Monday, March 03, 2003

Ankur Goel writes:
In one of my MBA classes, we're studying the case of Progressive Insurance who have designed their payment process to avoid lawyers as much as possible. It's no secret that a claimant with a lawyer will get more in a settlement or in court
than a claimant without a lawyer. What Progressive does is try to get to the claimant as soon as possible (within a 9 hour target) so that s/he will be happy to have the money in their hands and not worry about getting bad service from their insurance company and trying to find a lawyer. I guess my point is this - who's happier: (a) the claimant who gets served really quickly but gets less money, or (b) the claimant who has to drag out payment from the insurance company, hassle with contentious parties, but gets
2-3 times more money? How much is time worth in this equation?

An interesting question. I used to work for a guy who said that it didn't matter how much you got the client as much as how quickly you got it. Like most other things, it's a case by case question, as well as a question of degree. For instance, if I can settle a case today fo $6,000, but if I wait 6 months I could probably get $8,000, then maybe it's not worth the wait. However, if I wait 6 months with a good chance of getting, say, double the money, then maybe I should wait and play it out a bit longer. Ultimately, it's a question that the client should resolve.

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