What Drives Case Value

00:00 Speaker 1 Welcome to the Effective Lawyer, a podcast for ambitious attorneys who want to improve their practice. My name is Jack Zinda and I'll be your host. 00:23 Speaker 2 Hi, I'm Kevin Tully, the Chief Marketing Officer at Zinda Law Group. Today we're going to be talking about how to determine the value of a case. With me today is Jack Zinda, the founder and lead trial lawyer at Zimbabwe Group. Jack, how's it going? 00:34 Speaker 1 It's going great, man. Summer's off to a strong start. My wife hasn't killed the kids yet, but it's going well. How about yourself? 00:44 Speaker 2 It's going great. I'm about to get a little PTO in and go home and visit the family. So looking forward to it. 00:50 Speaker 1 Awesome, man. You're going north, right? 00:52 Speaker 2 Yes, up to New Hampshire. So planes, trains, and automobiles to get there. Small town in southeast New Hampshire, but it's a place we've gone for a long time as a family. 01:01 Speaker 1 So looking forward to get back to it. I'm jealous, man. You getting out of the heat vortex? 01:04 Speaker 2 Yeah, absolutely. It's scorching down here in Texas. So today we're going to be talking about, as I mentioned, determining the value of a case. This is obviously a really difficult determination for a lot of lawyers. Take us through how you think of this topic. 01:20 Speaker 1 Well, I think the listeners either going to find this podcast really valuable or hated because the first thing to know is there is no right answer. I don't care how long you've been practicing. It is very difficult to say what a jury would base a value of a case on. So the first thing I like to think about with any case is what is the outcome that could potentially happen in a jury and would that outcome make a meaningful difference in the client's life to help guide us in what the value of a case is going to be? Now, that doesn't mean there's not some steps and some process that you can take in order to get close to figuring out what a potential value might be in a case. So the first thing you want to think about is, okay, where what is? 02:08 Speaker 1 Who's my client? What have they gone through? And what sort of conduct has the defendant done that could make a jury angry? One hold them accountable for the harm they've done. There's also going to be pieces of the puzzle that are going to come into play, such as where did the incident occur? So what's your venue going to be for the jury trial? And I think of it like all of these different data points that you need to know. And understand in first kind of getting to lay of the land. 02:39 Speaker 2 So you're kind of starting with the end in mind, Is that fair to say? 02:42 Speaker 1 Always start with end in mind. So we tell all of our attorneys to always start with drafting what's called a jury charge, which is a list of the elements you have to approve. And what are the elements of damages that you're going to present to the jury. I've seen really experienced attorneys forget elements of harm, such as physical disfigurement, physical impairment. And so that's important. As you're working the case, you know what areas to focus on and you know how many lines in the case are going to be. If you have, for example, wrongful death case in Texas, you can bring a claim on behalf of the children, the spouse and the surviving parents, as well as called a survival action, which be if they survived for a bit of time before they passed away from the harm that was caused. 03:27 Speaker 1 And that gives you additional lines on the charge which can have a major impact in the outcome of a case. If a jury has 30 lines to fill in versus two, that can impact what the value of the case is going to be. 03:38 Speaker 2 So you mentioned outcome, you mentioned venue and other data points on that list. 03:43 Speaker 1 Yeah, so. And when we have a case you're trying to see, okay, what sources of information do I have that would give me facts that would help be predictors of future behavior. So for example, if I'm in Travis County, I could first try to see what are other verdicts that have come out from Travis county with similar facts. Now, usually, unfortunately, you're not going to have a lot of examples of cases that are right on point, but you might have some that are close that involve similar behavior by the defendant. So if I have a commercial trucking company involving a commercial truck, similar injuries of the plaintiff, it doesn't have to be identical, such as like a broken leg. It could be something slightly the same. Now, if you don't have information in that particular venue, you might want to expand the list further. 