California AB 2305: The End of the MSO Exit for Personal Injury Firms?

There is no doubt that the personal injury law firm industry model is poised for a significant structural shift driven by private equity using MSOs and ABS as vehicles. These structures offer an entry point for private equity into the space by using the MSO to arguably enhance operations and efficiency of a personal injury firm. But these arrangements, despite some apparent advantages, must be appropriately structured to comply with professional responsibility rules-state bar rules, address state-specific non-lawyer ownership regulations and preserve law firm independence.

At the moment, it continues to be somewhat of an unregulated frontier specifically for MSOs but it appears things are changing in that regard. California lawmakers sent Governor Gavin Newsom Assembly Bill 2305 during the final week of August. He has until the end of September to sign or veto. If he signs, the provisions apply to contracts entered into on or after January 1, 2027.

AB 2305 does not create a new prohibition on nonlawyer ownership of law firms. California has prohibited nonlawyer ownership and fee sharing for decades under Rule 5.4 of the Rules of Professional Conduct. What the bill does is lift the principle out of the ethics rules, place a version in the Business and Professions Code, and aim enforcement at the structures built around the rule.

Private equity groups, hedge funds, investment firms, and any non-attorney corporation whose primary purpose involves raising or managing capital, participating in a litigation practice through ownership, financing, or a management arrangement: Those investors would be barred from influencing or interfering with an attorney’s professional judgment on case strategy, client selection, resolution, and representation. Any contract provision permitting such interference becomes void and unenforceable as against public policy. Violations expose both the lawyer and the investor to statutory damages of $10,000 per violation or three times actual damages, whichever is greater, plus fees, costs, and injunctive relief.

California joins two states. Colorado Governor Jared Polis signed HB26-1421 on June 3. The law took effect August 12 and repeals September 1, 2029. Colorado went further than California in one respect. The statute creates a private right of action, allows disgorgement, and reaches firms outside Colorado on Colorado-connected matters. Competing law firms with substantial Colorado business have standing to sue. Illinois passed HB 5487 on May 31 and the governor signed on August 7.

Three states in one year. None of the three outlaws the management services organization. All three attack the economics of them instead. That being said, Arizona licenses alternative business structures outright. Utah operates a regulatory sandbox. The District of Columbia has permitted a limited form of nonlawyer ownership since 1991. Puerto Rico adopted a rule effective January 1, 2026 allowing nonlawyers to hold up to 49 percent of a firm. So it is too early on right now to know where this will all go.

CONSUMER ATTORNEYS OF CALIFORNIA SPONSORED AB 2305, WHY?

Consumer Attorneys of California sponsored AB 2305. The plaintiffs’ bar voted to restrict its own access to capital. CAOC President Doug Saeltzer framed the reasoning plainly, arguing the same standards demanded of corporations and powerful institutions apply to the trial bar. There are two themes at play.

First is control. Outside capital changes who decides when a case settles. An investor with a fund life and a return target has an interest in cash conversion. Your client has an interest in the right number at the right time. Most of the time the two interests point the same direction. Where they diverge is the catastrophic injury case, where patience is worth the most money to the client and the most delay to the fund. A structure allowing an investor to lean on settlement timing becomes a client problem before becoming a business problem. CAOC definitely got the call right.

Second is competition. Restricting capital raises the relative cost of scale for smaller to midsize firms that lack significant capital. Large, well-established plaintiff firms compete for the same cases against smaller firms who could use outside money to buy advertising, technology, and case acquisition capacity. Trisha Rich of Holland and Knight, who advises on these transactions regularly, has noted publicly some of the legislative pushback stems from competition over funding sources.

RULE 5.4’s IMPLICATIONS FOR MSO STRUCTURES

Model Rule 5.4 of Professional Conduct (Professional Independence of a Lawyer) has always prohibited nonlawyer ownership, fee sharing, and outside control of professional judgment. A management services organization answers the rule by separating the entities and relabeling the payment. A regulator applying substance-over-form analysis asks a different set of questions. What did the investor buy. What future stream of money supports the price paid. Would the management company hold the same value if the affiliated law firms disappeared tomorrow. Was the management fee derived from the market cost of the services, or from the amount of law firm cash flow needed to justify the purchase price.

Why is this important? The new legislation gets the coverage, but a state bar or a state supreme court needs no new statute to challenge a structure signed last year. Rule 5.4 exists in every state. Enforcement turns on how a regulator characterizes the economics, and characterization is a judgment call your transaction documents do not control.

THE DEMAND FOR CAPITAL IS REAL

Despite all of the legislative activity, look at the pace of the market. Uplift Investors formed the Orion Legal MSO with Dudley DeBosier Injury Lawyers in January. Hughes & Coleman Injury Lawyers followed in May. John Foy & Associates in June. Bottaro Injury Lawyers in July. Most recently, Daniel Stark Injury Lawyers became part of the Orion Legal MSO. Five plaintiff firms in seven months, on a platform built for consolidation, backed by a $670 million debut fund closed in July.

At the top of the market, John Morgan of Morgan & Morgan, P.A., the country’s largest personal injury firm, hired JPMorgan in June to explore a minority stake sale of more than $1 billion, with a public listing as a long-term possibility. In August he told Bloomberg the firm is worth “at least $10 billion.” Whether or not Morgan and Morgan ever lists, the number anchors every valuation conversation in the plaintiffs’ bar for the next several years.

IBISWorld puts U.S. legal services near $400 billion in annual revenue, and the sector remains among the last large professional services markets institutional capital has not consolidated. Demand for capital does not disappear because any one structure gets restricted. Capital will reroute.

IN THE NEW LANDSCAPE, THE P&L GETS MORE IMPORTANT

Here is the practical consequence for firm owners of what is going on in the industry. Depending on location, growth capital may get more expensive and harder to source. Growth then has to come out of margin.

Look at where margin is lost in a plaintiff practice. Most firms find the answer in post-settlement administrative tasks like lien identification, verification and resolution.

Every case carries an affirmative duty to identify, verify and resolve liens. Medicare Parts A and B conditional payments. Medicare Advantage plans. Part D prescription plans. Medicaid. ERISA plans and their recovery contractors. FEHBA and military claims. Hospital liens. A single client with a multi-year treatment history moves between plans, and each plan brings a separate recovery contractor, separate notice rules, and separate compromise practices.

Your senior paralegals and case managers spend a substantial share of their week on the work. The recovery vendors on the other side are built for exactly this. Machinify (formerly Rawlings), Optum, Katch (formerly Equian), and Conduent exist to extract dollars out of injury victim recoveries, with deep pockets and large staffs assigned to nothing else. A firm handling the work with two paralegals and a spreadsheet operates at a permanent disadvantage.

