Since 2001, cj Advertising has had the privilege of working with Norris Injury Lawyers—a top brand in the Birmingham market and one of the most respected firms in the cj family. We recently spoke with Robert Norris about a $10.5 million judgment that took 14 years for the firm to pay off. The following is a cautionary tale many people don’t know, but one every lawyer needs to hear. We appreciate Robert’s willingness to share it.
Tell us a little about the lawsuit. In 1990 (shortly after starting TV advertising), we signed a simple soft tissue automobile accident case. The case progressed without incident through our pre-litigation system before being stonewalled by their insurance company. It became necessary to file suit. We drafted the suit, noted it in Needles, and changed the file carrier from a green band (pre-litigation) to a red band (litigation). It was obvious in Needles, on our printed case list, and on the physical file that this case was in litigation. It wasn’t until a couple of months after the statute of limitations had passed that we discovered that though the lawsuit was drafted, signed, and the check for the filing fee prepared, inexplicably it was never filed.
As bar regulations require, we called the clients in to advise them of the circumstances and let them know we could not propose any settlement until they talked to an attorney. Shortly thereafter we received communication from their independent counsel that he was evaluating their claim for our professional negligence. The most charitable thing that could be said about our insurance coverage at the time is that we were “between coverages.” We were uninsured.
What were the legal and financial ramifications for the firm?
Though the highest offer we had received prior to “filing suit” was $17,000, our clients and their lawyer would not retreat from their $500,000 settlement demand. Unwilling and unable to pay that demand, we proceeded to trial. On the same day that O.J. Simpson was acquitted, a jury brought back a $10.5 million dollar verdict against our firm.
Because we were uninsured, we could barely pay the defense costs. Obviously the $15 million dollar-plus appeal bond was also out of the question. We had two choices—file bankruptcy or figure out a way to pay the judgment. We chose not to file bankruptcy, and in April of 2010 we were pleased to make our final payment and have the judgment satisfied of record.
Did this lawsuit inspire any procedural changes within your firm?
We had a great statute of limitation system in place at the time, and it isn’t much different than that now. At the present time, our “statute of limitations person” is as thorough and detail-oriented as anyone could hope for. David also looks at every single case and every single statute. Always. We haven’t been without insurance since then, and we’ve worked our way back into acceptable rates for coverage.
What advice would you pass on to other law firms that might help them avoid a similar lawsuit?
The best advice I have is to hire good people you can trust and stay insured. We believe that we were sabotaged. No matter how good your system is, your people are more important.
Also, there are at least two types of people: broad-brush and detailed. Make sure you put your broad-brush people into marketing, public relations, innovation, and growth. Make sure you put your detailed people into accounting, case management, and statutes. Then, let these people talk enough to where the broad-brush people get the benefit of the detailed people and the detailed people get the
benefit of the larger vision.
What are some key things you’ve learned from this experience?
No one can take away the things that are most important in life. You find out how people really feel about you. You learn that ultimately you are responsible for your own circumstances and decisions. It also helps you to recognize that most financial problems are simply a question of zeros. It makes you more sensitive to other people’s needs and worries. It makes you more introspective.