Dan Miner (00:05):
Hello and welcome to another edition of the Leverage report. I’m Dan Miner, CEO of Case Works, and I’m joined by Devin Downey, co-founder, president and CEO of Blue Sky Legal. Devin, thanks for joining us today.
Devin Downey (00:16):
Hey Dan, thanks for having me.
Dan Miner (00:18):
So Devin, just want to start, could you maybe talk a little bit about your background as well as Blue Sky Legal and what you guys are doing there?
Devin Downey (00:24):
Sure. My background was working in large advertising agencies about 15 years. Started out in digital marketing back in San Francisco in the late nineties. Progressed from there to working in large brand agencies, working on accounts like Wells Fargo, bank of America, Hilton, worldwide, FedEx, and so I had a lot of cross industry experience and then a law firm got in touch with me about coming on board as their chief marketing officer, so I was the chief marketing officer for Ba,ron and Budd for about seven years. At the point that Covid hit, I started thinking, well, things have slowed down quite a bit. Maybe I could do this for multiple firms and with Baron and Budd’s blessing, I went out and started an independent agency, Blue Sky Legal, where we do both mass tort case acquisition and personal injury case acquisition from the advertising through the intake.
Dan Miner (01:15):
Very good. So Devin, we talked a few times at various conferences outside of the conference environment and one of the challenges that I often see in this space is your side of the business unfortunately doesn’t get the feedback loop from our side of the business. It becomes this siloed set of activities where you’re doing the case acquisition, we’re doing the case development, and unfortunately in the end it’s who’s at fault when cases don’t get resolved. We just published a white paper on fallout rates and attrition and we had a webinar on the same topic, but would love to get your perspective on how can we work together? How can we be partners have that feedback loop to actually solve these problems for the greater good.
Devin Downey (01:54):
It is something we’ve talked about over the last year together. I think that the research that you recently put together is really valuable and that people should definitely seek out that white paper. One of the key data points you had in there was that attrition in terms of fallout of cases from 2020 to 2024 looks like it’s going to be about 30%. That’s massive. And I think working within a law firm, I had that advantage as a marketer to sit down with the litigation folks because we were doing both the marketing and as a firm. We were also doing litigation, which can be unusual in the mass tort market, but I got a lot of feedback and I was able to look at sources like look at TV and radio versus looking at digital and looking to see if there was a fallout. Early on, we implemented one of the first online screening intake processes where people could respond to the ad, we’d send ’em a link, they could provide more information, go through the screening process, and then we were serving up the retainer for them to sign.
(02:53)
So I was able to look at that and say, okay, for people who hadn’t actually talked to an intake agent, what did the fallout look like versus people who had started with a conversation with an intake person. Remarkably, we didn’t see a ton of difference at that point. I think that story would be a little bit different now. And so when we’re thinking about attrition and what’s occurring and all of the great research that you presented, I think everything’s been changed by the lens of Camp Lejeune prior to Camp Lejeune. You’re going to always see that kind of fallout rate. You’re going to see the attrition on any mass to, and that should be somewhere in the 20 to 40% range as you’re getting through medical records to the point where you can consider a case truly compensable and you’re looking at settling it. But early on it’s a scenario we’re going to go through this war of attrition, if you will, from medical records signing to medical records to medical records review, and then being able to get to the point where the plaintiff’s fact sheet is at least in somewhat completed form that process.
(03:54)
It’s always looked to be somewhere in that 40% range. It’s just that the cuts are getting so much deeper as you go through the different processes. So it’s really about where you’re measuring on that continuum and I think there’s little argument to be that it’s much worse than it used to be or little argument against that. That is, and when we think about that feedback loop that you mentioned, the feedback is absolutely critical. That’s where I think working between a marketer and working with intake and then also working with someone who’s in the workup process, whether it’s an outsourced company like your own or whether it’s with the firm itself, we can all of a sudden get a different lens to look at our lead generation programs is one source contributing to far more fallout than another? And we’ve seen that. We’ve seen that in our own advertising campaigns where we think we’re doing really well, we think the intake’s gone really smoothly, and then we find out that one source for us in terms of a channel that we’re marketing, it’s falling out at a rate that might be twice as much as another, and all of a sudden we’re looking at it as what is that cost per, and I think you’d say compensable, but I would say actually kind of cost per retained because we’re too early to know what’s going to truly be compensable.