The cost shows up three ways. Payroll spent on administrative work instead of case development and trial preparation. Disbursement delays while liens sit unresolved, which frustrate clients and slow your revenue cycle. Reimbursements paid at a number higher than they should be in certain circumstances, which reduces the client’s net recovery and damages your reputation at the exact moment the client forms a lasting impression of your firm. When they walk out your door.

Outsourcing lien resolution is settled ethical ground. Opinions from New York, Ohio, Utah, and other states permit retaining a lien resolution firm and charging the fee as a case expense, subject to conditions. Amend your fee contract to disclose the outsourcing. Obtain informed consent at the start of the representation. Pass the charge through at cost with no surcharge. Confirm the arrangement produces a net benefit to the client on each lien.

Firms working with Synergy (and other like providers) on lien identification, verification, and resolution do so for the same reason health plans hire recovery contractors. Specialists win repeat work with high regulatory complexity. Redeploying paralegal hours from lien administration to case development, and securing deeper reductions on the liens themselves, improves your margin and your client’s net at the same time. Watch the improvement in your P&L.

ALTERNATIVES TO A PRIVATE EQUITY RETIREMENT PLAN

Some personal injury firm owners have assumed outside capital would provide their liquidity event. The arithmetic looked appealing. Sell the operating platform, keep the law practice, take a check, stay on for a few years.

These types of exits will still work in some states, but perhaps not in others. The window in California narrows on January 1, 2027, and California is the largest legal market in the country. Colorado and Illinois narrowed theirs already. Other states may introduce versions in 2027 sessions.

As an alternative, you can rebuild succession around these 3 traditional methods:

Internal equity first. Identify the two or three lawyers who will run your firm in ten years and start selling them equity now, in tranches, at a formula price. The transaction takes years to complete. Starting at 62 costs you negotiating room and costs your buyers the runway to finance the purchase.
Bank and specialty debt second. A profitable contingency practice with a diversified docket and clean financials borrows against fee receivables at a cost well below what an outside investor charges in dilution. Most firm owners have never built the financial reporting a lender wants to see. Build the reporting anyway. The same discipline improves how you run the firm whether or not you borrow.
Lawyer-to-lawyer sale third. The market for whole-firm sales to other plaintiff firms is thin, slow, and priced below what an operating platform buyer would pay. Treat the option as a floor, not a plan.

WHAT TO DO IN THE NEXT 30 DAYS

Write down your succession plan with names, a valuation formula, and dates. If the plan starts with an MSO option, make sure you have 2-3 other viable options.

Build the financial reporting a lender would require, whether or not you intend to borrow.

Measure the hours your staff spends on lien identification, verification, and resolution over the next 60 days. Multiply by loaded labor cost. Compare the number against the cost of outsourcing. This is part of shoring up your P&L for exit. Maximize efficiency and profitability making you more attractive at exit.

The firms who come out ahead will be the ones who fund growth from operations rather than from a term sheet, and who decide which work belongs inside the firm before someone else decides for them.

Why Synergy Is Built for This Moment

At Synergy, we’ve always believed that lawyers should focus on securing justice while we handle the friction points that slow firms down. Now, with the rise of different business structures and the need to be as efficient as possible, we’re doubling down on that mission, helping firms integrate the best tools with the best people to achieve Peak Practice.

🔗 Want more insights like this?

If you’re a personal injury lawyer ready to scale, streamline, and step into your role as CEO, let’s talk. Join the Peak Practice Community, and learn how Synergy can help you eliminate settlement bottlenecks, resolve complex liens, and maximize recoveries. Learn more here: https://partnerwithsynergy.com/resource-hub/

If you want to grow and scale your law firm more effectively, consider partnering with Synergy for lien resolution. Learn more at: https://partnerwithsynergy.com/services/lien-resolution/why-partner-with-synergy/

Ten Years After a Truck Hit Me: What My Own Injury Case Taught Me About Personal Injury Injuries, Recovery & Liens

The morning of August 2, 2016

On August 2, 2016, I got up at 5:00 a.m. to ride with my cycling buddies on a group ride. I turned out of my neighborhood onto a two lane road with a bike lane and rode north with the right of way. I saw headlights coming toward me. A pickup truck turned across my lane into a shopping plaza and struck me.

I have no memory of the impact. I remember the headlights, my internal voice screaming no, and then lying on the pavement while a stranger rolled me onto my side so the blood would drain out of my broken face.

Doctors diagnosed a LeFort III fracture, which means every bone in my face was broken, including my eye orbits and my nose. My jaw broke in several places and needed a metal plate in my chin. The impact tore my lower lip in half, knocked out seven upper teeth, and broke my right collarbone. I spent three weeks in the hospital, nine days in the ICU, five days in a medically induced coma. I woke to find my jaw wired shut, a breathing tube in my throat, and a feeding tube keeping me alive. A week later the pain in my broken jaw forced the surgeons to open my windpipe by performing a tracheotomy. I lived on liquids for two months and needed two years of dental work before I ate normally again.

In 2016, drivers killed 853 cyclists in the United States and injured an estimated 64,218 more, according to NHTSA. I was one of the 64,218.

To the driver, I was an obstacle

Here is the part I keep returning to as a business owner.

At the moment of impact, I was not a father of three children. I was not the CEO of a company with employees and their families depending on me. I was not a lawyer with clients waiting, or a son, or a friend, or a guy who had trained hard all summer. To the driver of the pickup truck, I was an object in his way.

Every client who walks into your firm has been through a similar moment like mine. Someone reduced them to a thing. The whole point of the work you do is to help them recover from all of this by pursuing their personal injury case.

Volume works against you here. Not because your team stopped caring, but because a firm running hundreds of files has a fixed number of hours, and the hours go wherever the pressure is the greatest. When administrative work swallows the day, the client relationship is the first thing to suffer.

What happens after the trauma team finishes

The driver who hit me worked in the plaza he was turning into. He carried a $10,000 policy, and the policy was the whole of his coverage. I had underinsured motorist coverage, and the carrier declined to tender the stacked policies on a clear liability case, so I filed suit. I sat for two depositions. A year and a half later we mediated, and I gave the damages presentation myself so I could look the adjuster and the driver in the eye.

Then came the part nobody prepares an injury victim for. Six figures of medical expenses, much of the dental and cosmetic work sitting outside what my health plan covered. A health insurer with a lien on my recovery. Future medical costs with no reliable way to quantify or schedule them. A large sum of money and a short window to make decisions with permanent consequences.

