Industry Practices in Records Retrieval

Transcription

1 Industry Practices in Records Retrieval Study Findings A CLM Advisors Report

2 Table of Contents Introduction... 3 Thank You to Our Participants... 3 About This Industry Practices Study... 3 The Study s Underwriter... 4 Key Findings... 5 Participant Demographics... 7 Participant Profile... 7 Size of Organization... 7 Pending Claim Inventory... 7 Roles of the Survey Participants... 7 Pending Litigation Inventory and Legal Spend... 8 Use of Staff Counsel... 9 Current Practices Frequency and Measurement Retrieval Activity General Frequency Retrieval Activity Per Claim Frequency Measuring Current Processes Other Records Retrieval Considerations The Relationship of Retrieval Speed to Cycle Time Retrieval Activity Costs Internal Staff Retrieval Costs When Law Firms Retrieve What Executives Want In Their Retrieval Process Accuracy, Speed and Cost Allocated vs. Unallocated Formal Retrieval Vendor Programs Desired Vendor Features and Attributes Record Organization Services Challenges to Record Retrieval Program Implementation Conclusions About CLM Advisors CLM Advisors 2016 Page 2

3 Introduction Thank You to Our Participants We thank the 66 senior claim and litigation executives who participated in this Study. We believe this is the most comprehensive study of its type in the industry, and without such participation, this Study would not have been possible. Representing a wide range of property and casualty claim organizations, these executives took the time to share their practices and perceptions about this important claims management function. The dedication of these executives is a reflection of their commitment to the industry, and to their interest in promoting and furthering the highest standards of claims and litigation management. About This Industry Practices Study The retrieval of supporting documents and records is a critical, core activity for all claim organizations. Medical records, wage and employment records, diagnostic imaging files, pharmacy, and Social Security records are just some of the records retrieved during the claims process. These records are retrieved on a daily basis and often at a very high volume. Accurate, timely, and efficient retrieval of these records is crucial to establishing liability, causation, and damages. Claim organizations differ significantly in how they approach this critical task. Some rely on their claim professionals, while others have clerical units dedicated to the retrieval process. In the litigation arena, some claim organizations rely on their outside or staff counsel to secure the appropriate records, while others use third-party vendors. For almost all claim organizations, however, the cost of retrieving these records is a material loss adjustment expense. This Study examined different best practices for records retrieval across claim organizations of varied size and complexity. The Study explores claim executives perceptions about their own processes, retrieval costs, and current industry practices generally. Study Methodology This Study was administered by CLM Advisors, the consulting arm of the Claims and Litigation Management (CLM) Alliance. The data gathering instrument used was an online survey, consisting of approximately 60 questions. The majority of the questions were multiple choice, but several questions called for open-text responses. CLM Advisors 2016 Page 3

4 All information gathered was then aggregated and de-identified. Particular care has been taken to ensure that no specific responses or data elements can be attributed back to any specific organization or participant. The Study s Underwriter The costs of assembling the Study s questions, gathering raw survey data, analyzing participant responses, and preparing the Study s Report, were underwritten by Keais Records Retrieval. No identifying or proprietary Study information was provided to Keais as part of their Study sponsorship. We are grateful to Keais for their sponsorship and support of this Study. Keais is a marketleading and rapidly growing provider of records retrieval services for the claims industry. Its dramatic growth has made it one of the largest providers in this industry. Keais has been a longstanding supporter of the CLM and the industry collaboration and educational resources that the CLM makes possible. More information about Keais can be found at Questions About this Study This Report was authored by Taylor Smith of CLM Advisors. Questions can be directed to: Taylor Smith, President, CLM Advisors taylor.smith@theclm.org CLM Advisors 2016 Page 4