(05:07)
But that case that you’ve gone through at least the initial medical records review and it’s the case you want to continue to retain at that point and that metric, that feedback loop for us has only started to occur with third party firms in the last year or so, and it’s been invaluable for us to be able to deliver what’s a much better final plaintiff to the firm based on where we get that leap from in the very beginning.
Dan Miner (05:32):
One of the things that we’re seeing more and more of is that the incentives were extremely misaligned. In the past, if you were sending me bad cases and I was still working them up, there was no incentive for me to tell you that they were bad because at that point I’m still getting paid for that workup. It’s cutting
Devin Downey (05:48):
Down on your volume.
Dan Miner (05:50):
Yeah, that dynamic is changing though. I think the law firms are starting to put more rigor on it. One of the things that we see the need for just simple identity validation, and so we do that on our own. I think we’re starting to see that trend across the board where identity validation is an actual key component to make sure that this is indeed a valid human being and then that enables us to request records. And so I think the partnerships can be, Hey, we caught some stuff or we caught some traffic that just isn’t really showing that it’s a valid human being. Let’s pass that back because when all is said and done, we want to work on cases that are going to get compensation for those who’ve been injured and not spend our time on unfortunately cases that just aren’t viable or for people who might be trying to truly be fraudulent. And so I want to kind of get your thoughts on some of that partnership as well and where you see some of the activity kind of going back and forth between the upstream guys and the case development teams like ourselves.
Devin Downey (06:41):
Yeah, I mean from the initial lead form, if it’s digital advertising for instance, what we’re seeing is that we’re dealing with data and we’re looking for accuracy, right? We’re looking for valid data initially on the front end from a marketing perspective, we’re putting in validation tools. Does this email address seem to align with this phone number? Are the person’s responses, are they congruent with the following pieces of information we’re gathering from them? These are all the things that could be discovered in the marketing process. Do we have compliance? Are we utilizing trusted form so that we can go back and prove that we’ve got compliance to contact these folks? All of these things are key, but when you think about what your tools provide on the backend, once that person has gotten through the intake process, it’s really debatable where it should occur. Should it occur prior to the intake in terms of identity resolution?
(07:30)
Should it happen after the intake? Regardless of how we look at it, the greatest cost in the whole process typically for litigation firms is the workup. If you are at that situation where you can preemptively stop ahead of that process, get a feedback loop to the marketing agency so that they don’t continue to make the same mistake, make sure your intake is aligned properly, that is invaluable in the firm. But the firm has to realize, and I think this is where a lot of problems had occurred, the firm has to realize what the true market value of that plaintiff is in terms of what it costs to recruit that person. And so if you’re thinking about what the cost should be from a non mature perspective, I should have plaintiffs for X, Y, Z tort at $3,000 and they should be completely vetted and be compensable. Well, that’s just not the reality of mass tort and it never was. It’s more of a reality that you’re probably looking at double that for the type of plaintiff that you really want. And even at that price, it’s a great deal, it’s fantastic, but let’s just go into it with our eyes open and let’s not let litigation funders think it’s something else. Let’s be realistic upfront about what the true cost is to recruit a good compensable plaintiff, a great case versus what is it just to get somebody signed. They’re just two different realities altogether.
Dan Miner (08:55):
I often look at it as there’s a place for lower cost marketing, lower cost retainers that may have higher fallout with all due respect to Walmart. I call it the Walmart model, where you’re able to get things at a much lower cost versus say the Neiman Marcus model that may have put more rigor on it. I mean, it’s going to be that double cost per sign retainer that you’re referring to, but might come with is likely going to have much less fallout, but is going to come with an increased cost at the front end of the process. And so their business for both. The challenge is making sure that your litigation funders are aware of what are those fallout rates and what is the type of marketing organization you’re working with. And I think you touched on that quite nicely there. I want to switch gears to the back end of the process, and I know you don’t play in the back end of the process, but it’s intentional.