I have spent my career advising people through exactly this, and the process still felt heavy. I negotiated my own lien. I set up my settlement plan including annuities and a trust. I set money aside for future medical needs. I made every decision I had recommended to clients for two decades, and I made them while recovering from a concussion and a face rebuilt with hardware.

Your client has none of this background. Your client has your firm, and whatever guidance your firm provides at the end of the case.

Where your staff time goes

Think about the last catastrophic case your firm resolved.

Someone on your team requested a conditional payment letter and worked the claims listing line by line to strip out unrelated charges. Someone chased a Medicare Advantage plan nobody knew about until three weeks before disbursement. Someone read an ERISA plan document to determine whether the plan was self-funded and whether the reimbursement language survived McCutchen. Someone sat on hold with a state Medicaid recovery unit. Someone verified whether the client had ever received VA or TRICARE benefits.

Now count the hours. Every one of them came out of the same pool your firm needs for case selection, discovery, depositions, expert workup, damages development, and time with clients.

Lien identification, verification, and resolution look like legal work because the rules are legal rules. The daily reality is administrative. Phone queues, portal logins, faxed authorizations, follow up letters, and a great deal of waiting. Paralegals with real judgment burn their best hours on tasks with no discretion in them, and firms lose good people to the grind.

The compliance pressure went up this year

CMS finalized its Section 111 civil money penalty rule in October 2023. The rule applies to claims resolving on or after October 11, 2024, and CMS began enforcing on October 11, 2025. Starting in January 2026, CMS randomly selects 250 non group health plan records each quarter for a reporting audit, and the agency issued its first penalty notices in March 2026. Penalties run up to $1,000 per day, per claim.

Those penalties fall on carriers and self-insured defendants, not on plaintiff firms. The effect on your firm is indirect and real. Carriers facing audit exposure push harder at settlement, ask for more claimant data, and hold up funding until their file is clean. Your staff absorbs the difference.

On the plaintiff side, the exposure has always been direct. Medicare has the right to recover conditional payments from the attorney who received the settlement proceeds. The MSP statute carries a private cause of action with double damages, and Medicare Advantage organizations have used the statute successfully against law firms. A missed Part C lien surfaces months after disbursement, after the client has spent the money, and the demand lands on your desk.

The work to keep and the work to hand off

Keep the work only your firm does. Case selection. Liability and causation development. Working up damages so the number reflects the whole life your client lost. Negotiation. Trial. The conversations where a frightened person needs a lawyer to explain what comes next.

Hand off the work with no legal judgment. Lien identification. Verification. Auditing charge listings for unrelated treatment. Medicare Secondary Payer compliance and reporting support. Negotiation with recovery contractors who do this all day and know when a firm is guessing.

Specialists move faster on this work because volume teaches them the shortcuts, the right contacts, and the arguments each plan type responds to. My company, Synergy, has done this for trial lawyers since 2008 for exactly this reason. Lien resolution fees are based on a percentage of the savings achieved, and Medicare compliance work is flat fee based, so the economics track the outcome rather than the hours. Several other firms do this work well. The choice of provider matters less than the decision to stop asking your paralegals to do a job the market already can do more efficiently.

Here is a practical starting point. Track how your team spends the next 30 days, in whatever detail you already capture, and separate the hours into legal work and administrative work (like lien resolution). Most firm owners are surprised by the ratio. Then price those administrative hours at what your people are worth and compare the number to what outsourcing costs.

Ten years later

This year on August 2, the anniversary passed quietly. I rode my bike, and I thought about the guys from my group who found me on the pavement and stayed with me until help arrived.

Cyclists still get hit. In 2024, drivers killed 1,103 cyclists nationwide and injured an estimated 52,887. Florida led the country with 208 deaths, the most of any state, and had the second highest fatality rate per capita. Behind each number is a person with a family, a job, and a set of obligations to other people.

One of those people is sitting in your case management system right now, waiting to hear from you.

I do not think the answer is working harder. Firms already work hard. The answer is deciding what your lawyers and paralegals should never touch again, moving the work to people who do nothing else, and spending the hours you get back on the case and on the client. The driver who hit me saw a thing in the road. Your client deserves a firm with the capacity to see a person.

🔧 What Can You Do?

If this feels overwhelming, you’re not alone. Synergy has spent decades helping firms like yours ethically and efficiently resolve complex lien issues. Our team knows the playbook recovery contractors use and how to beat them at their own game.

🔗 Want more insights like this?

If you’re a personal injury lawyer ready to scale, streamline, and move your practice forward exponentially, let’s talk. Join the Peak Practice Community, and learn how Synergy can help you eliminate settlement bottlenecks, resolve complex liens, and maximize recoveries. Learn more here: https://partnerwithsynergy.com/

Kyle Wright: How a Small Market Trucking Practice Outgrew Its County

Kyle Wright on trial training budgets, case selection, and the systems behind a specialized personal injury practice

Kyle Wright of Wisehart Wright Co. LPA built his injury practice in Sandusky, Ohio, halfway between Toledo and Cleveland. He skipped the big metro markets. He went deep on trucking while most firms chase volume across every case type. He puts six figures a year into trial training for a small group of lawyers. He paid for his own personal brand out of his own fees.

He recently joined me as a guest on the Trial Lawyer View by Synergy podcast to discuss his practice strategies. Here is how the pieces fit together, and what to apply in your firm.

The small market buys you trial reps

Erie County has fewer firms competing for injury cases than Cuyahoga or Lucas County. Wright treats the lower competition as a foothold. Win share locally, build capital, then repeat the model in new markets.

The bigger advantage shows up on the docket. Big county dockets bump civil trials. Reps get scarce. In smaller rural counties, Wright gets in front of juries.

“One of the benefits of trying cases in some of these smaller rural counties is the judges are surprised when the plaintiff’s attorney is willing to go to trial.”

If you practice in a secondary market, stop treating it as a ceiling. Treat the open docket as full of opportunities.

Specialization has a real entry cost

Wright did not announce a trucking niche and wait for the phone. He studied the federal motor carrier safety regulations. He went to every trucking seminar available. He joined the trucking groups. He read the books. He co-counseled with trucking lawyers he respected. Then he flew to Montana and spent three or four days behind the wheel of tractor trailers on a track. He had never driven a stick shift. The coach handed him the keys anyway.

What he brought home: how to secure a load, which pre trip checks the rules require, and how differently a loaded rig behaves next to a passenger car. Depth like this shows up in deposition questions your opponent does not expect.

