage.”
While the portal has been met with a positive response, one concern raised by clients and prospective clients is privacy, admits Frapporti. Ultimately from a security perspective, he says, there is no issue as the files are encrypted, only clients have access to the portal, and they can internally negotiate and structure access arrangements depending on the seniority within the institution. “Privacy, security, accessibility, workflows — all of those things were issues but because we knew they were issues, we could work through those to make sure the security is tight, privacy is restricted through the proper use of user IDs and passwords,” says Sevcik.
While it’s still in the early days, Sevcik says the tool is already saving adjusters time, helping them assess reserves more quickly, request settlement authority, and complete internal reports without waiting. Essentially, it gives them the time to do the reviewing, assessing, and analyzing part of their job as opposed to processing. “We’re able to see everything through the portal immediately. The efficiencies are tremendous when you’re able to do that,” explains Sevcik. “It’s the immediacy of the information that makes a big difference.”
Indeed, one of the keys to the portal for clients is its transparency. “They essentially see everything we see. It’s as if the client is actually in our offices, or we’re in theirs, that was a key part of this idea of transparency. How can you be completely accountable for what you do, have the client trust and feel as if they know everything that’s going on and nothing’s being withheld from them, and also I think, very importantly, create a system in which you’re working collaboratively with the client,” says Frapporti.
This is not always the case when it comes to traditional litigation management, which Soccio says can be “a mystery.”
“Lawyers don’t like transparency. They want to be the gatekeeper to the information that they provide to their clients, you know, I would find this probably very uncomfortable for many lawyers, where their clients know the status of litigation in real time, the reminders that they put in for themselves, expenses, all the documents,” he says.
Normally, he says, when in-house counsel are working on a file and need information, they call the external lawyer or the legal assistant who would then either have to send it by fax or e-mail, describe it over the phone, or draft a letter. “That’s sort of the mundane kind of minutiae that really grinds things to a halt and this tool just bypasses all that,” he says. “If I want to look at a litigation file that’s in progress or that hasn’t been reviewed in a while, I just access the portal and there’s all the information. I think it’s really transparent and really effective.”
ArcelorMittal Dofasco uses the tool to manage all its commercial litigation. The company is moving towards having all of its files on the XClaim portal, including those with historical legacies. Both Soccio and Sevcik add that there are no barriers to using the portal for managing either Canadian litigation or litigation in the U.S. “This is very innovative and it saves time and money, but I think for me, it’s the convenience, the accessibility, and the transparency that goes with it,” says Soccio.
Down the road, Gowlings is looking at integrating project management tools into the system, as well as some additional knowledge management and document processing tools to focus on large individual cases.