(09:40)
And so one of the challenges that many of these firms are going through with settlements, that settlement in the hernia mesh space just kind of announced three earplugs kind of going through settlement. There’s other settlements that are ongoing, and one of the things these firms are going to struggle with is getting in touch with these plaintiffs, getting in touch to get these documents signed. They’re also then going to run into dual rep issues, dual rep being a huge, huge problem in the space. I’m going to make an aggressive comment here that is maybe misinterpreted by some, but I think is actually the reality is dual rep doesn’t happen at the end of the process. It happens at the beginning. Dual rep happens at the beginning of the process. It’s a problem and a pain point. We’ve heard cases of in the opioid space where a client has signed with eight or nine law firms and we’re hearing the same thing in Camp Lejeune, A client has signed with five or six potential firms in the Camp Lejeune space. How do you solve for that? What are the tips and tricks that you’re putting in place? There’s no great answer. We know that
Devin Downey (10:28):
There is no great answer. I’ll tell you what I think occurred that made this happen, and I’ll go back to the early days of Roundup. And Roundup was one of the first cases that was fantastically low cost to attract on Facebook. And there’s a book out in the market called the Facebook Effect. Well, I’ll talk about a different Facebook effect. What happens when you get a conversion on Facebook, you get a plaintiff through the, excuse me, a potential plaintiff through the process of making an inquiry is that you’ll have a pixel on your page that says, Facebook no longer target this person with our ads. Don’t retarget them. We’ve already got this person in our system. However, what Facebook figured out is is hey, if you buy a pair of shoes, you’re more likely to buy another pair of shoes from another brand. So as a result, what Facebook was doing is every time that there was a conversion on Roundup, they’re going to serve that person more and more Roundup ads.
(11:27)
It was a Thanksgiving. I was at my in-laws and I did my own little test and I inquired to a bunch of different ads and all of them being mass to see what would happen. And for anybody whose intake had to call me, I apologize. But in any case, what I found was is that my feed through scroll got all the way to where I had nine different mass tort ads in one scroll, and this was when Facebook would stop you. They would only let you scroll so far. And what you would obviously have if you were a potential plaintiff is you would have this opportunity to shop. And as you’re shopping, does it matter to you that you’re shopping on the inquiry front and talking to the firm, or do I just put in an inquiry and sign retainers with a bunch of firms?
(12:12)
I don’t really know who’s leading this class action in terms of the way they often think about it, and maybe one of ’em can get me a better deal than another. But that’s that media saturation thing. That’s the Facebook effect. Truly low cost, cost per contract, more problems potentially coming through, but it is the reality that you need to participate in that market in order to get a reasonably priced plaintiff. At the end of the day, however, camp Lejeune was a completely different animal. The Facebook effect as I described it, having that ad served to the same person over and over again, but from different firms, it occurred on daytime tv. I couldn’t watch CNN or Fox News in 2022 or the beginning of 2023 without seeing a Camp Lejeune commercial on every single break. It was absurd. It’s the largest direct response campaign in the shortest period of time ever.
(13:07)
So you think of that kind of velocity curve of ads in market for any given product. Nothing has suppressed Camp Lejeune other than maybe some campaigns in politics potentially, but for the most part for direct response advertising, it’s never been seen before. And I think that’s what caused a lot of the dual reps is just the nature of the campaign itself and the disparate kind of impact it’s had on 2023 and 2024. If you talk to firms, they’ll say most of the Camp Lejeune plaintiffs that we retained, we retained them from our 2022 advertising, the ones that came in in 2023. We didn’t retain a lot of those because those were people who were shopping, had already been turned down by other firms or had signed up with another firm and were a dual rep and easily recognized in the process, but only after it was too late to have stopped from signing them or too late to stop from working up those folks.
(14:03)
I mean, ultimately, I think the medium does have a major impact, and I think the services that Case Works and others offer to be able to get in front of the heavy lifting that occurs in workup processes will solve for a problem that marketing can’t solve for. Marketing does not know how many times this person has signed up. Intake company can only take that person at their word, but it’s the data that occurs downstream of that that can start to tell the story and say, let’s not invest a lot of hours in this person because things look fishy. Or ultimately, I have the data to say this is not the plaintiff that we want to move forward with.
Dan Miner (14:43):
And going back to our earlier point, that’s then the importance of that feedback loop to let you know, Hey, we caught a bunch of dual reps. You may not have caught them. We asked the questions a few different ways. We caught some things where they tripped up or they even shared a retainer agreement with another firm. We want to inform you. Maybe that allows you to tweak your marketing spend. Maybe you actually pause it and provide the value in that capital back to the law firm because it’s just not a ROI positive of activity.