One question decides most trucking cases

Carriers run telematics, speeding alerts, and electronic logs. The company sees the data. Wright builds his liability theory around the next step.

“You can have all the bells and whistles in place, but what are you doing with that information to correct the driving, to order additional training, to coach and work with the driver?”

Safety culture starts at the top and works its way down to the drivers. When a company collects warnings and does nothing, the failure belongs to the company. Point your discovery at coaching records, retraining, and internal notice. Those documents carry more weight with a jury than a fight over one driver’s conduct.

Trial readiness moves carriers before you file

Wright secured a 5.7 million dollar policy limit settlement pre suit. Head on collision. A minor left paralyzed. Early tender came from preparation, not luck.

He located and preserved video from a neighboring building showing the driver crossed left of center.
He shared the video with the adjuster early instead of holding it back.
He ordered expert reports before filing anything.
A life care planner spent time in the client’s home and built the plan around the real injuries.
He produced a day in the life video pre suit.

The carrier saw a file already built for trial. The message landed. Run your catastrophic files at litigation speed from the day of intake, and settlement value follows readiness.

Case selection narrows as the practice grows

Early in his career, Wright took risk on lower value files and worked them hard anyway. Growth changed the filter. Today he carries a smaller caseload of catastrophic cases and splits the work with one associate who wants to litigate, handles high end discovery, takes depositions, and does the research and writing. Fewer files. More resources per file. Faster movement.

A trial training budget with a real number attached

Most firms treat continuing education as a compliance line item. Wright treats it as case value.

$15,000 dollars per attorney per year for training
$35,000 dollars per year for himself
Every lawyer picks two of the best national programs, anywhere in the country
Two associates flew to California for the Trial by Human seminar

The old model kept knowledge at the top, partly out of fear of associates leaving with it. Wright rejected the premise. His lawyers work bigger cases because they carry the same training he does, and none of them have walked out the door with it.

Watch the second order effect. Attorney referrals now make up a bit over 40 percent of the cases he generates, and the share keeps climbing toward half. Lawyers refer to firms who get high value on hard cases. Training built the reputation, and the reputation built the referral pipeline.

“If you’re a personal injury lawyer and you’re not trying cases, you’re not getting the full value.”

He also studies on his own. For about a thousand dollars a year, he watches openings, cross examinations, and damages arguments from top trial lawyers on CVN while he is on the treadmill.

Personal brand inside a multi practice firm

Wright built Make It Right as a deliberate personal brand and funded it from his own fees. His partners backed the move, partly because firm money stayed out of it.

Structure makes the arrangement work. The firm operates as firms within a firm, with siloed budgets across injury, workers compensation, criminal defense, and probate and estate planning. Internal referrals move in both directions. His marketing drives direct searches and views for the whole firm.

He is honest about the limits. The setup holds because the practice areas do not overlap. His partner owns the most searched attorney name in the county on the criminal defense side, at a volume higher than Wright’s own intake.

Expansion follows the same logic. New offices get local lawyers from the community, working under the firm brand, instead of an out of town name on a sign.

Automation with a human checkpoint at every step

Personal injury work is process driven, especially in the first 60 days of a file. Wright works with software engineers on custom workflows.

Intake calls transcribed, summarized, and loaded into the case management system
Fee agreements populated automatically
Notice and preservation letters generated automatically
Staff verification required at each step before the file moves forward

His rule is simple. The system prepares the menial work. A person checks it before anything leaves the office. Efficiency gained on paperwork goes back into client contact.

Staff buy in decides whether the technology sticks

Wright learned this one the expensive way. He signed with vendors, rolled out products, and watched them fail because the people doing the work had no say in the decision.

“Had I had the staff involved earlier on in the process, I would have known that it wasn’t gonna work.”

Staff fear replacement. Wright brings them into the build, shows how their roles change, and asks what breaks in the current workflow. Nobody knows the process better than the people running it every day.

The defense is using AI too

Wright’s attorneys have flagged adjuster correspondence reading as AI generated. I pointed to a recent guest, a chiropractor, who described insurer models trained on medical records to argue case value down. Expect more of it. Your counter is accuracy in the record and human judgment on what the model missed.

Where Wright sees the next three to five years

Invest in trial and litigation. Invest in brand and marketing. Invest in technology. National competition for the same cases keeps growing, and firms willing to try cases keep the advantage. Trial lawyers are not getting replaced by software. The ones who prepare like Wright get paid for the difference.

🎧 Listen to the full podcast conversation on Trial Lawyer View here: https://partnerwithsynergy.com/podcast/kyle-wright/

🔗 Want more insights like this?

Understanding Medicaid Liens: Federal Protections Every Personal Injury Professional Should Know

How the federal anti-lien statute, three Supreme Court rulings, and the pro-rata methodology shape state Medicaid recovery in personal injury cases.

You might ask yourself a simple question when a state Medicaid agency sends a recovery letter for the full amount the program paid on a client’s behalf. How much of that demand does federal law actually allow Medicaid to recover? The answer is the framework that governs every Medicaid lien negotiation. It rests on a federal mandate, a federal limit, and Supreme Court decisions that have shaped what state agencies and their recovery contractors can collect from an injury victim’s recovery.

This blog post walks through that framework. The federal mandate, the federal protections that limit it, Ahlborn, and Wos. The goal is a working understanding of what state Medicaid can claim and what remains protected for the injury victim.

The federal mandate to seek third-party recovery

When a state participates in the joint federal-state Medicaid program, it accepts an obligation under Title XIX of the Social Security Act to seek reimbursement from liable third parties for injury-related medical expenditures paid on a beneficiary’s behalf. The governing language is at 42 U.S.C. § 1396a(a)(25)(H), which provides that to the extent the state has paid for medical assistance for which a third party has a legal liability to pay, the state is considered to have acquired the rights of the individual to payment by any other party for those health care items or services.

The same section requires the state to take all reasonable measures to ascertain third-party liability and to seek recovery when expected reimbursement exceeds the cost of pursuing it. The companion provision at 42 U.S.C. § 1396k(a) requires Medicaid beneficiaries to assign their rights to medical payment recoveries to the state as a condition of eligibility.

State Medicaid agencies meet this requirement with state-law third-party liability statutes that authorize recovery from settlements, judgments, and awards. Many of these statutes are aggressive in their drafting. They were written to give the state the maximum reach federal law would allow.

The federal limit: the anti-lien and anti-recovery statutes

The same Medicaid Act that mandates third-party recovery places hard limits on it. Two provisions are key. The federal anti-lien statute at 42 U.S.C. § 1396p(a)(1) provides that no lien may be imposed against the property of any individual prior to his death on account of medical assistance paid. The federal anti-recovery statute at 42 U.S.C. § 1396p(b)(1) provides that no adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the state plan may be made, subject to specifically enumerated exceptions.

