Traveling with a Newbie Expert (9) or Pitfalls!

Probably the most important pitfall and the number one complaint from expert witnesses is not getting paid. Go figure! You’ve put in the work, you’ve spent hours perfecting your report, the attorney you are working with loves your work and has approved your invoice….and then crickets.

Well, while not getting paid can happen on both sides of the aisle (plaintiff’s and defendant’s) it is less likely to happen if:

• You have a signed and dated Fee Schedule that lays out your billing and payment requirements;

• There is an insurance company involved with the side you are representing;

• You have required a minimum “down payment” fee up front; and/or

• The side you are representing wins their case (well, duh….!).

Even with all of the bases covered one expert witness reported that finding himself on the losing side, the payer (he didn’t state who) refused to pay the invoice for his services, instead he was offered a much lower amount to settle the bill a year after the case ended. Ultimately the expert chose to settle for half of his bill, figuring half was better than none.

In my own example, I completed my research and a report which exonerated the client from wrong doing to the degree that the Plaintiff’s attorney ended up dropping the client from the law suit. I was thrilled – this is exactly the outcome that usually has both attorneys and insurance companies jumping for joy. And yet, the months ticked by in silence. I sent three copies of my invoice, the first following my normal terms for payment, the second when the law firm stepped in to resubmit the invoice and the third after five months had passed without payment. Finally, six months following the end of the case I was paid.

My research has shown that the majority of experts reporting not getting paid or having to accept a lower fee were not working with an insurance company. That said, my own example of an insurance company (you know who you are- GGRRRRRRRRRR) completely ignoring my terms and not paying for six months despite a PERFECT outcome is clearly a cautionary tale. Here’s what I did wrong:

• I did not have a signature line and date on my fee schedule that required the insurance company to sign off after approving my selection; and

• I did not require a down payment up front.

Even after my experience I am still stubbornly (stupidly??) resistant to requiring a down payment up front. Why? Because I am still a Newbie Expert Witness. I believe that because I am in the process of building a reputation I need to be cautious about adding elements to my fee schedule that could be a solid turnoff for the decision makers. For now I decided to add the signature and date line to my fee schedule. Going forward I will probably also ask the attorney who selects me if there are any terms under the insurance company that I need to be aware of....for example maybe they only pay six months following the outcome of a case. I have no idea if this will be successful or not, so stay tuned!

As I said, I have not done Plaintiff’s work, but for the handful of people who might be reading this (Hah!) you may remember that in an earlier Blog I said that it might end up being the Plaintiff who needs to pay for the expert witness if they lose their case….it all depends on their agreement with the attorney. It isn’t a stretch to believe that when people are disappointed they aren’t really excited about paying the associated bills so anyone doing this type of witness work should be prepared to always require a down payment.

Some of you may be wondering about the possibility of taking your client (whoever the payer is) to court to get paid……..let’s talk about that next week in round two of Pitfalls!

Traveling with a Newbie Expert (8): Learning the Financial ABC’s

Gosh guys…..sorry to make you wait two weeks. Life got a little in the way since the last time I put pen to paper. All has righted itself (hooray!) and I am now ready to fill everybody in on what you should be thinking of as you develop your fee schedule for expert witness work.

I suppose it is pretty obvious that you will want to build your fee schedule around the activities that you will perform. What might not be quite so obvious is that your fee schedule is going to find its way into many people’s hands, those that are involved in the case and those that might simply be interested in using you themselves. Take the time to make this document look professional, concise and comprehensive.

So, how can you achieve a fee schedule that is both concise and comprehensive? Well….what I am getting at is that you need to make sure to cover all of the bases, but at the same time don’t craft something that is so complicated people are put-off from hiring you. Or worse yet, that leaves them thinking that buried in your fees is some clause that will triple their expenses.

To help with the comprehensive part- below are the key items to cover, each of which should be presented as an hourly rate:

• Record review and any other materials related to trial;

• Research in support of the retaining party;

• Trial preparation (this should include emailing and phone calls);

• In-person work including, consultation and investigation assistance*;

• Expert witness report preparation (or white papers, research summaries – basically any written documentation you are specifically asked to provide);

• Appearance/testimony at depositions or trial* ;

• Travel expenses including travel time**;

• An untimely cancellation clause for a deposition or trial testimony (think about something like having gotten less than 48 hours notice);

• A reminder statement of who is responsible for payment, and that your compensation is not contingent on the outcome (please remember this);

• A statement stating when the retaining party can expect to be billed and what payment terms you are setting; and

• A signature and date line.