5 Key Findings We believe this to be the most comprehensive industry study on the topic of records retrieval done to date. The findings suggest that records retrieval processes, for most claim management organizations, are both resource intensive and costly, including a potential correlation to higher claim cycle times. Further, most organizations appear to have little visibility into the level of resources being utilized, or the costs these retrieval activities represent. Most of the executives polled appeared to agree that the overall costs associated with this process are high, and in the litigation context extremely significant. At the same time, most survey respondents accurately described the relative low level of resources required to implement program changes. This combination factors, in our view, make records retrieval an area of low-hanging fruit for claim executives, both in terms of process improvement and enhanced cost control. Key findings from this Industry Practices Study include: Records retrieval is a very high-frequency activity for claim organizations. Sixty four (64) percent of claim organizations retrieve records on 60% or more of their files. Almost 40% of organizations retrieve records on 90% or more of their files. 72% of the responding executives agree with the industry statistic that, on average, at least 7 records are retrieved on claims that require records. These findings exceeded our assumptions about retrieval frequency. In most claim organizations the frequency and cost of retrieval is essentially unmeasured. The absence of current measurement processes makes it difficult to benchmark baseline starting points. 94% of the organizations responding said that they do not capture the number of record retrievals made by their organization. 70% said that they do not capture the amount they spend on retrieving records. 97% of the responding organizations said they have never done a time and motion study to capture how much time their internal staff spends on this activity. Only 5% have ever measured internal retrieval time (i.e., the number of days required to secure records). Only 10% have ever analyzed law firm invoices to understand what law firms charge for retrievalrelated activities. CLM Advisors 2016 Page 5

6 Claim executives agree that retrieval activities consume significant internal resources and drive significant cost. Claim executives reported that retrieval activities can take on average up to 12% of a claim professional s day. This can reflect a significant investment of resources, consuming more than 200 hours a year of claim professionals time. In the litigation context, 41% agreed that records retrieval may in fact represent the second highest area of controllable litigation expense. Almost half the executives feel that their staff resources spend too much time on retrieval activities and would like to reduce that time. Executives with those beliefs are clearly not alone. Claim executives believe there is a correlation between faster retrieval time and improved claim cycle time almost 7 out of 10 organizations reported that they sometimes or frequently have to wait for records to come in before they can close a file. 82% of responding executives agreed that faster retrieval could mean faster file closure times. Given the strong focus, for most organizations, on managing claim cycle times, retrieval speed should be examined as yet another tool to accomplish this objective. Record organization ranked highest among the key attributes of a successful retrieval program. Further, Executives prioritized record organization and speed of retrieval over the cost of retrieval Executives identified record organization as the most important benefit of a retrieval service, assumedly under the premise that claim professionals can be more effective with organized records, and that it makes sense to not require high-paid professionals to do this essentially clerical function. One corollary indicator that supports this is the finding that 7 out of 10 executives would rather pay a vendor to organize records than to have internal claim professionals do so. We believe this reflects a desire to have claims professionals focused on more valuable activities, such as analyzing the records. Executives appear to recognize that few resources are required to roll-out more formal retrieval programs. In the litigation context, for example, 98% of the executives polled felt that the resources required to roll-out a formal vendor program across their panel counsel would require only a fair amount of resources (1-2 people) or less. Almost half felt that law firms would provide no push back at all. This may help to explain the rapid growth of formal retrieval vendor programs across the industry. CLM Advisors 2016 Page 6

7 Participant Demographics Participant Profile Sixty-six (66) claim organizations participated in this Study, representing a wide range of organizational attributes and all lines of business. So that readers can identify how their own organization compares to this participant pool, we provide this high-level profile of participant organizations: Staff Size Pending Files Litigation Inventory Litigation Spend (YR) Staff Counsel Size of Staff Counsel Average ,610 4,915 $6-40M 33% of Median 60 4,300 1,000 respondents use <20 Attorneys Size of Organization This Study encompassed claim organizations of all sizes, ranging from organizations with just a few claim staff (often overseeing external TPA resources) to those with thousands of claim professionals. The largest participating organization reported 5,000 non-clerical claim professionals. The number of the non-clerical claim staff for all participating organizations averaged 292. The median size of participating organizations was 60 non-clerical claim staff. Pending Claim Inventory Participants were asked to approximate their open, pending claim inventory. Inventory counts ranged from the low hundreds to more than 100,000. The average open inventory was 37,610; the median was 4,300. Roles of the Survey Participants Approximately 60% of the executives who responded to our survey are the most senior claim executive in their organization, holding the titles of Chief Claim Officer, Senior Vice President, or Vice President of Claims. CLM Advisors 2016 Page 7