The interaction between the third-party recovery mandate and the anti-lien provisions has driven most Medicaid lien litigation of the past two decades. State statutes that read the mandate broadly have sometimes reached non-medical portions of a settlement. The anti-lien statute, read on its own terms, protects those portions as the injury victim’s property.

The Supreme Court has held that the third-party recovery provisions create a narrow exception to the anti-lien rule. That exception is the only basis on which a state may reach a beneficiary’s settlement.

The Ahlborn Ruling

The Supreme Court first applied the anti-lien provisions to a state Medicaid recovery in Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006). Heidi Ahlborn was nineteen when a 1996 car accident left her with a catastrophic brain injury. Arkansas Medicaid paid $215,645.30 for her injury-related care. She later settled her tort case for $550,000 with no allocation between categories of damages.

Arkansas asserted a lien for the full $215,645.30. Ahlborn sued for a declaratory judgment. The parties stipulated that her total claim was reasonably valued at $3,040,708.18 and that the settlement represented one-sixth of that amount. They further stipulated that, if Ahlborn’s reading of federal law was correct, the state’s recovery would be limited to $35,581.47.

Writing for a unanimous Court, Justice Stevens held that the federal third-party liability provisions authorize recovery only from the portion of a settlement that represents payment for medical care. The remainder, including amounts for pain and suffering and lost wages, falls under the protection of the anti-lien statute. As the Court put it, the exception carved out by §§ 1396a(a)(25) and 1396k(a) is limited to payments for medical care, and beyond that, the anti-lien provision applies.

Ahlborn gave practitioners the first clear federal rule for arguing a reduction: the ratio of the settlement to the full value of the claim, applied to the lien, produces the reduction.

The pro-rata methodology

The Court did not prescribe a single formula for allocating medical and non-medical damages in an unallocated settlement. In a footnote, however, it endorsed the parties’ approach in Ahlborn itself, noting that the effect of the stipulation was the same as if a trial judge had found that total damages were $3,040,708.12 and that the settlement reflected a one-sixth recovery.

The California Supreme Court applied the same approach in Bolanos v. Superior Court, 87 Cal. Rptr. 3d 744 (2008). The court explained that the ratio of the settlement to the total claim, applied to the amount paid by Medicaid, produces the figure the state may recover. Practitioners now refer to this as the pro-rata methodology. It reduces a Medicaid lien based on the equitable principle that the beneficiary did not recover the full measure of damages.

The pro-rata formula has limits. A state Medicaid agency, or the recovery contractor acting for it, is not obligated to accept the practitioner’s valuation of the total claim. State statutes often establish procedures for substantiating that valuation, and some require the practitioner to put forward evidence of comparable verdicts, settlements, or expert valuations. The work of building a defensible pro-rata reduction starts at intake and continues through settlement.

The Wos reinforcement

State statutes after Ahlborn varied widely. North Carolina’s statute set a one-third default allocation to medical expenses from any settlement, without any mechanism for the beneficiary to challenge it. In Wos v. E.M.A., 568 U.S. 627 (2013), the Supreme Court struck the statute down as inconsistent with Ahlborn and the anti-lien provision.

The Court rejected the argument that a fixed-percentage default could substitute for an allocation. If a state arbitrarily may designate one-third of any recovery as payment for medical expenses, the Court reasoned, there is no logical reason why it could not designate half, three-quarters, or all of a tort recovery the same way. A statute that does not provide a procedure for determining the actual medical portion runs afoul of the federal anti-lien provision.

Wos also clarified the effect of a judicial finding or stipulation on allocation. When there has been a judicial finding or approval of an allocation between medical and non-medical damages, in the form of either a jury verdict, court decree, or stipulation binding on all parties, that is the end of the matter. A binding allocation forecloses the state from claiming more.

Where Synergy fits

Synergy resolves Medicaid liens for personal injury firms across all fifty states. The Synergy team includes attorneys and lien specialists who apply the federal framework, state procedural rules, and the pro-rata methodology to the demands sent by state agencies and their recovery contractors.

If you have an open file where the Medicaid lien hasn’t been reduced, send it over. Synergy will do a free reduction analysis.

Free Download: Medicaid Lien Resolution Fundamentals

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Liability Settlements and Medicare Advantage Plans

Most plaintiff’s attorneys understand that Medicare is a secondary payer when a client is injured in a workers’ compensation case. They also understand that Medicare’s interests need to be considered before settling a workers’ compensation claim that includes future medical expenses.

The same principles apply in liability cases but the guidance is far less clear.

Under the Medicare Secondary Payer (MSP) Act, Medicare is generally a secondary payer when payment has been made, or can reasonably be expected to be made, under a workers’ compensation plan, liability insurance, or no-fault insurance. CMS expressly identifies liability insurance, including self-insurance, as a primary payer to Medicare in these circumstances.

The problem for plaintiff’s attorneys is that CMS has developed a substantial body of guidance concerning future medical expenses in workers’ compensation settlements, while providing comparatively little specific guidance concerning liability settlements that contain a component for future injury-related care.

That does not mean the MSP issue disappears in a liability case. It means attorneys have to look carefully at the guidance that does exist.

Workers’ Compensation Provides a Road Map

CMS has made its position clear in the workers’ compensation context. A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) allocates a portion of a settlement to pay for future medical expenses related to the work injury that would otherwise be covered by Medicare. Those funds must be appropriately exhausted before Medicare becomes responsible for future treatment related to the settled injury.

Importantly, CMS states in its current WCMSA Reference Guide that Medicare remains the secondary payer until the settlement proceeds are appropriately exhausted. The guide also explains that a claimant receiving a workers’ compensation settlement that includes future medical expenses must take Medicare’s interests into account.

There is no comparable CMS approval process for liability MSAs. That distinction is important.

A liability settlement is not a workers’ compensation settlement, and plaintiff’s attorneys should not assume that the WCMSA rules can simply be transferred wholesale to a personal injury case. The underlying claims, defenses, settlement dynamics and applicable state laws are different.

Nevertheless, the workers’ compensation guidance provides an important window into how CMS views its secondary payer rights when a settlement compensates a Medicare beneficiary for future injury-related medical care.

The fundamental concept is straightforward: Medicare should not be paying for medical care that another payer has already paid for through a settlement.

Part C and Part D Impact the Analysis

Medicare Advantage organizations also have statutory and regulatory rights to recover payments made when another payer should have been primary. The recovery rights granted by the Medicare Secondary Payer statutes are similar for original Medicare, Medicare Advantage and PDP plans. 