Devin Downey (15:08):
Absolutely. And what you mentioned about delivering value, the key to this, I mean, in our business marketers were disproportionately compensated for doing things that weren’t as difficult as they seem. And the way that I say that is you could buy a remnant lead through something co-registration where somebody has submitted their information for, let’s say it’s a giveaway and they got a T-shirt at a football game in return for filling out a card. Now marketers, let’s call ’em call centers, will call those people and they’ll see if there seems to be anything that they are qualified for that that company has to offer. Now a lead comes through and for Camp Lejeune, those leads might’ve been as low priced as $2. And then what would they do is they’d have an international call center call and they would just boil the ocean down until they found out of a hundred leads, that one person that seems plausible that they might actually qualify with just a little bit of coaching.
(16:09)
And then once they had that person, they would warm transfer them to an intake company who was completely unaware of what was happening and goes through that process. The person answers all the questions, right? The lead still only costs $2. The amount of manpower that went into it was about $5, and then ultimately they’re getting paid out as soon as that person gets signed up. Now, a lot of these companies have gone out of the business like the last mass torts made perfect. When you and I were talking, it was like, where’d everybody go? Everybody came in and now everybody’s gone. And so I think ultimately when we think about that feedback loop and understanding what’s happening, it also has to be tied to compensation in some way, shape or form that isn’t about buying a contract, but is about having the feedback loop and form the quality of the process all the way along so that they’re making more decisions as a firm about who they’re going to work with.
(17:06)
And from my perspective, I guess because I actually worked within a top litigation mass tort law firm, I was always on the hook for that. This isn’t new to me, it’s new to a lot of these folks who just came into the market. Most of them have never worked in advertising. A great majority of them have never actually participated in the generation of a lead in terms of looking at every step of the way they were simply middlemen. So when you’re at Mass Force made perfect, next time it’s like check out the company, see if they actually have any media buyers on staff. If they don’t have a media buyer on staff, that means they’re buying a lead. If they’re buying a lead, they don’t know how many hands that lead went through before it got to them, and they may be attempting to provide a valuable service, but at the same time, they don’t realize all the damage that can be done by not knowing the origination of the lead. What kind of creative was used to attract it? Maybe it was like a check in the ad. What damage does that do to the firm? Maybe in the process they were screened initially by somebody who told ’em all of the answers that they needed to know. All of those factors in terms of how a lead gets from point A to point B have a massive impact on what the firm is ultimately going to be working with and what the firm paid to generate in terms of the cost to acquire a great plaintiff.
Dan Miner (18:27):
You hit something that I just want to zero in on for one second, which is the ad copy and seeing a giant check. And when you think of the plaintiff on the other side, there’s also that plaintiff has to have trust in the law firm that they’re working, that plaintiff has gone through probably a challenge. They’ve unfortunately experienced trauma or an injury or damage, and they’re looking for representation. And so there’s that injured life at the other side. Times gets left behind or forgotten. When we think about signed retainers and compensable cases and what you just touched on there brings it back to the brand, it brings that injured life back to the brand of the law firm or the experience that law firm is going to provide that plaintiff. And that experience doesn’t just start when they sign the retainer, it also starts with the initial views that they may have of that law firm just based on the marketing copy. I think you hit on that nicely.
Devin Downey (19:18):
Thanks. I think it’s interesting because you’ve turned the conversation around a little bit because we’ve talked about how getting a plaintiff is a commodity in the past, and it’s like you’re talking about non-branded advertising. So the firm isn’t presented until the intake process, and then at that point there’s really no information provided about the firm because the intake person probably doesn’t even know where the firm is located. In most instances, the firms themselves. And if a firm doesn’t know this, it’s a great time to learn it. Most of the advertising agencies in this business actually have secret law firm relationships. They have a DC firm or they have an Arizona a BS. That’s not something they disclose. So as they’re going through the process, they have multiple different paths they can take somebody through depending on the type of criteria that’s involved in the lawsuit itself.
(20:06)
These things are a slippery slope. There’s a lot of temptation involved in terms of redirecting the best injuries, redirecting from one campaign to another for whatever reason, whether it’s making the firm that’s the squeaky wheel, making them satisfied at the detriment of another firm. All of these things play in. And that’s just telling you you can switch out a retainer anywhere in the process because again, it was a non-branded ad. And then the bigger challenge that we’re not talking about yet, but it’s that once that person does get to the firm, how long does it take the firm to talk with them? And what was the handoff like? Did the person just sign up and that was the end of it? Was there any kind of onboarding process? Was there any kind of handoff such as even setting a first meeting with the firm, a phone call.
