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Tuesday, August 13, 2013

Legal Fees and Reform

Today's post was shared by WorkCompCentral and comes from

Take a look at

WorkCompCentral job ads


What do you see?

Lots of employment opportunities for lawyers, primarily those on the insurance/employer defense end.

Some firms are even taking out full display ads for recruitment days and other practices that are typically the province of Corporate America.

Indeed, this does appear to be anecdotal evidence of a larger trend in California workers' compensation - as recent Workers' Compensation Insurance Rating Bureau data shows, spending on lawyers this past year totaled $1.2 billion and has been increasing at a dramatic rate, particularly for defense legal fees.

That's a lot of legal fees, which represents a lot of benefit contestation.

Break it down even further, though, and the anecdote of job ads for lawyers becomes even more salient - defense fees are double what applicant attorney fees are.

Here's the graphical depiction based on the WCIRB numbers:

The chart is interesting in a couple of aspects.

Note that following the 2004 reform, SB 899, defense fees skyrocket from $368 million in 2003 to nearly double at $642 million in 2006, while applicant attorneys, whose fees are largely pegged to permanent disability indemnity, lost some ground, but essentially remained flat.

Things stabilize a bit after 2006 until 2011 when the lawyers on both sides, start taking home a bit more pay, such that 2012 legal fees are double what they were in 2002 for both defense and applicant.

Compare to the Consumer Price Index rate of inflation - $100 in 2002...

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