CMS has made it very clear that MSP coordination is not limited to traditional Medicare Parts A and B. In November 2025, CMS announced enhanced data sharing with Medicare Part D plan sponsors concerning WCMSAs. Beginning in February 2026, CMS began providing Part D sponsors with additional WCMSA-related prescription drug information that can be used to improve coordination of benefits and prevent improper Part D payments.

The significance of this development goes beyond workers’ compensation. It demonstrates a broader trend toward more sophisticated coordination between CMS, Medicare Advantage organizations and Part D plans.

The current WCMSA Reference Guide (Version 4.6) also specifically addresses Medicare Advantage and Part D plans. CMS instructs those plans to conduct MSP investigations when they are notified that a WCMSA has been approved and to determine whether particular treatments or medications should have been paid from the WCMSA rather than by the plan. CMS also advises beneficiaries that their Medicare Advantage or prescription drug plan may contact them or their administrator to determine which expenses are covered by the WCMSA. It warns that failure to respond to the plan’s investigation efforts may result in coverage being delayed or cancelled.

The lesson for plaintiff’s attorneys is not that CMS has created a liability MSA requirement. It has not. The lesson is that post-settlement coordination is becoming more sophisticated—and the payer that ultimately receives the claim may have more information about the settlement than it did in the past.

Section 111 Gives CMS Visibility Into the Settlement

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act adds another important piece to the analysis.

Section 111 requires applicable liability insurers, self-insured entities, no-fault insurers and workers’ compensation entities to report certain settlements, judgments, awards and other payments involving Medicare beneficiaries. CMS explains that this reporting helps the government determine when another payer is primary to Medicare and supports MSP recovery efforts.

In other words, the settlement does not simply disappear once the check is issued. CMS has information about the underlying claim and the payment. CMS can use that information in coordinating benefits and identifying Medicare payments that should have been the responsibility of another payer. For attorneys, this makes it increasingly difficult to treat Medicare as an issue that exists only at the time of settlement. The more important question is whether the settlement has been structured in a way that makes sense when the client begins receiving medical treatment after the case is closed.

What About Future Medical Expenses?

This is where liability settlements present the greatest uncertainty. Suppose a Medicare beneficiary has sustained a significant injury. The settlement includes compensation for future surgery, therapy, physician visits, prescription medications or other injury-related care. The settlement agreement may allocate a portion of the recovery to those future expenses.

What happens when the client subsequently begins treating and Medicare or the Medicare Advantage plan is asked to pay? There is no CMS-approved liability MSA process that gives the plaintiff’s attorney a definitive answer. That does not mean counsel should ignore the issue. Instead, counsel should consider whether the settlement should include a defensible allocation of future medical expenses and whether the file should document the methodology used to arrive at that allocation.

Depending on the facts, that analysis may include:

The client’s age and Medicare status

The nature and severity of the injury

The medical records and treatment history

The physician’s prognosis

Anticipated future surgeries and procedures

Future therapy and rehabilitation

Prescription medications

The likelihood that particular treatment will be Medicare-covered

The expected duration of future treatment

The value of the settlement as a whole

The extent to which the settlement actually compensates the client for future medical expenses.

The objective is not to manufacture a “liability WCMSA.” The objective is to create a reasonable, well-documented record demonstrating that Medicare’s interests were considered. There is no one size fits all solution when it comes to addressing post settlement injury related care in a liability settlement.

The Bottom Line

A liability settlement involving a Medicare beneficiary should not be treated as though Medicare’s involvement ends when the settlement check clears. For past medical expenses, counsel needs to identify and resolve the applicable Medicare, Medicare Advantage and Part D recovery claims. For future medical expenses, counsel should consider whether the settlement adequately accounts for the client’s anticipated injury-related care and whether the file contains sufficient documentation to demonstrate that Medicare’s interests were considered.

The law surrounding liability settlements and future medical expenses may still be developing. But the direction is clear. More data. More coordination. More sophisticated recovery efforts. Plaintiff’s attorneys who address these issues before settlement will be in a far better position than those who wait until the client’s first post-settlement medical bill is denied.

Synergy is the leading MSP compliance partner for plaintiff personal injury firms all across the country. Top trial lawyers and paralegals depend on Synergy’s industry leading team to assist them in compliantly closing files involving Medicare beneficiaries. Learn more at https://partnerwithsynergy.com/services/future-medical-damages/medicare-set-aside-msa/

Written by: Rasa Fumagalli JD, MSCC, CMSP-F | Director of MSP Compliance at Synergy.

How Lien Resolution Leaks Profit

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.

Download the 5 Tips for Navigating Self-Funded ERISA Reimbursement

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ERISA Tips and Tricks for Attorneys and Paralegals

How to build leverage before you ever talk numbers.

Resolve a self-funded ERISA lien on your own and you quickly learn firsthand how hard the fight can get. Ask trial lawyers and paralegals to name the toughest healthcare lien on their desk and the answer usually comes back the same, self-funded ERISA. The rules are different from other types of plans, federal law tilts the field toward the plan, and skilled recovery contractors work the file full time. Here are the tips and tricks to shift the leverage back to you and your client.

Start With Two Threshold Questions

Every ERISA analysis begins in the same place. First, does ERISA govern the plan? ERISA reaches nearly all employer-sponsored health plans. Federal employee plans fall under FEHBA, and state government and church plans fall under state law.

Second, does the employer self-fund the plan? Self-funded plans run on employer and employee contributions, and ERISA preempts state law. Fully insured plans buy coverage from a carrier, which leaves them subject to state subrogation statutes and common law equitable principles. The answer changes your entire strategy.

Four Supreme Court Decisions Set the Rules

Knudson in 2002 limited relief under section 502(a)(3) to remedies historically available in courts of equity. The settlement proceeds sat in a special needs trust outside the beneficiary’s possession, so the plan’s restitution claim looked legal rather than equitable and failed.

Sereboff in 2006 confirmed plans enforce reimbursement provisions through an equitable lien by agreement or a constructive trust.

McCutchen in 2013 held plan terms control. Neither general unjust enrichment principles nor the made whole and common fund doctrines override clear contract language.

Montanile in 2016 addressed traceability of funds. Once a participant spends settlement proceeds on nontraceable items, the plan loses any path to general assets. An equitable lien by agreement attaches to a specific identified fund, and dissipation of the fund ends the remedy.

Read together, these US Supreme Court decisions create one working rule. Plan language wins, and only the written plan tells you how strong the reimbursement claim is, without that information you are shooting in the dark.