8 23% of the respondents are in senior technical roles, holding titles of Vice President or Director. The remaining 17% of respondents split equally between roles as Head of Litigation or AVPs of technical areas. Role of Survey Respondent AVP 9% Senior Technical Role 23% Head of Claims / Chief Claim Officer 59% Head of Litigation 9% Pending Litigation Inventory and Legal Spend As expected, participants ranged widely in their open litigation inventory as well. The average litigation inventory was 4,915; the median was 1,000 open files. The majority of participants reported annual outside counsel legal spend at $40MM or less. Approximately one fifth of respondents are spending more than $40MM annually in outside litigation expenses. CLM Advisors 2016 Page 8

9 Annual Outside Legal Fees <$5M 35% >$300M 1% $ M 3% $81-150M 2% $41-80M 15% $6-40M 44% >$300M $ M $81-150M $41-80M $6-40M <$5M Use of Staff Counsel One third (33%) of the participants use staff counsel in their litigation operations. As would be expected with a participant pool this diverse, the number of attorneys used in these staff counsel operations varied widely. However, the majority of responding companies use less than 20 attorneys in their staff counsel operations. >100 Attorneys 14% Size of Staff Counsel Attorneys 14% Attorneys 13% <20 Attorneys 59% <20 Attorneys Attorneys Attorneys >100 Attorneys CLM Advisors 2016 Page 9

10 Current Practices Frequency and Measurement When we launched this Study, we had a core assumption that, in the claims management context, records retrieval is a high frequency activity both generally and on a per-claim basis. We assumed that records of some type (i.e., medical, wage, employment, etc.) are retrieved on most claims. We further assumed that, when records are required on a specific claim, multiple records are generally required. We asked several questions designed to validate this. Retrieval Activity General Frequency The need for records is often line of business specific. Obviously, property claims rarely require medical records. However, given that Study participants were not chosen or excluded by line of business or type of claim, and given that a number of participating organizations specialize in lines of business less conducive to retrieval, the Study s responses actually affirmed a higher retrieval rate than we had anticipated. Sixty-four (64) percent of the organizations reported that they retrieve records on at least 60% of their claims. More specifically, a full 37% reported retrieving records on 90% or more of their files. Almost one fifth (18%) said they retrieve records on essentially every claim. We Retrieve Records on % of Files <10% 13% % 37% 10-25% 7% 60-90% 27% 26-60% 16% <10% 10-25% 26-60% 60-90% % CLM Advisors 2016 Page 10

11 These numbers affirmed our assumption that records retrieval is an activity affecting most claims and in fact, in some cases, all claims. Retrieval Activity Per Claim Frequency We also examined claim executives perception of how many records tend to be ordered on a single claim. Industry data suggest that, on average, approximately seven records are retrieved on the typical claim, and we wanted to test how executives responded that data point. Reaction to Industry Statistic: 7 Records Retrieved on Average Per Claim Sounds Low Sounds High Sounds Right Roughly 60% of responding executives said that this statistic feels about right. Another 12% said that this number is low, and that they would have expected the number of records retrieved per file to be higher. Twenty-nine percent (29%) said that this statistic felt high. Measuring Current Processes Looking at Study data we concluded that claim organizations might estimate the current frequency of their retrievals by following these simple steps: 1. Identify the number of files closed per year both litigated and non-litigated; 2. Multiply that number by an average of 7 retrievals per file; 3. Divide that number by the average lifecycle of the file (multiply for files with average cycle times of less than one year) to reach an annualized estimate. CLM Advisors 2016 Page 11

12 This process for estimating the volume of retrievals may be helpful to many claim organizations, since so few are currently capturing either the number of retrievals or the costs associated with that activity. In our view, this relatively unmeasured but extremely common activity may represent low-hanging fruit for claim executives looking to improve their process or reduce cost. Specifically, 94% of the organizations responding said that they do not capture the number of record retrievals made by their organization. Measurement of Retrievals Per Year Captured 6% Not Captured 94% Captured Not Captured Roughly 70% said that do not capture the amount they spend on retrieving records. Measurement of Dollars Spent on Retrieval Not Captured 69% Captured 31% Captured Not Captured CLM Advisors 2016 Page 12