04:34 Speaker 1 And there's great resources such as trialsmith. Westlaw has some good verdict research. There's a company called Verdict Search that has good verdict data. I usually have to go the entire state to find that many similar fact patterns. Now, still keep in mind, a jury is made up of 12 individual that are not going to be the same on your jury panel, obviously. So that's one data point is prior verdicts. Another great resource is going to be attorneys, you know, that are in the community. We're fortunate enough to now be at a little over 30 lawyers. So we roundtable every case, whether it's a small case or a big case, to set a value, and that's one. So you get another perspective to understand what holes do you have in your case. 05:24 Speaker 1 The other is so can get the confidence to know what your case is truly worth. We typically do that prior to mediation or provide us any demand that we think is going to get paid. So those are two really helpful data points. Another really helpful way to approach it is to look at a focus group. So you have to be very careful when setting valuation on focus groups though, because one, the data set is usually really small. Two, no matter how hard you try, if you're doing your own focus group, you're going to be a little biased towards the plaintiff and sometimes you're very biased towards the plaintiff. So you can either do it on your own or you could do it with the third party. A third party is going to be more expensive if you do it on your own. 06:12 Speaker 1 Typically you can get it done for about $100 per focus group member. But you want to be careful on how much value you put in that data piece, unless you've done it several times and you're in a place in the case where you've got all of the facts. So for example, we would want to play plaintiff's deposition, play the defendant's deposition, have information about what an expert witnesses would appear. So we have two data points so far we've got, or actually three. We've got prior verdicts, we have round tables and we have focus groups. Now if you're a solo practitioner or a two person firm, get with other plaintiffs lawyers, you know, join a local travelers association. People love doing this. You guys could have a weekly meeting over drinks where they bring five cases, you bring five cases in your roundtable. 07:07 Speaker 1 Another great avenue for this is to try to talk to defense lawyers that you know that aren't on the case, if you're friends with them, to see what they're hearing in cases because they usually have access to a lot more data points than we would through insurance companies. They gotta be careful. Obviously, if you're going against them in a case or in other cases, you want to be careful about talking through the cases in that much detail. But if you have a close friend that's a defense lawyer, that's another good avenue. And also it's helpful to spot the holes in your case. One mistake that I see a lot of attorneys make is they base it on the Meta. Okay, in Texas, we have a lot of landmines where we can't prove up the full amount of the medical bills. 07:54 Speaker 1 There's a thing called paid versus incurred. We're only allowed to get what the client paid or what is owed. And even then, there's a little bit of a fight over what that number is going to be. So in more and more cases, we're not looking at the medical bills, we're looking at what the client went through. And so you want to think, like, is this case a big deal? And one hint is if a case is not a big deal to your client, you may want to question, why am I in this case? Why am I taking it to trial? 08:24 Speaker 2 Would you say a big deal in terms of the damage or the harm that was caused or a big deal to them in the grand scheme of other things going on in their lives? 08:34 Speaker 1 I would say both. I mean, so like, and it doesn't have to mean they're catastrophically injured. If someone was hurt and they missed their child's third birthday party, that's a big deal. If they missed work for two weeks, that's a big deal. But if they went to one doctor's appointment and they feel great and they can't articulate why this case matters, then you may question, is this case worth pursuing? We've really started looking at, in cases where someone is surgical or has a real catastrophic injury, like, how do we tell the story about how this impacts our daily life and base the valuation on that story and not based on medical bills, necessarily. 09:14 Speaker 2 Okay, so we've got prior verdicts, attorneys, you know, focus groups. Medicals is a. Is a thing that people might look towards, but you're cautioning against that with the prior verdicts. It almost feels like finding a cop during home buying. Is that a good analogy? 09:32 Speaker 1 Very good analogy. In the. And if there was like, one house in the city of Austin. 09:37 Speaker 2 Right. Which there is, first of all. 09:40 Speaker 1 And it's very difficult. You just have to be careful. Like, all of these things, I just caution that they're data points, they're not definitive. But what I think is really important is you've got to have a process that lets you get to that realization what the value is. And a lot of that is about giving you the confidence of what to ask a jury for and then to say no to an offer that's below that number. Something I tell my attorneys, when it comes to evaluation, it's better to be decisive than right, because there is no right answer. But if you're Indecisive. You're going to accept less than the case's true value. 