The 1024(b)(4) Request Is Your Leverage

Under 29 U.S.C. section 1024(b)(4), a plan administrator must produce, on written request from a participant or beneficiary, the summary plan description, the annual report, any applicable bargaining agreement, trust agreement, contract, or other instrument under which the plan operates.

Three key things about a 1024(b)(4) request:

Send the request to the plan administrator. The statutory duty runs to the administrator alone, never to the third-party administrator and never to the recovery contractor. Rawlings (Machinify), Optum, and Conduent have no obligation under the statute.
Send the request early. Vendors issue demands designed to create urgency before anyone reads the plan. Delay surrenders leverage. Early requests set the pace, expose thin claims, and protect your client’s net recovery.
Calendar the thirty-day deadline. 29 U.S.C. section 1132(c)(1)(B) provides a discretionary penalty of up to $110 per day for noncompliance, as adjusted under 29 C.F.R. section 2575.502c-1. Courts impose these penalties.

Ask for the Master Plan Document, Not Only the SPD

The master plan document governs. The document defines reimbursement rights, funding structure, equitable limitations, and enforcement mechanisms. The summary plan description serves a different purpose as participant-facing disclosure under 29 U.S.C. section 1022(a).

An SPD does not create reimbursement rights absent from the formal plan. Under CIGNA Corp. v. Amara, courts have held missing, outdated, or conflicting SPDs undermine enforcement, particularly where the participant never received clear notice of a reimbursement obligation.

Request the full set: the SPD, any summary of material modifications, the Form 5500 annual report, the plan document, any trust agreement, any collective bargaining agreement, and the insurance contract for plans funded through purchased coverage. Vendors build demands on excerpts and selective summaries. Courts require the complete operative documents.

Where Reductions Come From

Once the documents arrive, read for pressure points like:

Abrogation language. Look for explicit disclaimers of the made whole and common fund doctrines. Silence on either doctrine hands you a reduction argument.
Ambiguity. Unclear reimbursement or subrogation clauses are construed against the drafter.
Scope limits. Hold the plan to the recovery rights written in the document and no further.
Equitable defenses. Made whole and common fund still carry weight where the facts support them.

The Administrative Cost Nobody Accounts For

Every step above consumes staff time. Someone identifies the plan, locates the administrator, drafts and mails the request, calendars thirty days, follows up, reads hundreds of pages of plan language, builds the reduction argument, negotiates with the vendor, and documents the file for the closing statement. Multiply the hours across a caseload of two hundred open files. None of those hours generate a fee.

Paralegals hired to develop cases spend afternoons chasing plan administrators. Lawyers with trial settings spend evenings reading Form 5500s. Firms absorb the cost quietly, and clients absorb the difference whenever a reduction argument slips through.

Moving lien identification, verification, and resolution to a dedicated team changes the math. Your staff return to discovery, deposition prep, client communication, and case value. Your clients receive reductions argued by people who read plan documents every day and track vendor behavior across thousands of files.

Your Next Step

Pull one open file with a self-funded ERISA plan. Check whether anyone requested the master plan document. Check the date. If the thirty days ran without a response, you already hold leverage nobody has used yet.

Synergy resolves ERISA, Medicare, Medicare Advantage, Medicaid, FEHBA, military, hospital, and provider liens for personal injury firms across all 50 states.

What reduction percentage does your firm average on self-funded ERISA plans right now? Share your experience in the comments.

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KRLG Injury Lawyers: How to Scale a Personal Injury Law Firm Rapidly (and Effectively)

Austin Kurtz and Brian Riley founded KRLG Injury Lawyers in Arizona in early 2024, after roughly a decade each inside larger plaintiff and defense-side shops. Two years in, they run a team across Arizona and Colombia. They have grown very rapidly and effectively by focusing on the right business principles.

On a recent episode of the Trial Lawyer View by Synergy podcast, they walked me through the operating decisions behind the growth. Here is what stands out for any firm leader thinking about the next stage.

Small cases fund the firm

Most personal injury firm owners build around one assumption. Land the big cases and the numbers take care of themselves. Eighty percent of revenue from twenty percent of files.

KRLG runs where the opposite holds true today. Add up every one of their largest cases and largest fees since launch. The total sits under three percent of firm revenue. The rest arrives in the mail. Policy limit settlements, most days of the week.

Riley expects the 80/20 split to show up eventually, as the larger files mature through litigation. Right now the picture looks different, and he is direct about why.

“our systems, especially on the smaller to mid-size cases, are so refined and so tight.”

Your operating model decides which cases make money for you. A file worth $25,000 loses money at one firm and turns a reliable profit at another. Same file. Different process.

Kurtz saw both sides. Before the two of them joined forces, he passed on files Riley took happily. Riley taught him how to run them at a profit, and Kurtz says so on the record.

Three things worth checking in your own firm this quarter:

• Cost to work a case, broken out by case type, not a firm-wide average.

• Days from signup to demand, then demand to first offer.

Speed is an obligation to the client

Riley treats case velocity as a duty owed to the injured person, not an internal efficiency metric.

“as soon as that accident happens, that’s when in my opinion they deserve that money.”

A hundred thousand dollar offer today is worth more to a client in pain than the same offer a year from now. Bills are stacking up in the meantime. The insurer’s incentive is to delay and delay, so the pressure has to come from your side.

Look at your cycle time reports again with the client in mind rather than the balance sheet. The number means something different.

AI is not writing your demand letters yet

Kurtz is blunt about the gap between what gets claimed on stage and what happens inside firms.

“we’re not going to lie and say, yeah, AI writes all our demand letters from scratch.”

His answer is a stack, not a single product:

• Filevine templates generate the first draft.

• Bilingual paralegals in Colombia review and finish the work.

• Supio and records review tools built into Filevine support negotiation with objective evidence pulled from the file.

• Riley watches AI intake closely, where one system opens claims, orders the police report, and contacts multiple providers at the same time.

Nearshore hiring is the bridge. AI improves every month and still falls short of the pitch, so Kurtz staffed the gap with people while the tools mature. He puts his Colombia team up against any paralegal in Arizona.

Riley applies two filters before signing anything:

• Does the tool fit the existing tech stack and standard operating procedures? If not, one of the two has to change, or the deal dies.

• How is it billed? He prefers a la carte pricing. He does not want a medical records review charged against a $25,000 file settling for policy limits.

Your case management system is a product you maintain

Kurtz edits Filevine himself. Daily in the early days, roughly monthly now. He expects to make an edit from a partner trip to Cabo.