13 Other Records Retrieval Considerations The Relationship of Retrieval Speed to Cycle Time Given that claims organizations retrieve records on a high percentage of files, and given that many claims organizations focus on cycle time (the time a claim file remains open) as a key performance metric, the Study examined claim executives perceptions about the linkage between the two. In terms of current performance, executives were asked whether how often they feel their claim professionals have to wait for records to come in before the claim can be resolved (closed). Participants clearly identified an opportunity; almost 7 out of 10 (69%) said that they have to wait sometimes or frequently for records before they can close the file. How Often Do You Have to Wait for Records In Order to Close the File? Frequently 50% Rarely 31% Sometimes 19% Rarely Sometimes Frequently CLM Advisors 2016 Page 13

14 Executives were also asked this question: If you could retrieve records more rapidly, do you believe it would positively affect your overall file cycle time? A full 82% of the responding executives believe that more rapid retrieval would have this positive effect. Would Faster Retrieval Improve File Cycle Time? No. I don't believe it would lower cycle time 18% Yes. I believe it would lower cycle time 82% Yes. I believe it would lower cycle time No. I don't believe it would lower cycle time Only 5% of the responding organizations indicated that they have ever measured internal retrieval times (i.e., the number of days required to retrieve an average record. And, when cases are assigned to outside counsel, 100% of the responding organizations said that retrieval time is not measured or captured. One responding organization said that their outside law firms have provided average retrieval times reports, but the remaining 98% have not seen such data from their firms. Getting a handle on current retrieval times may in fact be the foundation to improving those processes and getting to the cycle time improvements that respondents alluded to. Given the importance of cycle time management to most claim organizations, and the commonly held belief that claim payments increase with longer cycle times, the opportunity to secure records more quickly is one that should be examined. Retrieval Activity Costs Internal Staff There are multiple ways to quantify the costs of retrieving records, the most obvious being what the claim organization may be spending on outside vendors, or on the custodian fees CLM Advisors 2016 Page 14

15 themselves. In addition, there is the softer cost of the internal resources (staff) being used to actually initiate and follow-up on retrieval activities. The vast majority of respondents (71%) said that they rely on their claim professional (as opposed to vendors or clerical staff). This underscores the opportunity to measure the true costs associated with these internal resources. Resources Used to Retrieve Records (Non-Litigated) Outside Vendor(s) 17% Clerical Staff 12% Claims Professional 71% Claims Professional Clerical Staff Outside Vendor(s) Study participants were asked whether their organization had ever conducted a time-andmotion study to quantify the cost of internal staff involved in the retrieval process. 97% of the participants said that they have not had such a study. To help understand the level of hidden costs associated with the use of internal staff in the retrieval process, executives were asked this question: On an average day, what would you estimate the percentage of time your claim professionals spend on activities related to ordering, tracking down, and following up on record retrieval requests? The average response given was that 12% of a claim professional s day is spent on retrievalrelated activities. This is a significant number and bears some emphasis. Executives can extrapolate these numbers to gain a sense for how resource-intensive this activity can be. CLM Advisors 2016 Page 15

16 Assuming a 2,000 hour FTE role, 12% of this is 240 hours per year, multiplied by the number of claim professionals involved in the activity. In short, claim leaders might consider how this time might be freed up to focus on activities more relevant to the affirmation of coverage, analysis of liability and exposures, and to resolving the claim itself. Calculating How Resource-Intensive Records-Retrieval Can Be 2,00 hour FTE x 12% = 240 hours per year x Number of claims professionals = Significant Resources Answers to this question ranged from.5% to 40% (assumedly related to line of business and type of claim involved). However, the percentage of time estimated averaged 12% and the median response was 10%. These are significant numbers, and underscore the relevance of measuring, understanding, and managing these activities. When asked how they felt about the percentage of resource involvement indicated in their answers, executives clearly see an opportunity to reduce this time, or at least were of the opinion that they would like to reduce it. 46% of respondents said they feel that the claim professionals time involved in retrieval is too high and that they would like to reduce it. Do Claims Professional Spend Too Much Time on Retrieval Activities? It's about right. I feel no need to reduce it 54% Yes. I'd like to reduce it 46% Yes. I'd like to reduce it It's about right. I feel no need to reduce it CLM Advisors 2016 Page 16