10:20 Speaker 3 This podcast is presented by Zynda Law Group, a nationwide personal injury firm. For over 10 years, the experienced lawyers at ZLG have been partnering with outside counsel across the United States on all types of personal injury and wrongful death cases. With over 30 attorneys, Zynda Law Group has paid out millions in referral and joint venture fees since 2015. To learn more about partnering with Zynda Law Group, please email us@re referralsindalaw.com we'll schedule a time for you to meet with Jack Zinda or one of our trial lawyers to discuss your case. 10:59 Speaker 2 Those prior verdicts, do those come in handy in the negotiation phase? Would you provide those to the other side? 11:05 Speaker 1 If they're good. If they're good, yeah. No, it is helpful and you can point out, hey, a similar big verdict like this came out recently where you really got hit because the defense is looking at avoiding risk. So the more risk you can show them in the case of a big verdict, the higher likelihood of them paying you prior to a verdict. 11:26 Speaker 2 Now, on the roundtables with attorneys, you know, I could see them being very helpful in terms of finding issues with their case. How good are they at playing a jury and doing that estimate? Because I think an attorney is going to have their set of biases and different set of experiences than a jury, right? 11:49 Speaker 1 Oh, for sure. And I think that's a really good point of caution is we typically are the worst to evaluate a case on that level. I've had a lot of cases where I told the facts to a friend or family member and I thought it was an amazing case and they hated it for some weird fact that I didn't even think about. You know, for example, if I have a case involving children and the mom was hurt and the child was hurt, if the child was not wearing a seatbelt, my wife would give them zero. Probably 99% of the time the mom at least maybe the kid gets something, but like she's going to be so mad at the mom. And that's like an interesting fact. Then you may not think is going to be dispositive of the case. 12:32 Speaker 1 It would be for a lot of people. 12:34 Speaker 2 It's almost not a legal fact, but it's a fact that's important to the jury nonetheless. 12:39 Speaker 1 Exactly. Okay. 12:41 Speaker 2 And then focus groups, I'm curious. The pros and cons versus running your own focus group, paying extra to bring somebody in, which is obviously could be A con. But do you find that focus groups. Is there a way to bring in a focus group without them knowing you are the one paying them for their time so as not to bias them in that scenario? Or is that one of the concerns with doing internal focus groups? 13:10 Speaker 1 No, I think you can. I think you have to be really smart about how you do it. When were doing them in house, we'd have people physically come in. Now they're all remote. We would actually have a different office space that didn't have our law firm label on it that we'd have people come in and I would make it clear who I was, and then I would indicate that I was hired by the defense and the plaintiff because of my experience as a trial lawyer to conduct a focus group. And that's one way to make sure they don't, because there will be decision bias. If they think it's the answer you want, then they're more likely to give that answer. I also do a few things to kind of throw them off the trailer a little in the dark about the facts. 13:52 Speaker 1 I'll say I'm only allowed to share with you what they told me I could share. And then if they have a question, say, well, let me call them and see if I can give you that information. You do have to be careful about doing your own. We do both. Because I think a lot of times people don't do focus groups at all because of hiring an outside person. But they're not going to be as good as if you hired another person. But I do think they're still in really valuable zone. 14:18 Speaker 2 And where would you find people to participate in your internal focus group? 14:22 Speaker 1 We usually will look at churches, we'll look at employment agencies. You gotta be a little careful in those because you're getting a biased group because they're unemployed. Potentially. 14:34 Speaker 2 It's not complete random selection. 14:36 Speaker 1 Exactly. And also there's some great resources, Craigslist, potentially, to find folks or now like, because a lot of them are remote, you can post things on some platforms. 14:48 Speaker 2 Okay, so, and then the last point was medicals, which again, kind of cautioned against there. I, I, in my travels, I've heard it referenced that sometimes a multiple of medicals is one way to value a case. Is that a good barometer or a bad barometer? 15:06 Speaker 1 Everyone has their own way. So I don't want to discredit that approach. But for me personally, I think that is a really poor way to value a case. If I lost my hand in an industrial accident and they can't do anything. And my medical bills are $5,000. Is my case worth $15,000? Right. It's worth that loss of the hand. And so I think you have to be really careful by using the multiplier. And one thing that. So when you're pulling all this data together, the way I put it is like in a grid. And if anyone wants to email me, I'm happy to share an example of this. And we have built it into our software we use at our firm to value cases. It will have what is the well of each line of the charge. 