Every firm knows what a case costs to try. Expert fees, deposition transcripts, trial exhibits, court reporters, travel, etc. Those numbers are tracked because they arrive as invoices, and an invoice is hard to ignore and easy to see how it impacts the firm’s P&L.
Post-settlement lien resolution administrative tasks costs a firm real money too. It does not arrive as an invoice. It arrives as hours that are spent on administrative level work, as disbursement dates that slid, and as reduction arguments that were never utilized. Nothing in that list shows up on a report, which is why it tends to run for years without anyone understanding the true cost to the firm’s bottom line.
There are three leaks:
Leak One. Hours the Firm Cannot Bill and Cannot Recover
A firm accepts a case and, given the law, must track liens asserted against the client’s recovery. In some instances there is an affirmative duty to investigate and identify possible liens, and Medicare and Medicare Advantage plans are the clearest examples. From there the firm has to determine whether each asserted claim has merit and is legally valid, which requires sustained contact with lien holders and recovery vendors through the life of the case. At the conclusion, resolution frequently requires protracted negotiation before any agreement is reached.
None of that is billable. It is needlessly absorbed overhead. And it lands on the people whose time the firm most needs elsewhere, because lien work tends to fall to experienced paralegals and to the associates who already know the file. Time that could have been better spent on high level legal work.
The relevant question for a personal injury law firm is not whether the work is worth doing. It has to be done. The question is what the firm gave up to do it in-house.
Lien resolution hours are paid for whether or not anyone counts them. They come out of the same staff capacity the firm uses to move cases forward, and they never appear on a report because they never generate an invoice.
Leak Two. Disbursements That Drag
The larger problem, given the distraction it creates, is that firms often wait too long to begin negotiating reimbursement. Lien work sits at the back of every file, behind the deposition, the mediation, and the settlement itself. Whoever picks it up is picking it up at the busiest possible moment.
A late start pushes out disbursement, and the injury victim is the person least equipped to absorb the wait. They have been waiting through the entire case. The settlement is the point at which they expected the waiting to end.
There is a second effect that shows up later and costs more. Clients who were never properly educated about their lien obligations, and who end up paying back more than they should have, tend to leave the representation frustrated. Post-settlement impressions matter greatly. Satisfaction with how a lien was handled is often what produces the 5-star Google review, referral or the repeat matter, and dissatisfaction is what quietly ends both.
Delay at the end of a case costs more than delay anywhere else in it. The client has already waited, and the disbursement date is the last thing they may remember about the representation.
Leak Three. Reduction Arguments That Were Never Pursued
This is the leak that never gets noticed, because a reduction that was not argued leaves no trace. The file closes, the client gets their net, and nobody knows what a different approach would have produced.
Reductions come from asking a specific set of questions early enough for the answers to matter. Is there an actual lien, a reimbursement obligation, or only a debt? What standard reductions do state or federal statutes provide for this lien type? What other reductions may be available, including legal defenses, compromise, waiver, or offsets? Is the obligation limited to past payments, or does it reach future payments as well? Can the plan or the vendor actually prove the recovery rights it claims?
A single file can raise all of them. A dual-eligible client brings both Medicaid and Medicare obligations, each complex on its own. Someone covered by an employer ERISA plan who loses that job because of the injury may move onto Medicare mid-case, leaving two plans with two different resolution processes.
And the party on the other side is built for this. Recovery contractors including Machinify, formerly The Rawlings Group, Katch, formerly Equian, along with Optum and Conduent, are large companies whose reason for existence is recovering dollars out of an injury victim recovery. They have deep pockets and large staffs pursuing nothing else, and they are paid based on what they collect. The health insurance industry recognized that asymmetry decades ago and hired specialists. Plaintiff firms largely have not.
A reduction that was never argued leaves no trace that it was available. That is what makes this the largest of the three leaks and the hardest one for a firm to see from the inside.
The Accounting Change Most Firms Miss
Every business seeks to decrease operating costs and increase efficiency. The large amount of time a personal injury firm devotes to post-settlement lien resolution typically creates a loss to the firm bottom line, because that time is absorbed rather than billed.
Outsourcing changes where the cost sits. In most states, the cost of outsourced lien resolution can be passed on to the client as a case expense in the same way the cost of retaining an expert is passed on. Handled in-house, the identical work stays on the firm’s P&L.
That is a straightforward accounting point, and it is the reason the first two leaks are worth more attention than they usually get. The hours were always going to be spent. The question is whose line they land on.
The Bottom Line
Lien resolution does not announce what it costs. It shows up as capacity the firm did not have, as disbursement dates that moved, and as reductions nobody pursued because the team didn’t have the requisite expertise to argue them effectively.
A firm can build the capability internally. It requires people who do nothing else, because the work breaks down the moment the person running it also carries a trial calendar. For most firms the volume does not justify that hire, which leaves the same choice for every personal injury law firm. Accept the leak or move the work to someone whose only job is resolving it compliantly – SYNERGY.