The Commodification of Insurance Defense Practice*

I. INTRODUCTION

There is a vibrant and growing empirical (and theoretical) literature regarding the plaintiffs' bar in the United States.1 Much of this research has focused on the implications of the contingency fee structure for the work of lawyers representing individuals who pursue injury and other kinds of monetary claims. The interest in this work reflects both the growing political salience of the plaintiffs' bar and the argument that the contingency fee structure may create perverse incentives that produce significant conflicts between lawyers and their clients, and between lawyers and societal interests.

In contrast, there is relatively little research, either empirical or theoretical, focused specifically on the lawyers who routinely stand opposite the plaintiffs' bar: the insurance defense bar. Laurence Ross has written a seminal book on claims adjusters.2 However, while Ross discusses the adjusters' relationships with claimants' lawyers, he does not discuss adjusters' relationships with outside counsel hired by the insurance company to represent insureds once a claim is in suit.3 There is also some theoretical and empirical literature related to hourly fee arrangements,4 which are the dominant way by which insurance defense lawyers charge for their services, but that literature does not focus on lawyers doing insurance defense work.6 And there is at least some recent interest in the implications, particularly the legal and ethical implications, of shifts in insurance defense practice toward alternative billing arrangements and the use by insurance companies of in-house or captive-firm counsel.6 However, none of the past work provides a good empirical or theoretical picture of insurance defense practice, either as it might have existed thirty to forty years ago or as it now exists.