15:49 Speaker 1 Then we'll put in what is the likelihood of outcome on a great day, an okay day and a bad day. And we do that for liability first. And then we do it through each element. And I'm using all these data points that I pulled in from other places to help determine these things. And then it gives me an average of all of those at the top. And I can look at a median. So now I can kind of see the ranges, a high, mid, low. And then I ask the question, if I got one of these outcomes, would this make a difference in the client's life? And if the answer is no, then you have to try the case because, you know, there's no way to make a difference for the client without that outcome. Now, the level of harm is how you determine. 16:30 Speaker 1 Would it make a difference in the client's life? If it is a smaller case that could be, you know, tens of thousands of dollars, if it's a catastrophic injury where, say, someone's, you know, a quadriplegic can't even accept $5 million in that case, probably because their medical bills are so high in the future that it wouldn't make a difference in their life at that level. 16:51 Speaker 2 So I want to ask you about the rubric that the other side might be using. But are there any other things you wanted to mention that you have across? 17:00 Speaker 1 No. I mean, I think always keep in mind as well, it's the client's decision, but I find that they're really looking you for guidance. And we kind of look at it in a range of if the offer is above a certain number, we're going to strongly advise the client's attendance. If the number's below a certain number, we're going to fight really hard. Can't accept this number. You're really, like, letting yourself down by doing that. And then there's a range where it's kind of a pro and con for the client. You know, you could get more trial, you could get less. And it's kind of a risk reward situation. 17:32 Speaker 2 Okay, so on the other side, is it the same matrix or do they use different factors? How do they value case? 17:39 Speaker 1 You know, I can only speak to what I've heard because I've never had a defense lawyer, insurance adjuster. My understanding is that they use the vast amount of data they have from tens and thousands and hundreds of thousands of cases, which means they usually undervalue a case until you get an attorney on the fileman starts approaching Trump because they're doing it based on the lowest common denominator. And I think most cases are handled by lawyers that are not specialized in personal injury. And so they will tend to accept number that's below the case value. 18:13 Speaker 1 So they're pulling these averages, let's say this case and this jurisdiction's worth this amount and it's based on the average of all the lawyers world that have done that case, when in actuality it's really a bigger number if it's our firm handling it or another really good firm handling it. 18:30 Speaker 2 So jag, how does it come into effect if your client is at fault or at least partially at fault in these cases? 18:39 Speaker 1 I look at it a couple ways. One is how partially at fault are they? And in Texas, if they're 51% or more at fault, you're going to lose. So you want to bake that into your analysis that if you think there's a chance there's 60% at fault, you could have a high outcome of zero. If it's in a state like Arizona, which has what's called pure comparative, which means that if your client's 60%, you can still get the 40% against the defendant. That's a different analysis there. That 51% bar can have a major impact on valuation of the case. And that's where you can lead a lot of value out of a focus group is determining that percentage of negligence on guide. 19:23 Speaker 1 I love using things like Rules of the Road and Reptile, but you have to be careful in that just because the defendant violated, did your client violate a rule and was their rule violation worse than the defendant's? I forgot what statistic it is. But like plaintiff's lawyers lose like one third of rear end collision cases, which means their client got hit from behind and they lose face on liability. Wow. So when you're looking at your cases as well as like a side point, never assume liabilities in the can. Defense lawyers tell me all the time, oh, we're going to concede liability. You know, liability Is not an issue. We still act like it is. 19:58 Speaker 1 Because a good defense lawyer will wait till the end, bring up some issues and say, you know what, maybe we're, you know, 80% at fault or 70 or 60 or 50, maybe it's a 50 situation to try to get those percentages lower. 