Friday, January 24, 2014

The Alternative to Copy Services

There are a lot of document copy service vendors exhibiting at the California Applicant Attorney's Association winter convention in Rancho Mirage so I talked with a number of them.

The rumor I'm hearing about the stalled copy fee schedule negotiations is that there a couple of hold outs using the Berkley Research Group's recommendations, adopted by the Commission on Health and Safety and Workers’ Compensation, as a bludgeon to force the sub-industry to accept a fee schedule that the copy businesses say is not reasonable nor sustainable.

The copy sub-industry says that BRG's research is inflicted with incorrect metrics and is flawed because the group failed to take into consideration the full scope of the services they provide and was based on a model that is inapplicable to the workers' compensation dispute resolution system.

The fee schedule was initiated as a part of SB 863. Originally drafted to reel in perceived excess by applicant copy services, the proposed schedule would also wrap in defense copy services, and that has former proponents of a copy fee schedule joining the chorus of the applicant folks.

In a story earlier on the issue, D. Diann Cohen, director of training and marketing for defense copy service Macro-Pro, said while she is a proponent for reform, she is completely opposed to the recommendation in the report.

“Fair is fair and right is right, and unfortunately, this is neither,” she said.

On the other hand, Debra Russell, director of the workers’ compensation program for Schools Insurance Authority, criticized the proposed reimbursement rates for being "too generous."

Russell also said she thinks in some cases the methodology used by Berkeley Research Group double-counted subpoena costs and witness fees, which should have been included in the invoices it reviewed. Therefore, the recommendation that the Division of Workers’ Compensation could allow additional payments in addition to the lump sum to cover these costs “is suggesting duplicate compensation for those two parts of an invoice.”

Here's the way I see it - the folks that are in the way of getting a schedule now by holding out for lower fees are missing the big picture and will end up costing the work comp industry a whole lot more than acceding to some of the copy service demands and here's why.

Copy services, both applicant and defendant, have done a tremendous job at systematizing the job of obtaining, copying and distributing records. The job they do is specifically authorized by the Code of Civil Procedure starting with section 2020.410.

That set of code sections permits "the officer" to serve subpoenas, wait for the production of records, then when produced copy them, all without much human interaction, in a reasonably efficient manner.

But these sections provide that procedure as an accommodation.

The PROPER way to get records is a whole lot more complex and costly - and that is the deposition of the custodian of records in addition to the demand for production and inspection of documents by an attorney at law.

I certainly could envision a very nice cottage industry springing up by some enterprising young attorneys who specialize in obtaining records via deposition, charging $400 or more per hour, conducting days long depositions in order to secure and inspect "documents."

And since the depositions would be conducted by an attorney not governed by any fee schedule, time limit or other constriction, it seems to me that such fees would be a medical-legal expense under LC 4620.

Could you imagine the uproar when THAT trend starts? A job that a copy service would have charged $300 to do would cost at least $3,000 if an attorney was performing a deposition of the custodian of records - and it would be a reasonable fee too because the attorney needs to ensure that all of the records are in place and that there was nothing omitted in response to the demand for production.

This is a very easy scenario to envision.

And this could be a new business model for copy services - much in the way that insurance companies have captive law firms to defend claims, copy services could have captive law firms to conduct discovery requests.

The profit margin suddenly climbs to salacious levels.

And the penny pinchers lose an even bigger battle.

Obstinance begets unreasonableness and it plays both ways.

So my message to the hold outs - look at the bigger picture.

But be sure to tell me when the BRG schedule is adopted so I can open up my specialty law practice quickly - I might even discount my hourly fee by 25% if I get paid timely...

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