17 For almost half the respondents, exploration of third-party services to perform the retrieval function may be an easy path to accomplish the objective of reducing the time-consuming burden that retrieval requirements create for claim professionals. Retrieval Costs When Law Firms Retrieve When claims are assigned to outside counsel retrieval activities are most frequently performed by the law firm (54%). Fifteen (15%) percent of the organizations said they rely on retrieval vendors to obtain records in litigated claims; 31% said their internal staff obtain records and send them to counsel. This reliance on counsel represents the potential for significant cost shifting, as law firms look to be compensated for their time and effort in obtaining the records they need. We were particularly interested in determining whether claim organizations have any visibility into these costs. Interestingly, approximately one quarter (26%) of the organizations polled specifically prohibit firms from billing for retrieval activities. That is, in their billing guidelines for firms, these organizations have treated time spent retrieving records, regardless of the timekeeper level involved, as a firm overhead cost. Do You Allow Firms to Bill for Time Spent Retrieving Records? Yes. We Allow This 74% Not Allowed 26% Not Allowed Yes. We Allow This CLM Advisors 2016 Page 17

18 This prohibition on billing for retrieval generally extends to actually working with the custodian of records to secure the records themselves (i.e., pure retrieval time). However, once received, most billing guidelines allow the firm to charge for organizing the records, and for summarizing them. Importantly, 90% of the respondents said that they have never analyzed their law firm invoices to see what their firms are charging to retrieve records. As the 10% of organizations that have done this analysis know, such analysis can be difficult to perform, given the lack of a uniform coding system for this activity. In our view, there are two corollary considerations for claim organizations when so little transparency exists into this cost item and when firms are not allowed to invoice for the activity in the first place. First, the lack of visibility into law firm retrieval activities make it difficult to determine how much longer a litigated file is dragging on based on certain retrieval efforts. Second, when invoices don t even list the activity, it makes it difficult for the file handler to determine precisely when and which specific records have been ordered or retrieved. Both of these problems can potentially be solved by using a retrieval vendor with better reporting and more transparent activities. Given the high lack of transparency into retrieval costs for most claim organizations, we wanted to test whether claim executives perceive these costs to be as high as some data points suggest Could Retrieval Costs Be the Second Highest Area of Controllable Spend After Legal Fees? No, this seems high 60% Yes. I agree 40% they are. Specifically we asked each executive whether they believe that retrieval costs are the second highest area of controllable litigation expense, after legal fees. A full 40% of the executives agreed with this assertion (the remainder felt that that premise seemed high to them). Yes. I agree No, this seems high CLM Advisors 2016 Page 18

19 What Executives Want In Their Retrieval Process Accuracy, Speed and Cost Each executive was asked to rank on a scale of 1-5 how important they believe it is to retrieve: 1. the right record 2. as quickly as possible 3. as cost-effectively as possible The median responses suggest that accuracy is the most important attribute of the process, followed by cost and then speed. Median Score Accuracy 5.0 Speed 4.0 Cost 3.0 Allocated vs. Unallocated We were also interested in whether claim executives prefer that the total cost of their retrieval process be handled as an allocated or unallocated adjustment expenses. Those organizations who use external vendors for retrieval do so on an allocated basis, while those using internal staff to obtain records leave the majority of the retrieval cost (staff time) in the unallocated bucket. More than 7 out of 10 prefer an allocated categorization. 12% prefer unallocated, and for 17% it simply doesn t matter which bucket the expense falls into. Preferred Categorization of Retrieval Costs Unallocated 12% It Doesn't Matter 17% Allocated 71% Allocated Unallocated It Doesn't Matter CLM Advisors 2016 Page 19

