Chapter 9 · The Great Differentiator
How to Lower Your Expenses
Today, it's virtually impossible for mass tort lawyers to know where to effectively allocate their TV advertising dollars without the assistance of data-driven guidance.— Jacob Malherbe, X Social Media
The most successful mass tort lawyers in our industry don’t just accept change, they harness it to their advantage. Show me a lawyer, regardless of their field, who’s content to sit back and run their business the same way they did five or ten years ago, and I’ll show you a lawyer on the wrong side of the digital revolution.
Th ere’s no reason to deny it: Th e legal industry is in the throes of a radical transformation, which will reward those who outsource legal services to experts instead of blindly following tradition and keeping them in-house.
Now, more than ever, lawyers need to generate the maximum number of efficiencies—throughout every single phase of a mass tort—if they hope to prosper. Th is is, of course, the stuff Business 101 courses are made of. Less time spent. More clients found. Fewer costs incurred. Greater profits realized.
That’s the equation worth striving for, but it’s a difficult goal to achieve if you (A) fail to compute your cost-per-client numbers with pinpoint accuracy or (B) refuse to adopt a holistic outsourcing strategy that leans on top-tier vendors capable of driving your costs.
If I’ve learned anything over the years, it’s that a surprising number of legal practitioners are absolutely lackluster—if not awful— businessmen and businesswomen. This is the result, in large part, of undervaluing the importance of generating efficiencies throughout the life cycle of a given tort.
It comes down to this: The more you can focus on doing what you do best (i.e., using your legal talents to represent your clients), the better off both you and your clients will be in the long run.
The best mass tort legal vendors are all committed to the same primary goal: providing time- and money-saving legal services at a fair price. We help lawyers optimize their operations by taking work and responsibilities off their desks and transferring them onto our own. To put it another way, we excel at transforming hard costs into soft ones.
Consider, for example, your hard costs (i.e., your fixed financial responsibilities). Do you, for example, employ an internal team of back-office workers to find clients, handle intake responsibilities, vet leads, and keep in contact with them as a mass tort proceeds to settlement? If so, have you assessed how efficient they are at handling all of these responsibilities?
Consider the expense of continually employing an internal team, especially given the variability of your typical mass tort business model. Try performing the following quick audit:
No . 1: Grade the appropriate size of your staffing levels over time . If you require X number of employees to handle a complex mass tort, do you really need the same number of employees when you pivot to a less complex set of cases? And if you do, what are you tasking them to do in the fallow periods between the action?
No . 2: Precisely calculate your exact cost-per-client rates . For many lawyers, adopting accurate accounting measures to assess the work being done in-house can be an inexact science at best. Can you assess, with absolute precision, how much time was required for your team to find, call, and retain each of your individual clients? If you can’t, you’re likely wasting valuable money and resources.
No . 3: Determine how much time is being spent handling small tasks . The time and money spent handling menial tasks can quickly add up. Consider the number and variety of seemingly small tasks that can take up a lot of time. Responsibilities like preparing and mailing letters, inputting client information into your database, accessing and surveying medical records, monitoring liens, and fielding any and all client concerns as cases ramp up. Chances are the best you can do is give a rough estimate as to how much time is spent on each of these responsibilities, which prevents you from calculating your true costs.
No . 4: Assess whether these costs are being charged back to your clients . If internal teams handle these menial tasks, you’re unlikely to be able to charge those costs back to your clients because they must be classified as in-house expenses. Thus, you lose both ways. You’ve incurred costs that can’t be reimbursed, and you’ve failed to nail down the individual cost basis for each client.
All that uncertainty—not to mention nonreimbursable income— disappears when you partner with outside vendors. This can take many forms. You can hire advertising firms to find clients. Use call centers to vet potential clients. Work with outside legal specialists to work up cases. Or partner with a lender who can help you fund your mass tort docket. All of these responsibilities can—and should—be contracted out if you want to maximize your profits.
Skilled mass tort vendors, like the ones who’ve contributed to this book, will document precisely how much their services will cost you so you can possess absolute cost clarity. These fees should all be laid out in an invoice, which is all the proof you’ll need to charge those fees back to your clients and deduct them from their overall settlement.
Charging clients for services rendered is not only ethical but your vendor invoices make these charges transparent. Clients can view your attorney fees as well as a complete breakdown of your expenses.
The result? Efficiencies are gained. Clarity is found. And money is saved. In any business, that’s a difficult trio of benefits to ignore.
It’s more proof that data is power, especially within the legal field. Let’s say you finally determine that your legal services fees represent 40 percent of the overall costs required to retain and represent a client. Now, you have a starting point. You know what number you have to dip below in order to improve your ROI.
