Case Study - ACE GROUPCase Study - ACE GROUPManaging Global Litigation and Expert Spend

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ACE Group Overview:

ACE’s Critical Business Issues and LSG’s Solutions:

The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients.

ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index.

In 2005, LSG and ACE met to see if LSG could help them manage their global litigation and expert spend program. By 2008, ACE wanted to expand the program throughout North America, prompting LSG to provide a new system to better accommodate North America’s workflow and meet the following critical business issues.

The Advocator System® enables the claims executive to request either a ‘Life of Case’ or ‘Phased’ Budget depending on the complexity of the case and then as the invoices are submitted, email reminders are sent to improve collaboration, trigger a strategy review and re-setting of the budget.

This proactive approach to case & cost management helps both parties to manage their case load and strategy at the matter level whilst also providing ACE’s senior executives with a high level view of their reserves across all business units.

3. Billing guideline compliance & validation

ACE claims executives are responsible for managing the costs of a claim. A paper-based invoicing process was proving inadequate because there was no easy way to check that the invoices were compliant against ACE’s service level agreement (SLA) and billing guidelines. The only way involved manual review which was costly and prone to ‘human’ error.

ACE asked LSG to provide a solution that would take this ‘invoice compliance’ burden off the claim executive’s desk.

The Advocator System® e-billing solution automatically validates key parts of the invoice namely: -

• Fee earner rates • Expense/disbursement costs such as travel and photocopying • Maths (rate x unit cost for each line entry and total cost) • Removal of duplicated line entries • Compliance with budgets (if any)

LSG also provides a ‘manual’ review of the invoice, supported by additional technol-ogy, which validates the remaining 40 billing guidelines.

After this review and if potential reductions are made, the external counsel may challenge them with clarification(s) and if valid these are accepted by LSG, and the invoice is ‘passed’ to the claim executive for their ‘qualitative’ review and approval.

Ultimately, the burden of invoice review is taken off the ACE executive’s desk saving them time and enabling them to focus on higher value work.

4. Easy invoice review and approval process

Rather than review paper invoices, ACE wanted a system which would streamline their internal processes. With the Advocator System®, they can review, reduce and/or reject an invoice on a single screen.

1. Cost Visibility across the Globe

ACE wanted cost visibility and better control of their external expert spend across the globe. With operations in 53 countries, it needed a solution to manage their legal suppliers, their rates and associated expenses.

To address this issue, external counsel and other experts across the globe are invited to join Advocator System® which enables designated ACE Client Executives to approve their rates and fixed expenses (e.g. travel rates and photocopying charges) prior to invoice submission so providing cost visibility and control.

Increased rates and new fee earner details can be submitted by the external counsel at any time. However, only rates up to and including the approved rate for each fee earner are ‘accepted’ by Advocator System® when invoices are submitted.

These controls contained within Advocator System® ensure that ACE keeps control of their experts: only pre-approved experts can be assigned

cases/matters, rates are controlled by designated Client Executives and invoices are validated against the pre-approved rates.

2. Budget Tracking

Paper-based budgets on fees, expenses and indemnity have been provided by counsel and claims professionals for many years but tracking these costs against the reserve can be difficult without supporting technology.

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Specific line items can be reduced or a ‘high-level overall’ reduction can be made.

The ACE executive may also provide a ‘comment’ which is incorporated into an automatic email to the counsel informing them that their invoice has been approved. These email notifications can also be sent to the relevant billing clerk or accounts assistant at the firm to assist them manage their receipts.

The approver can also forward the invoice to their manager if it is outside their authority.

Once approved, ACE’s accounts payable team are also notified via a secure file so they can arrange payment.

5. Financial and MI reporting on budgets and spend by matter/business unit /client/law firm/lead lawyer/claim handler

ACE recognised the value of managing their external counsel and legal spend on a single platform.

With this, ACE is able to obtain ’real-time’ reports on a variety of key financial and performance metrics on their internal and external counsel across matters, business units and geographies.

The Advocator System® provides reports within the system and LSG also provide a separate Advocator System® Desktop (‘ASD’) which can ‘slice and dice’ and present the data in graphs, tables, pdf and Excel spread-sheets.

ASD® is a powerful reporting tool that generates both ‘high level’ and granular reports. These include, for example, matter/case specific budget vs. actual, fees & expenses, Guideline Non-Compliance, business unit reports, internal executive reports, Top 10, 25, 100 matters by spend and similar external counsel reports.

Another feature of ASD® is the ability to produce and send selected reports to selected employees at regular pre-set intervals prompting better management and proactive action.

Scorecards are also particularly useful to record and report on the performance of ACE’s panel and other external expert suppliers/vendors.

This reporting remains a key driver for the Advocator System® for ACE program.

LSG configured Advocator System® to meet ACE’s requirements outlined above.

As for all systems, it was tested by LSG’s expert quality testing team and then by a dedicated team of users before it went ‘live’ in 2008. LSG also provided face-to-face training for ACE’s claims team and webinar training for the law firms.

These sessions are supported by Advocator System® on-demand training videos, live-chat, ‘ticket’ and/or phone support; further training is provided as and when required.

Since 2008, ACE’s claims department has used Advocator System® to assign matters, request and track budgets, as well as review and approve electronic validated invoices.

Important Financial and Management Information reports are provided within the Advocator System® and ASD® supplemented by monthly reports produced by LSG.

The multi-currency Advocator System® for ACE is currently used by approximately 388 claim handlers, 2062 law firms and over 28,000 lawyers geographically located in over 70 countries.

In the first year, Advocator System® for ACE generated guideline non-compliances (GNCs – i.e. compliance ‘savings’) averaging 6.1% of the Total Submitted. Please see GNC graph below.

Result:

LSG’s Testing, Training and On-boarding

Charlie C MorganClient Relations Manager | LSG

Email: ccm@lsg.com, t. +44 (0) 20 7488 3500, t. +1 (212) 269 4520 ext 190, m.+44 (0) 789 439 3800

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