(21:00)
And that’s where I think a lot of problems start to occur where there’s an attrition rate just based on the fact that this person signed up. They don’t know who they really signed up with, they haven’t been contacted. It’s been two months. And then the next thing you know they go and sign up with another firm. And so that’s the other reason that dual reps can occur. And it’s just purely that they didn’t have a great relationship from the beginning. Well now if they don’t have a great relationship from the beginning, what does it look like when it’s time to chase them for the settlement? That person doesn’t even know who the firm is in a lot of instances, they don’t remember. It’s been two years, it’s been three years, it’s been four years since they heard from the firm. All of these things play a role from the non-branded ad to the poor handoff, from intake to the firm to what happens in between in terms of messaging out to the person what’s going on with their case or just calling and saying, I’m calling you to share that there is no news at this time.
(21:59)
This is what we’re looking forward to. And I think that’s where at each of those points, there’s probably preventable attrition that occurs, even if it’s just as much as having recently moved or has anything changed with your contact information. We get that from all our online services. I don’t know if we get that from our law firm.
Dan Miner (22:18):
And it’s one of the many reasons we focus on that client experience and we have a solution that stays in touch with that client through the duration of settlement because it’s so important. Even if no update is the update, it’s still a valuable update back to that plaintiff
Devin Downey (22:33):
And it takes the burden off the firm. I mean, the firm doesn’t want to send out communication because they don’t want to get flooded with questions about when they’re going to get a settlement. And if you guys are able to provide that service and those responses can come back to you, then that’s going to save a lot of burden of work for the firm and doing that follow up and take a lot of pressure off them.
Dan Miner (22:55):
Just closing comments. We’re in mass tot May perfect week. I am sitting this one out. My wife and I welcomed a new addition to the family.
Devin Downey (23:04):
Yes. Congratulations.
Dan Miner (23:06):
I’m going to sit this one out, but to our listeners, what are your recommendations as they talk to prospective vendors and speak with potential marketing partners in this space?
Devin Downey (23:14):
Well, the first thing I would do is I try to find out is this a marketer or is this a sales organization? So what role do they actually provide in the process? Do they have media buyers or do they source all of their leads? Now, most every agency can’t actually provide enough volume in leads doing their own media buying. So I always kind of laugh when I listen to some of the agencies say, Hey, we buy all of our own media. In fact, one of the agencies I hear say that the most isn’t actually able to buy media because they don’t have credit with the media. And so when you are a law firm and you’re really thinking, how do I get a reasonable cost of acquisition in terms of a campaign, primarily I would focus on is this an organization that actually has a media buying capability?
(24:04)
If they’re sourcing leads, what are they doing in order to make sure that the data they’re receiving on an actual human being represents that human being? And it isn’t something that’s been sold over and over. Next, I would look at their track record. I’d do a Google search and just see what kind of lawsuits they’ve been involved in. I’d spend some time on LinkedIn. I’d look at the founders and I’d say, have these people ever worked in advertising there? Is this their first foray into it? And they came from some other kind of industry where they weren’t actually marketers? Those are the things that I would look at and I would pay attention to when it comes to who you’re going to work with in terms of your advertising, lead generation, marketing, whatever you want to call it. But ultimately, there’s very few entities that’ll be at mass towards made perfect that actually have media buying capability and have a marketing background.
(24:50)
And beyond that, it becomes what is their plan to get that feedback validation from the firm or from the firm’s outsource partner to know that where they’re getting their leads from is leading to actual cases that look to be compensable. And so as you ask all those questions, make sure that the answers are as substantial as the stake they’re willing to buy you. There’s a lot of folks in this industry that are great relationship people, fantastic relationship people, and they’ve had long track records of moving from one relationship to another. At the end of the day, ask yourself, is this somebody I’m going to be working with a year from now? Because you’re going to be working with the plaintiffs that they generate for many years. Does that make sense? It
Dan Miner (25:34):
Does. And so that concludes this week’s episode of the Leverage Report. Thank you all for attending, and thank you once again, Devin, for being our guest today. Okay, thanks, Dan.