Let’s say you cut those fees down to just 25 or 30 percent per client by outsourcing some of your work. You can simply pocket the difference, pass those savings back to your clients, or pour that extra savings back into finding additional clients earlier, at reduced advertising rates, thereby generating larger settlements moving forward.
The last two options benefit everyone in the long run, as they allow you to cater to the base of the client triangle, where most potential clients are located, rather than just mining from the tip.
Price points matter. Imagine, for a moment, that you are a car manufacturer. If you sell a car for $100,000, your potential pool of buyers is small. But if you find a way to sell your cars for just $50,000, your available client base doesn’t just double; it quadruples. If you manage to reduce the price of your next car down to say $30,000, you can now cater to everyone who’s in the market for a new car. That same principle applies to mass torts.
It’s all about speed, skill, and efficiency, which can be achieved by creating a comprehensive outsourcing plan.
If you’re new to the mass tort field, utilizing a vendor will dramatically reduce your initial investment costs and vastly improves the likelihood you’ll succeed in your early cases. If you’re already established in the space, using a vendor will help generate efficiencies.
But as you will see, the more you can do to create a comprehensive and highly coordinated outsourcing plan, the quicker and more efficiently you can grow your business and help greater numbers of victims find justice under the law.
The Power and Appeal of Facebook Advertising Let’s take outsourcing client leads, for example, which is what we do at X Social Media. Simply put, we help lawyers find mass tort clients by leveraging the power of Facebook and Facebook advertising.
Prior to our arrival, mass tort lawyers used to spend great bundles of money producing and placing ads that rarely reached their intended audiences. They used all sorts of different mediums. Television ads. Giant billboards. Print ads in magazines. Mass tort lawyers spread their ads far and wide, praying that they’d connect with someone who might—and I do stress might—qualify for the particular mass tort in question.
These campaigns relied on antiquated advertising strategies and advertising mediums. Questions abounded. Which magazine should we advertise in? Which broadcast TV shows do we advertise on? And which intersection or highway should be chosen for billboard ads?
More often than not, the results were both expensive and ineffectual. It was like spinning a roulette wheel. Too many variables. Too many options. Too few hits. Cost-per-client and conversion rates were all over the place, lacking cohesion or regularity.
Our particular approach is quite different. As I’ve mentioned before, we’ve built a kind of digital funnel. Attorneys have to do virtually nothing, except set an advertising budget. It’s pure plug and play. Advertising dollars are fed into our funnel, and potential new clients come out the other end. It’s the closest thing to a white-glove service you’ll ever find in this space.
Our model is built on a very specific order of operations, which begins by sitting down with clients and ironing out their objectives. Here is a short outline of what we handle.
• Retainer Agreements: If you are a referring lawyer seeking a trusted co-counsel partnership, we help facilitate those relationships by connecting the two parties via email. If the proposed match works, it’s up to the referring lawyer and trial lawyer to iron out a fee structure and retainer agreement. Contracts are sent to each party, and everyone signs on the dotted line. This is a necessary step because potential new clients must know all the attorneys who are attached to their case. • Landing Pages: Whenever Facebook users click on one of our customized ads, they are directed to what we call a landing page, which is an outside website that allows them to fill out a lead form and provide their contact information. We build customized landing pages for our clients, which often include their logo, principal address, and any necessary disclaimers.
Once our clients approve that landing page, they have to submit them, if required, to the state bar for approval. We then help them craft an appropriate advertising budget to reach potential clients. • Referrals: Although we will delve more deeply into the importance of client vetting and intake centers within ensuing chapters, it’s important to note that we strongly suggest our clients also contract with experienced call centers. These vendors ensure that the potential new clients (PNCs) that we have just found not only qualify for the tort in question but are properly signed up with the firm as quickly as possible. • Targeted Facebook Ads: The particular ways we leverage
Facebook to find potential clients is worthy of its own discussion and will be outlined in detail in the subsequent chapter. Nevertheless, it’s at this point in the process that ads—whether static or video-based—are created and then strategically slipped into the feeds of Facebook users whose interests, background, location, or behavior has shown them to be potential clients. It’s our ability to quickly target the right Facebook users, encourage them to sign lead forms on our landing pages, and then use those PNCs to find additional groups of potential clients (called look-alike audiences) that makes our service so effective.
• Real-Time Feedback: As we accumulate and curate data and fresh insights, we immediately pass those insights onto our legal clients. We assess the strength of the questions posted on the landing page, including how many potential leads are either qualifying or being disqualified via the landing pages. We then give our clients access to a dashboard maintained by X Social
Media, which allows them to track their advertising spend in real time, as well as every potential lead. Should a client contract with an intake center, they can also see how many PNCs have been formally signed as well as other hard data, including cost per lead, cost per case, and conversion rates.
