Not every law firm operates with the same strategy when it comes to the market for personal injury claims.
While some attorneys pride themselves on taking on complex cases and fighting for maximum compensation, others have adopted a different approach — one that prioritizes high volume and quick settlements.
But why do some law firms choose this path? Chris Mova, founder of the California-based personal injury law firm Mova Law Group, gives his thoughts on the reasons behind this controversial practice from his point of view as an industry insider.
The Volume Business Model
At its core, the volume-based approach to personal injury law is a business model. These firms operate on the principle that handling a large number of cases, even if each settles for a relatively small amount, can be more profitable than taking on fewer, more complex cases.
“Other law firms do not squeeze every ounce of money out of each of their client’s cases,” Mova says. “They settle for cheap just so they can move onto the next case — they are in the volume business.”
Quick Turnover and Cash Flow
One of the primary motivations for pursuing a high-volume strategy is the desire for quick turnover and steady cash flow. By settling cases early, these firms can:
- Reduce the time and resources invested in each case
- Maintain a consistent influx of settlement funds
- Take on new cases more rapidly, keeping their pipeline full
This approach can lead to a more predictable revenue stream, which can be attractive from a business management perspective.
Minimizing Risk and Overhead
Fighting a case through to trial or engaging in prolonged negotiations carries inherent risks and costs. By settling early, volume-based firms can:
- Minimize the risk of losing cases at trial
- Reduce overhead costs associated with lengthy litigation
- Limit the amount of staff and resources needed per case
Marketing and Referrals
High-volume firms often invest heavily in marketing to maintain a steady influx of new clients. Their business model relies on continually acquiring new cases to replace those that are quickly settled. This approach can lead to:
- Aggressive advertising campaigns
- Emphasis on brand recognition over individual case outcomes
- A focus on quantity of referrals rather than quality of cases
The Trade-Off: Potential vs. Certainty
The volume-based approach essentially trades the potential for larger settlements for the certainty of smaller, quicker payouts. While this may benefit the firm in terms of steady cash flow and predictable operations, it raises questions about whether clients are receiving the full compensation they deserve.
Mova points out the potential downside for clients: “They settle for cheap just so they can move onto the next case.” This approach may leave money on the table that a more thorough, patient strategy might have secured for the client.
Efficiency vs. Thoroughness
Proponents of the volume-based model might argue that it allows for greater efficiency in the legal system. By settling cases quickly, they can:
- Reduce court backlogs
- Provide clients with faster resolution to their claims
- Handle a larger number of cases, potentially serving more clients overall
However, critics like Mova suggest that this efficiency comes at a cost. “In my office, a case isn’t just one of a thousand competing for time and expertise. It’s one of 70 or 80, which allows for much more attention to detail,” he explains, highlighting the trade-off between quantity and quality of representation.
The Impact on Client Outcomes
The volume-based approach raises important questions about client outcomes. While clients may receive settlements more quickly, they may not be getting the full value of their claims. This is particularly concerning in cases involving:
- Serious injuries with long-term consequences
- Complex liability issues
- Defendants with deep pockets who might pay more if pressured
A Changing Landscape
As awareness grows about the potential drawbacks of volume-based practices, some clients are seeking out firms that take a more personalized, thorough approach to each case. This shift may be driven by:
- Increased client education about their rights and the potential value of their claims
- High-profile cases where persistence led to significantly larger settlements
- Growing criticism within the legal community about the ethics of prioritizing volume over individual client outcomes
Reduce on Stress and Burden for Clients
In the aftermath of an accident, clients need physical recovery and consider what can be recycled or reused after the accident. However, it’s essential to recognize the emotional and mental stress that accompanies such an event. When a claim or court case is added to the mix, the situation can become overwhelmingly stressful.
By taking on the legal responsibilities, a lawyer allows you to step back from these stressors and concentrate on your recovery. You can put all complicated things into the trash cans. In stead, a lawyer handles various legal aspects, including:
- Collecting Evidence: Gathering necessary documentation and proof to support your case.
- Dealing with Paperwork: Managing and filing all required legal documents.
- Communicating with Relevant Parties: Contacting insurance companies, witnesses, and other involved parties.
This professional support system brings peace of mind, assuring you that the legal process is being expertly managed. This way, you can focus on healing, knowing that your case is in capable hands.
It’s a Balancing Act
The practice of law, like any business, requires a balance between profitability and client service. While the volume-based model has its place in the legal landscape, it’s crucial for potential clients to understand the trade-offs involved.
As the legal market evolves, firms may need to reassess their strategies to ensure they’re providing the best possible outcomes for their clients while maintaining viable business models. Ultimately, informed clients who understand these different approaches will be better equipped to choose representation that aligns with their needs and values.