20 Records-Related Activities That Executives Would Prefer Claims Professionals Perform Or that They Are Willing to Pay Counsel to Perform Claim executives were asked to rank several records-related activities and to prioritize which are most important for the claim professional to perform. They were also asked which recordsrelated activities they are most comfortable paying for when it comes to litigated files assigned to counsel. There are three primary areas of records-related activities presented were: 1. Retrieval (the process of securing the records) 2. Organization (putting the records into a usable order and format); and 3. Analysis (interpreting and analyzing the information within the records. Not surprisingly executives ranked these three functions identically for both internal staff and counsel. Executives prioritized analyzing over organizing and organizing over retrieving. This will come as no surprise to those who recognize that it is the analysis itself that adds the greatest value to the claim process. This suggests that, for claim professionals with limited time, and for counsel whose time is expensive, organizations may wish to free-up or eliminate the retrieval and organizing time, so that more time can be spent on analytical activities. Formal Retrieval Vendor Programs One quarter (25%) of the respondents reported having a formalized panel of pre-vetted, preauthorized retrieval vendors. The number of vendors in these programs ranged from one (exclusive) to 10; however, the median number of vendors in the programs was 2. Most have had a vendor program for records retrieval for 5 years. Responding executives find good value in these programs, giving an average score of 3.3 on a 1-5 scale. CLM Advisors 2016 Page 20

21 Desired Vendor Features and Attributes Participants were asked to rank several important features and services offered by record retrieval companies. These ranged from: 1. National Presence the ability to support retrieval work across the nation 2. Subpoena Process the ability to support the subpoena process 3. Records Repository offering an online repository for records access and storage and the ability for claims professionals to have immediate access to the records when they are retrieved. 4. Online Ordering and Alerts the ability to order online and to receive alerts when records are received 5. Secure Records Collaboration the ability to share select records with counsel and experts 6. References the importance of offering references from similar-type claim organizations 7. Organization Services the ability to organize records chronologically by type of records 8. Paperless Bookmarks the ability to hyperlink bookmarks for access to specific records Respondents ranked the relative value of these attributes as follows: MOST IMPORTANT RECORDS RETRIEVAL PROGRAM FEATURES (Tied for First) Secure Records Collaboration (sharing with experts) Organization Services (use of records more effective) Paperless Bookmarks (faster navigation) CLM Advisors 2016 Page 21

22 ADDITIONAL IMPORTANT RETRIEVAL FEATURES (Ordered by Rank) Online ordering and alerts References Subpoena Process National Presence Records Repository Each executive was also asked to rank four possible benefits of a Records Retrieval Program, in terms of their importance. The findings were as follows: VALUE RANKING RECORDS RETRIEVAL PROGRAM BENEFITS 1 Organization (i.e., makes the use of records more effective) 2 Speed (i.e., records come in faster) 3 Cost (i.e., we will spend less overall on this activity) 4 Improved Resource Allocation (i.e., frees up claim professionals to do more important things) Record Organization Services The identification of organization services may reflect how frustrating it is when those retrieving records receive a large pile of unorganized documents from the records custodian. The effort required to organize the records is often seen to be a waste of time for internal staff. That said, there can also be a cost to having a third-party organize the records. CLM Advisors 2016 Page 22

23 With that thought in mind, we asked participating executives the following question: Would you rather have your internal claim professionals spend time organizing the record, or would you prefer to pay the retrieval company to organize the records? For both non-litigated and litigated files alike, approximately 7 in 10 said that they would prefer to pay the retrieval company for this service. This may reflect how valuable these executives find the time of their internal staff to be. In the case of litigated claims, we presented the following three choices: 1) Pay the law firm to organize the records; 2) Pay the retrieval company to organize the records, or 3) Have our internal staff organize the records. Again, approximately 7 out of 10 executives indicated the retrieval company was the best resource to do this organizing work. Who Would You Prefer Organize the Record? (Non-Litigated) Retrieval Provider 69% Internal Staff 31% Internal Staff Retrieval Provider CLM Advisors 2016 Page 23