As this timeline suggests, our model not only accelerates how quickly you can find clients but it completely eliminates the peckand-hunt approach that mass tort lawyers were forced to use in the past. It’s not a shotgun approach; it’s a sniper-based model, complete with a high-powered scope and infrared targeting. It’s customizable, transparent, and highly automated.
It eliminates the variability that occurs within lesser models. In the past, law firms struggled to determine where and when to allocate their second round of advertising dollars because the results were usually scattershot. Week one results could differ greatly from week three results, calling into question which strategy worked best. That’s not a problem we have to deal with because our process bolsters our ability to find clients over time instead of fragmenting it.
One essential fact remains: The money mass tort lawyers spend on advertising should net an impressive return. The math doesn’t lie. Let’s say you spend $1,000 on advertising to find Client A, and Client
A wins $100,000 in a settlement, you’ve just earned $40,000. That’s a serious return, even if it takes anywhere from four to eight years for the average mass tort case to reach settlement. That, by any objective criteria, is money well spent.
How to Build a Comprehensive Outsourcing Strategy and the Importance of Vertical Integration I happen to believe that using targeted Facebook advertising is the single most effective and cost-saving advertising strategy for most mass tort cases. But no matter what advertising strategy you choose to pursue, few could argue that outsourcing PNC advertising to a vendor is one of the prime differentiators between successful firms and suboptimal ones.
When a mass tort has been successfully settled, X Social Media delves deeper into the data to calculate something we refer to simply as yield. In the mass tort field, yield is defined as how many individual cases have become compensatory. How many victims were paid out in the end? Of course, you can’t nail down that number until a mass tort has been settled, but the average yield for Facebook client advertising vastly outperforms other models.
Yield is not simply a product of the speed and number of potential new clients that we hand-deliver to mass tort attorneys. There are other factors at play, including how those potential clients are screened and how effectively lawyers work up and try individual cases or the collective bundle of cases in the MDL.
At X Social Media, we pride ourselves on finding the greatest number of high-quality clients at the quickest and least expensive rates. But we also realize we are just one piece in a vast mosaic of interconnected parts, which collectively serve the unique needs of mass tort plaintiffs.
Which is why we feel a responsibility to provide all of our advertising clients with free consulting services. Clients tend to see this as an added perk, but we see it as an essential facet in ensuring they build the most efficient and overall profitable strategies possible. Here is an abbreviated list of some of the key questions we ask clients when we sit down for a consultation.
Is a Facebook ad campaign best suited to finding the particular clients you are looking for? For instance, if a law firm approaches us hoping to find PNCs for a mass tort involving JUUL e-cigarettes, we wouldn’t hesitate to tell them that they should launch a Snapchat or YouTube campaign rather than advertise on Facebook. Why? Because we’ve studied the data. We know that the people who qualify for a JUUL mass tort are likely to be young smokers who spend most of their free time on certain social media platforms. Given the growth that X Social Media has enjoyed, we have been able to hire individuals who can lead Snapchat or YouTube campaigns, but those platforms are not our main focus.
We are more than willing to direct our law firm clients to advertising agencies that specialize in other platforms because we know that once they leverage Facebook and digital TV advertising, they’ll never turn back. In our mind, that’s just good business: Direct your clients to vendors who will provide them the best overall value for their advertising dollars.
Is a client pursuing the right mass tort at the most optimal time? Thanks to our relationships with mass tort lawyers across the country, we can help clients determine which mass torts should be joined at a given time. Let’s stick with JUUL for a moment. Let’s say a law firm client tells us that they want to find e-cigarette PNCs, even though the deadline for signing clients for that particular tort is months away. In most cases, the better approach would be to allocate those advertising dollars to a more mature mass tort—perhaps the Boy Scouts—earn a 7X settlement there, and then redistribute some of those profits into JUUL. These timing strategies not only optimize rates of return but they also speed up how quickly those returns are realized.
Many mass tort lawyers fail to take into account what we call “time to money” (i.e., how long it will take for a given mass tort to reach a settlement). If you invest in a mass tort that’s four years from settlement, you can claim a piece of that pie early, then quickly pivot and reinvest in a different tort that may be six or eight years away.
Many mass tort lawyers fail to take into account what we call “time to money” (i.e., how long it will take for a given mass tort to reach a settlement).
If you are an acquisitions lawyer, are you partnering with the best available cocounsels and tier-one lawyers? Acquisition lawyers are certainly free to partner with their preferred co-counsel, but there is a stark difference between working with a friend down the street and working with a proven mass tort trial lawyer who is either spearheading the MDL or is in a leadership position on a plaintiff steering committee.