Those of you with great eyesight probably noticed the tiny * at the end of two of the lines above. For these two items I recommend that you set a reasonable minimum number of hours, meaning set the hourly rate but with some reasonable minimum of your time. Trust me on this - in-person work can take a huge chunk out of your time. For example, you could be called to testify but may find yourself cooling your heels for a couple of hours before you are actually on the stand. This is a lot like going to see your doctor! Or the BMV!

There’s also a line that has been awarded two **! This one will take some thought on your part. If you have to drive a good distance or fly someplace to meet with the attorneys you’ll want something in there that gives you some compensation during travel. For me, anything I need to do that is in my home county is free of charge. Outside of that I bill at a much reduced rate for half the travel time needed. That’s the way we did it when I was consulting and it still seems pretty fair.

Something that I did not address myself, but that I have wrestled with is the cost of making copies. Look folks – I’m old school on some stuff. I can read most depositions on line but if I am asked to review 6 years worth of progress notes I head straight to my local Office Max. I have not charged for this, but just to give you an example, earlier this year one trip cost me nearly $700!! Youch! It paid off though – I was better able to organize the documents and I found some nuggets that had been buried pretty deep. This was a big, big help to the attorneys. End of the day – think about this and whether you want to add something or not.

Okay now that the big stuff is identified - here is my best general advice for overall success with your fee schedule.

• Keep your fees on a single page and make it professional (no typos guys!);

• Add your logo if you have developed one and add your contact information (this should be on every document you create); and

• Create reasonable fees - if you are new at this I don’t care how many years of experience you have in your industry, set your fees lower until you have developed a name for yourself as an expert witness. You don’t have to give your services away (that comes later when you’re reading 20,000 documents), but you don’t want to have the payer thinking that for what you’re charging they could get a highly experienced expert.

That’s it for now my friends- I hope this was helpful! Next time we’ll talk a little about avoiding pitfalls – which I'll call “lessons from the trenches“.

Traveling with a Newbie Expert (7) or How Much is That Doggie in the Window?

As I promised last week, today we are going to take a look at one of the most critical aspects of the expert witness business- how much do I charge? While there are some helpful hints online (Google people!), much depends on the following factors:

· What industry you represent as an expert

· Where you are located (think New York verses Zanesville, Ohio)

· The level of competition (there are a lot of doctors but there are not many neurosurgeons!)

I think all of us can understand that a neurosurgeon is going to have a much higher hourly rate than someone like myself, who focuses on social services. It’s logical, right? So naturally (and logically) medical doctors tend to be the big winners in the field, commanding around $500/hour on the low end and going up, up, up from there. (It’s also important to note that the more popular an expert is, the greater their reputation and subsequently the higher their fee - just like high school!!). When an insurance company is staring at a medical malpractice award that could reach in the millions, the price of a top shelf expert probably seems like money well spent.

And speaking of insurance companies, this might be a good time to talk about who is paying. The bottom line is each party pays for his/her own experts. Sounds simple, right? Well, not so much.

The work that I have taken on over the last few years has always been on the defense side of the table. Typically either an organization or one of their employees (OR BOTH!) is being sued and so my fees have been covered by the organization’s insurance company. The insurance company is also responsible for approving my contract and my fees. And so, while my contact is always the attorney, and it is the attorney who reviews/approves my charges, the check will be written by the insurance company.

As of yet I have not contracted for any cases on a Plaintiff’s behalf. This is not to say that I would never do this work, it is just that my background as a consultant and an executive have given me both experience and a strong preference for organizational defense work. That said I believe if there is no insurance company involved it is the hiring attorney who is responsible for paying the expert witness fees….unless they do not win ….in which case it might fall on the Plaintiff (the person suing) to pay any expert fees…..ouch.

Okay! Now that we know WHO is going to pay us, let’s go back to talking about what is a reasonable charge for services. This is the place where you need to do your own research, based on your particular industry. If I can point you in a particular direction I suggest that you check out the Expert Institute who publishes an Expert Witness Fee Calculator with data gathered from thousands of expert engagements across all (or nearly all) specialties. In their report they have identified the average national fees for case reviews, depositions and courtroom testimony. The Expert Institute also breaks down those specialties that command the highest fees as well as those that are currently on the rise.

According to SEAK, the median hourly rate for a medical expert to conduct a file review is $350/hour. This fee is 43% higher than what a non-medical expert charges to conduct a file review (time for a challenging math quiz…….yup, about $200/hour). The median testimony fee for medical experts is $500/hour while the median testimony for the rest of us average folks is $275/hour.

These resources should be good places for you eager newbie experts to start your research. Next week we will focus on exactly what services are to be charged… like lunch! Trips to Vegas! Nah......just a pipe dream.