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Official Magazine of the Denver Bar Association

Marketing Through Malpractice

 

Back when I was a practicing workers’ compensation attorney, I represented a very pleasant woman who had the misfortune of having been injured on the job. The case went along for a few years in normal fashion, and then it came time to discuss settlement with the workers’ compensation insurance company.

Now, Colorado workers’ compensation benefits are subject to what are called “caps.” Caps are the maximum amount of money an injured worker can recover for permanent impairment. Incongruously, sometimes this means that the more seriously a worker is injured, the less money he or she can receive for any resulting permanent impairment. When pondering this bizarre reality, it is sometimes helpful (although perhaps not comforting) for those of us in the workers’ compensation community to remember that Franz Kafka’s day job was as a clerk in a workers’ compensation bureau. Thus, when he wasn’t writing about labyrinthine bureaucracies he was contributing to them.

To illustrate this bass ackwards legislative scheme, let us start with the knowledge that the cap was, at the time of this story, $60,000. This was the maximum aggregate amount an injured worker could receive in benefits for the combined total of temporary total disability (lost time from work while recovering) and permanent impairment (compensation for loss of function into the future).

If an injured worker was off work for six months while recovering, the worker would run through perhaps $19,000 in temporary benefits, depending on the rate of pay at the time of the injury. This would leave $41,000 available under the cap for the payment of permanent impairment benefits. For workers with a minor to moderate degree of residual permanent impairment, the amount remaining under the cap would be sufficient to satisfy the impairment award.

If that same worker was more severely injured, and spent 18 months unable to work while recovering, the temporary disability paid would amount to $54,000. This would leave only $6,000 under the cap to cover what would likely be a higher degree of permanent impairment. In many such cases, the remaining amount under the cap was inadequate to pay the worker what the law would normally have provided but for the benefits cap. Equally inadequate would be the words the attorney could find to explain this inequity to the injured worker.

If a worker had a very high degree of permanent impairment, the cap would double, but this was no solace to those who were unfortunate enough to be left only highly impaired rather than severely impaired.

Lest the reader be left with the impression that the Colorado legislation was heartless in this matter, it should be noted that it only allowed this state of affairs to exist for a decade and a half, after which it ameliorated the situation somewhat by indexing the caps to the cost of living. And the courts? They ruled that if a compensation scheme is generally fair to most, it doesn’t matter if it is unfair to some.

Through my diligent efforts, my client had been directed to a physician who gave her an impairment rating that was high enough to bring her to within $5,000 of the $60,000 benefit cap. The insurance company was grudgingly prepared to pay this, because, as a practical matter, it had no choice. But I thought I could, by requesting a hearing to try to increase the impairment rating, try to squeeze out of the insurance carrier that last $5,000 remaining before the cap.

Through my less than diligent efforts, however, I missed the deadline for applying for a hearing. I therefore had lost my bargaining chip, and both sides were stuck with the existing impairment rating.

When the check came in and I settled up with my client, I noted on the statement that I had reduced my fee by $5,000. I explained the circumstances surrounding the reduction, telling her that although there was no guarantee that I would have been successful in soaking the carrier for another $5,000, through my inadvertence I had guaranteed that I would not even be able to make the argument. The client had difficulty with the concept at first, but asked a number of questions until I was satisfied that she understood the situation.

Three months later, a new client hired me. When I asked how he had heard of me, he mentioned that the former client was his mother-in-law.

He told me that she told him that any attorney who would admit he made a mistake and would reduce his fee to make up for it must be an honest (she did not say “diligent”) lawyer.

Over the next decade I ended up representing her husband, a cousin, two children, and other hangers-on whose relationships I couldn’t figure out. It turned out to be the best $5,000 I ever spent.

The standard most of us use to judge a restaurant also applies to lawyers—it’s not so much that you make a mistake, but how you deal with that mistake that is important.

I learned that marketing begins with how you treat the clients you already have. As a young lawyer, I spent a few years working with Dick Spriggs, a prosecutor and former Denver District Court judge. He once passed on to me his simple formula for avoiding problems as an attorney: “Don’t steal from your clients, always return phone calls, and never, ever lie to the Rocky Mountain News!” Well, we don’t need to worry about the third factor anymore, and most of us would never violate the first. So let’s keep plugging away at those phone messages, OK?

 
By Craig Eley, an administrative law judge who now screws up other lawyers’ cases rather than his own. He can be reached at craig.eley@state.co.us.

 

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