Given our position and reputation in the industry, we have developed an impressive network of connections. Sometimes, all it takes is a single email, sent to a well-respected lawyer, for a new and lucrative partnership to take root. It’s the reason why some of the most highly respected mass tort lawyers in the country have contributed to this book. They trust me, and I trust them. We share a similar set of values and a commitment to serving our clients, which is exactly the kind of lawyers you want by your side when you go into a courtroom.
Have you outsourced enough of your legal services, and have you outsourced that work to the best available vendors? I can’t overestimate how important this step is to all mass tort lawyers— whether you’re a new or seasoned lawyer, a trial lawyer, or an acquisitions lawyer. If you want to optimize your advertising spend and reduce the cost of finding and retaining clients, this is the way to do it.
Some lawyers and law firms stubbornly hold firm to the belief that they can vet their PNCs in-house, work up their own cases, gather all the necessary client medical records, and handle any and all lien resolution issues that may arise.
Let me be clear in saying that there are few law firms with the experience or know-how to handle these tasks correctly or efficiently. One mistake, in any of these areas, will not only wreak havoc on the overall mass tort but also hamper the ability of victims to find justice.
Consider for a moment what happens after a PNC fills out a lead form. Someone has to immediately contact that individual, delicately ask questions in a way that ensures they are not only right for the mass tort but are not lying, and then ensure they are properly retained.
If a PNC says they took Zantac and developed intestinal cancer, are you capable of proving that’s the case? Furthermore, do you have a team that is diligent enough to stay in contact with clients and provide them relevant updates or field their questions?
I’m particularly passionate about this issue because of what I experienced after the BP Deepwater Horizon oil spill in 2010. I estimate that some firms lost over 15 percent of their cases simply due to an inability to keep up with client-handling needs.
In short, customer relationships matter. And they matter more today than ever before because of the proliferation of new technologies.
We encourage all of our clients to contract with professional intake centers—organizations like Legal Conversion Center, which has contributed to this book—because even in a best-case scenario, between 20 and 40 percent of people who fill out a lead form will either lie or inadvertently misrepresent their stories.
We recommend lawyers outsource casework responsibilities to trusted companies like Case Works because they know how to cross all the t’s and dot all the i’s. They will call your clients on behalf of your firm and extract the truth, while keeping everyone informed regarding the status of the case.
They bolster the reputations of new mass tort lawyers because they do the legwork required to find medical records that validate whatever story was expressed over the phone. They do all the things required to ensure a client and a case is in good standing, including monitoring statutes of limitations so you don’t find yourself staring down the barrel of an unexpected malpractice suit.
We encourage our clients to partner with lien resolution specialists because if a settlement is awarded to your client, but it turns out that money is owed to a hospital or other organization, you as their lawyer are responsible for ironing out those issues. Lien specialists know how to contact hospitals and negotiate those liens down so that your client takes home the most from their settlement and you receive your contracted attorney’s fees.
Suffice to say, everyone on the plaintiff-side of a mass torts is connected in some form or another. We’re in this together. We don’t have the luxury of any weak links. If anything, it’s our job, as vendors, to identify those potential weaknesses and iron them out for the betterment of everyone involved.
These holistic vendor strategies also pay additional dividends for advertisers like us because it gives us a three-dimensional view of what is happening with your money. It allows us to see the whole board with unparalleled clarity.
A lawyer who works with a professional intake center is matching one ultraefficient streamlined operation with another. If we, as Facebook advertisers, can see which PNCs are being converted into quality clients, we can nail down vital metrics like your cost-per-case and conversion rates.
Once our team at X Social Media identifies PNCs who qualify for a tort, we can find substantially more clients for you at lower costs. When our clients use other outside vendors, our funnel becomes just one element in a well-oiled and intricate mass tort assembly line. Advertising dollars turn into larger and larger stacks of PNCs. You can then take those forms, feed them into the screening system created by Legal Conversion Center, and filter out any unworthy clients.
Then, following along with our assembly line analogy, those vetted clients are triple checked and prepared for an MDL by Case Works. Now you have first-rate clients you can bet on. Hand-chosen, vetted, and ready for settlement. Pack an MDL with those kinds of clients, and you have a rock-solid MDL.
Strong MDLs ensure airtight bellwether cases, and strong bellwether cases generate early victories and settlements, which in turn, pressures the defense to strike deals. From there, victims are awarded settlements and mass tort plaintiff lawyers are awarded attorney’s fees.
All of which is a direct product of the increased efficiencies generated by outside vendors.
Suffice to say, everyone on the plaintiff-side of a mass torts is connected in some form or another. We’re in this together.