“we see something, we fix it.”

Most owners never open the back end. He treats configuration as owner-level work because reporting, dashboards, and firm speed all trace back to it. One percent improvements compound when the person making them understands the caseload.

Professional courtesy as a referral channel

Riley keeps litigation caseloads per attorney small on purpose. Smaller caseloads make responsiveness possible. Disclosure statements on time. Discovery responses on time. Demands and mediation statements with real reasoning behind them. No hostile email.

The payoff surprised him. Defense attorneys refer cases to the firm. Riley has represented three or four defense lawyers on their own injury claims this year.

Defense counsel sending you their friends and family is a credibility signal no advertising budget buys.

Client access, designed on purpose

Every attorney hands the client a Calendly link at the start of the case. Clients book time whenever they want.

“Don’t tell me you can’t get a hold of me. You have a link that’s evergreen.”

The firm works in pods. An attorney, a paralegal, and a legal assistant reach the client within 24 to 48 hours of signup. Once a case resolves, it moves to a team focused on finalizing liens.

They also pulled access back where it hurt them. Personal cell numbers came off the business cards after one too many 1 a.m. text messages. Structured access held up better than open access.

Culture your team sees

A Vesta board sits outside Riley’s office. Every settlement entered into the system sets it rattling. The whole office looks up. A newer attorney’s six figure result gets attention. So does a $5,000 resolution from a senior lawyer, with some teasing attached.

Small mechanism, real effect. Wins become visible without a meeting on the calendar.

The founders are the bottleneck

Asked what has to go right next, Kurtz answered in one word: scaling.

“you’ve got to scale Brian and I.”

Steps already taken include two senior trial lawyers hired inside a three month window to mentor younger attorneys, a different approach to marketing spend, and operational managers added by department.

Riley wants role separation to go further. Pre-lit lawyers on pre-lit. Litigators on litigation. Trial lawyers on trial. Both founders currently work cases, market the firm, run the business, and try to sharpen their trial skills at the same time. Letting go of one of those is the hard decision ahead of them.

Their view on where the industry goes

Kurtz rejects the idea the traditional law firm is finished.

“I think tech is making lawyers better. And I think it’s allowing a greater access to justice.”

Large firms turn slowly. Smaller operations change direction in a day. His bet is on more of the second kind, and on more injured people finding representation as a result.

Riley’s version is simpler. Stay flexible, keep building skill, and worry about the disruption when it arrives rather than before.

The takeaway for your firm

Your profit model is a design choice. Kurtz and Riley chose systems tight enough to make ordinary cases profitable, technology they configure themselves, staffing to fill the gap AI has not closed, and a reputation with opposing counsel worth referrals.

None of it required a headline verdict.

🎧 Listen to the full podcast conversation on Trial Lawyer View here: https://partnerwithsynergy.com/podcast/austin-kurtz-brian-riley/

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If you want to grow and scale your law firm more effectively, consider partnering with Synergy for lien resolution. Learn more at: https://partnerwithsynergy.com/liens/

The Cost of Keeping Lien Resolution In-House

You might ask yourself why a law firm would have their client pay someone else to resolve a lien it is perfectly capable of resolving on its own. It is a fair question, and the honest answer has less to do with capability than with economics, specialization, and the obligations that attach to a firm the moment it accepts a case.

The Obligation Starts at Case Acceptance

Given the law, a firm must track liens asserted against a client’s personal injury claim, and in some instances has an affirmative duty to investigate and identify possible liens. Medicare and Medicare Advantage plans are the clearest examples. The firm then must determine whether a lien holder 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.

The larger problem, given the distraction it creates, is that firms often wait too long to begin negotiating reimbursement. That delay pushes back disbursement to the injury victim, and the injury victim is the person least equipped to absorb the wait.

Know Who You Are Actually Negotiating Against

When you resolve a lien, you are either dealing with a government benefit health plan or with an aggressive recovery vendor acting on behalf of a plan. Medicare, Medicaid, and FEHBA can be time consuming and slow on the government side. Negotiating against recovery contractors, including Machinify (formerly Rawlings), Katch (formerly Equian), Optum, and Conduent, is frequently harder.

These are large corporations whose SOLE reason for existence is to recover dollars from an injury victim. They have deep pockets and large staffs pursuing nothing but lien reimbursement, which makes for lopsided battles. Their business model relies on the fact that a trial lawyer is fighting them with one hand tied behind their back, short on time and short on specialized knowledge. The health insurance industry recognized this asymmetry decades ago and hired specialists. Plaintiff firms largely did not.

The Questions Every Lien File Raises

Subrogation law is a dynamic and evolving area, and each lien type carries its own nuances. Add Medicare, Medicare Advantage, Medicaid, ERISA, FEHBA, military, hospital, provider, and private health insurance claims together and the volume of law a single firm has to track becomes overwhelming. For any one case, the questions include the following.

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?

For non-government plans, does state or federal law apply, and is it ERISA, FEHBA, FMCRA, or some combination?

Can the plan or the vendor actually prove it is the type of plan it claims to be, and prove its recovery rights under the law?

The Ethical Layer

What are the ethical rules that govern this work? ABA Model Rule 1.1 requires a lawyer to bring the knowledge, skill, thoroughness, and preparation necessary to the representation, and lien resolution falls inside that duty. ABA Model Rule 1.15 can be read to impose a duty to safeguard disputed funds when a lien holder claims an interest in a settlement.

Neither rule requires a firm to develop in-house subrogation expertise. Both require the firm to make sure the work is handled competently, whether by the firm or by a qualified partner.

The Economics Most Firms Never Price Out

Every business seeks to decrease operating costs and increase efficiency. Personal injury firms are no different. The large amount of time a personal injury firm devotes to post-settlement lien resolution typically creates a loss at the firm’s bottom line, because that time is absorbed rather than billed as a client expense. Outsourcing changes all of that. In most states, the cost can be passed on to the client the same way the cost of retaining an expert is passed on.

There is a second economic effect that shows up later. 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 with a bad taste in their mouth. Post-settlement impressions impact reviews. Satisfaction with how a lien was resolved is often what produces the 5 star Google review, referral or the repeat matter.

The Bottom Line

Outsourcing lien resolution is not simply delegation. It is a decision about where a firm spends its time and how it protects the net the client actually takes home. The law is complex, it changes, and the parties on the other side are organized specifically to make resolution difficult. A trial lawyer time is better spent moving cases toward settlement or trial.

The next question for any firm is which liens to keep and which to send out.

Download the White Paper, Why Should Personal Injury Law Firms Consider Outsourcing Lien Resolution

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