20:11 Speaker 2 Okay, so we talked about negligence, comparative negligence. What about the source of recovery? How does that play into the valuation of the case? 20:18 Speaker 1 Well, so one, it could give you an artificial kind of cap on how much you can get. Unless you can get what's called bad faith pressure on there because they turned out an offer they should fix out. That also determine how quickly a case should resolve and how much money you can put into the case. Not because you don't want to put as much money as necessary, but if you have a case where someone is hurt really badly and it's worth several million dollars and there's only half a million dollar insurance policy that's going to affect how much you can spend on case expenses. Because every dollar you spend goes not to the client, but goes to somebody else. So I try to get that information figured out early in the case. When you file the lawsuit, make sure you get the disclosures. 21:03 Speaker 1 If it's a very large case, you want to really put down excess policies. On top of the typical disclosure discovery. You want to really do request for admissions, request for production, specifically on excess policies to make sure really track down every situation. We had a case recently run. Its face, it looked like there was only a $50,000 insurance policy and it actually was a million dollar case. A million dollar policy. And we only discovered that through like the second round of discovery and then it was kind of getting there. Sometimes that's intentional by the insurance company. Sometimes defendant doesn't realize there's a policy. But you want to make sure if it's a serious injury case, you really lock all that in. 21:47 Speaker 2 Do you have any other examples where you've been really surprised in either direction of the value of a case? And that maybe highlights some of these different factors you talked about. 21:58 Speaker 1 Yeah, I've had a case, this is probably my second year as a practicing lawyer where had a really nice plan shoulder injury case. He had a history of chronic shoulder problems prior to the wreck. It was a low speed collision. 22:14 Speaker 2 And. 22:16 Speaker 1 Was playing golf three times a week. Had a rotator surgery recommendation. Wasn't sure if he was going to get it. And I pegged the case is worth around $60,000. New adjuster came onto the file and called me up, said hey, I'm replacing these three adjusters that I fired. I'm in New Jersey. Can I fly to your office to mediate this case without a mediator? I'll do it on my own dime. And trust me, you're going to be glad I did. My radar is kind of leveling. That's usually not the case. I'm usually not happy with an adjuster, you know, saying they want to do something, but I said, sure, let's give it a shot. You know, I'm still relatively young at the practice of law. 23:02 Speaker 1 She comes down, I've got my client in the office, and, you know, clients tell me about all the golf he's playing, how great life is. He's doing amazing. And the adjuster was pretty nice. And she said she had, like, 500 files and her job was to get them all closed down. He brought a check with her today to close out this case, which, again, my radar is. I'm like, okay, yeah, that's local. Right. And she ended up paying us $200,000. Wow. And I wouldn't have known that if I had come in at the 60 I thought the case was worth. Right. And so it taught me, always negotiate way above what your value is and never assume that they're valuing it at the same level you are. I don't know if their, you know, radar was off. I don't know. 23:53 Speaker 1 Maybe I was just way off based on this case, but it just showed me, you gotta be careful on how you negotiate those. And she actually had a check. Whether it was the easiest process I've ever had. I've never had one since that was that easy. Or where they. I've gotten one where they paid way over what I thought the case was potentially worth, but not ones like them. 24:14 Speaker 2 Maybe they were afraid. He was a PGA golfer. 24:16 Speaker 1 There you go. 24:19 Speaker 2 Well, we'll have to do another episode on negotiations. I would love to talk more about some of the strategies there and get into some of that at some point. 24:26 Speaker 1 That'd be great. What other. 24:29 Speaker 2 What other points on this topic? 24:30 Speaker 1 No, I mean, I think I would just tell any attorneys out there if you want to talk through this. I think this is kind of the third rail in our practice. I think people are terrified to see what a case is worth. They're nervous to ask other attorneys opinions. I don't think they like sharing what they settled cases for, unless it's like a scoreboard number. But I think it's important we talk to each other, because the insurance companies know. Right. So you can reach out to me via email or give me a call at the office. And happy to brainstorm value in a case. We created a cool platform that we use internally called the Vault, where we put every result we've ever had and so we can say like, okay, how did we handle a dog bite case like this? 25:11 Speaker 1 And it gives us some more data points to work off of. So awesome. 25:14 Speaker 2 Well, thanks Jack. Appreciate your time. 25:15 Speaker 1 Thank you, Kevin. Sounds good. Talk to you later. 25:22 Speaker 3 Thanks for listening today's episode of the Effective Lawyer. You can learn more about our team and find other episodes of our podcast at zindalaw.com as always, we'd appreciate that you subscribe, rate and review the pod. 25:34 Speaker 1 Thanks.