24 Who Would You Prefer Organize the Record? (Litigated) Law Firm 18% Internal Staff 15% Retrieval Provider 67% Internal Staff Retrieval Provider Law Firm Challenges to Record Retrieval Program Implementation Roughly 25% of the responding organizations report already having a formal records retrieval vendor panel in place. Industry-wide, those figures are higher. Given that fact, we were interested in these executives perceptions about how complicated it is to implement a formal records retrieval program across panel counsel. The respondents answered as follows: Response Percentage 40% 57% 3% Answer Not Complicated at All Our firms are accustomed to our telling them which vendors to use for non-legal work. Almost no firms would push back. Somewhat Complicated We would anticipate some pushback from our law firms if we did this. Very Complicated Our law firms are not accustomed to our telling them what vendors to use in this service area. Most of them would push back pretty hard. CLM Advisors 2016 Page 24

25 For those executives considering a new retrieval program, or the use of new retrieval vendor resources, we also asked each executive how resource-intensive they perceived an implementation process to be. There answers were as follows: Response Percentage 41% 57% 2% Almost No Resources We could simply tell the vendor who our panel counsel are and the vendor would take care of the rest. A Fair Amount of Resources I envision that 1-2 people would be needed to oversee a roll-out across our panel counsel, at least in the beginning A Lot of Resources I probably would want an entire team involved in any new project that affected our panel counsel Conclusions We believe this Study s data reflect that the analysis and improvement of a claim organizations records retrieval function will potentially yield low hanging fruit for claims executives who wish to improve their processes, save money, and deliver high ROI. Records retrieval is an exceptionally high volume activity for claim organizations. Almost 40% of the organizations surveyed believe that they retrieve records on 90% or more of their files and almost one fifth (18%) believe they retrieve records on all their files. Further, most agreed that, on average, they retrieve at least 7 records on each file. Yet most organizations have minimal transparency into how many resources are required to retrieve records, the cost of those activities, or even performance metrics related to how quickly records are retrieved. At a minimum, we believe these data points would help all organizations, given how prolific the activity is. Measurement and improvement of retrieval processes may lead to dramatic improvements in the claim management process. Survey respondents believe that current retrieval activities may consume up to 12% of a claim professional s day. In the context of litigated claims, almost half of the executives agreed that records retrieval costs may be the second highest area of controllable litigation expense, after legal fees. CLM Advisors 2016 Page 25

26 Across larger portfolios of claims, an executive s ability to reduce or eliminate the internal resources currently allocated to retrieval activities could lead to significant cost savings. At a minimum, shifting these activities to more cost-effective vendors or partners will free up time for claims professionals to do more valuable work. Possibly more important, however, was the Study s finding that claim leaders see a clear correlation between faster retrieval and lower file cycle times. For organizations that measure and value their ability to close files quickly and effectively, slow retrieval can be an obstacle. In today s environment, few claim organizations measure retrieval performance, either by their own staff or by the more expensive outside law firms to whom they ve delegated this function. Yet almost 7 out of 10 agree that they frequently or sometimes have to wait for file closure while records are being retrieved. Given the importance of overall file cycle time to most organizations, this may be a significant issue. The Study affirmed a core assumption, that the actual retrieval process is the least valuable of several records-related functions within a claim organization. Not surprisingly, claim executives stated unequivocally that analyzing the records is the most important records-related activity, followed by the proper organization of records. To that end, executives also indicated their support for having third-parties organize records so that their own internal claim professionals could spend time on more valuable activities. In terms of the core benefits of a formal retrieval program, cost was identified as third-most important, behind the benefits of more organized records and the speed of retrieval. At the same time, executives appeared to recognize that few resources are required to put a formal retrieval program in place. Almost all executives felt that 1-2 people, or less, might be required for a short time in the beginning of such a program, and that very little pushback would be expected from their defense firms. In summary, we believe these findings support our recommendation that claim organizations of all sizes do a deep dive into their retrieval processes, in order to quantify their current retrieval costs, the resources they currently allocate to this process, and their retrieval performance metrics. With this information in hand, organizations are likely to find more cost effective and higher-performing options in the marketplace. CLM Advisors 2016 Page 26

27 About CLM Advisors CLM Advisors is the consulting and advisory arm of the Claims and Litigation Management (CLM) Alliance, and organization of 30,000 members and fellows focused on promoting and furthering the highest standards of claims and litigation management. We provide advisory, market intelligence, and talent acquisition services including the provision of industry surveys such as this one. Any questions about this survey can be directed to: Taylor Smith President, CLM Advisors CLM Advisors 2016 Page 27