About the UTBMS Litigation codes

The UTBMS Litigation code set is used by several insurance carriers to manage legal expenses. A group of insurer representatives and insurance defense lawyers recently reviewed the UTBMS system to establish whether it is a useful tool for the insurance community. The group determined that the system works well, but there is a need to clarify how the codes are used, as well as a need to educate timekeepers who might be unfamiliar with the UTBMS system. The following materials discuss 2007 updates to the UTBMS, which are intended to promote consistency in the use and application of the codes by insurers and insurance defense counsel, offer guidance to assist lawyers and clients in using the code set effectively. While the specific utility of the codes will vary from company to company, some common concepts do apply.

1. Insurance carriers that use UTBMS, do so because the codes provide:
a) a common “language” between clients and lawyers regarding legal fees;
b) data standards that are generally accepted in the legal community;
c) the ability to compare case budgets to invoice details; d) a means of organizing invoice details and budgets to better understand legal expenses.

2. The insurance carriers and lawyers that participated in the aforementioned review of the Litigation code set concluded that the codes will also work for Workers’ Compensation.

3. Insurers also use other UTBMS code sets, such as the Counseling codes, which are often used for Coverage advisory services. Expense codes are also widely used. This paper addresses only the Litigation code set.

4. Its important to understand the hierarchy of the Litigation codes.

Phases are the major categories of legal services typically found in Litigation.
Tasks are the actual legal services.
Activities are the individual steps taken to perform the legal services.

5. Some insurers require budgeting. Common uses of budgets include:

• Planning – the budget helps the client and lawyer better understand the cost of implementing a case strategy.
• Approval – a client and lawyer might pre-negotiate legal expenses via a budget.
• Control – a client and lawyer might use a budget to set parameters for legal services. The level of detail required for budgeting will vary by client, and by type of case. The code hierarchy allows budgets to have different levels of detail than invoices. Although even a summary budget will work, most clients prefer budgeting at either the phase level or task level. Rarely will clients request budgets at the activity level. It is best to clarify the required level of detail as early in the case as possible.

6. Electronic billing provides the ability to compare a detailed time entry with a more general budget, which is what allows budgeting to be more flexible.

7. Insurers are increasingly using UTBMS data to analyze much more than the cost of legal services. For example, a carrier might want to know which legal services produce particular outcomes. Inaccurate coding, or use of default or catch-all codes have a negative impact on the analytical process. This is why the task code L190 has been removed from the Insurance Litigation Code set. Firms that are lax in coding discipline should be concerned. You do not want to be distinguished by the lack of information that you provide to a client.