ATLA considers Structured Settlement "affinity" program.

In an interesting move, ATLA, the American Trial Lawyers Association, has circulated a letter to several structured settlement brokers and firms to gauge interest and obtain initial information regarding an affinity program they are considering launching.

It could have a profound impact on the structured settlement industry as it would mark the first time a major trial lawyers organization would allow co-branding of their association name, implied endorsement and marketing options, in return for royalty payments. The stated purpose of the program is to continue the fund raising efforts of ATLA to fight tort reform and protect the civil justice system.

The proposed program would be called ATLA Extras, and according to the information we have, would be limited to companies that work exclusively with plaintiff lawyers in marketing structured settlements. This obviously shrinks the universe of qualified firms dramatically, and coupled with another criteria of having "significant experience with a national clientele" further narrows the firms which could serve this market.

Obviously, as a career plaintiff guy, founder of The Legal Broadcast Network, and supporter of ATLA and it's membership, i'm all for raising money for the organization and it's efforts. That goes with out saying. However, I think this could be a step in the wrong direction if the program ultimately chooses just one provider, as opposed to having several ATLA endorsed firms that fit their criteria. In what is a personal service business, an implied endorsement from the association could turn into an embarrassment for the association if the firm selected is chosen strictly as a result of the highest promised royalty payment, as opposed to demonstrated excellence in handling cases.

Any thoughts, news, comments on this one? 

Comments

[John Darer]

Ultimately each lawyer will choose who will be on his/her team. In every industry there are business people who will select a vendor based on the "perks" they receive or perceive they will receive from the vendor. And there are always people in every industry who are willing to serve it up gratuitously.

In my opinion this is a flawed business strategy for the lawyer. It would never meet a due diligience test and could expose the lawyer to liability if the adviser selected failed to perform to a level of competency. I will reserve comment on my own personal experience dealing with people in this regard, but I'm sure others have had similar experiences with less than competent adversaries.

I agree with you Mark, an actual or implied endorsement from the association could turn into an embarrassment for the association if the firm selected is chosen strictly as a result of the highest promised royalty payment, as opposed to demonstrated excellence in handling cases.

And if you are a structured settlement broker and you have to pay to play, directly, or indirectly, whetehr you or on defense or plaintiff, shame on you!

[Jack]

Well said John. And shame on the attorneys for asking, but does this come as a surprise to anyone? Go to atlanet.org and look at last year's annual meeting. Bair contributed over half a million to the Founders Club, co-sponsored sessions, and tossed in money as a convention sponsor as well. We're talking about a contribution from one broker approaching a million dollars! No wonder they think we're a cash cow. I'd like to know where he gets that kind of money to through around, but now ATLA thinks every broker has that kind of cash.

But here's the real question: how many brokers are going to pay? And if they do, how are they any different from the brokers they've complained about, the ones who take part in rebate programs on the defense side?

[The Settlement Channel]

Thats my point exactly, and has been my opinion long before this ATLA initiative was proposed. We, the settlement industry, are being seen as major sources of cash, contributions and support by the trial bar, which up until a few years ago treated most settlement brokers as their adversary. Spending that level of money to buy access to ATLA, TLPJ, or other state or national trial lawyer groups is in my opinion a recipe for disaster. Once you start, once the bench mark is established, there is no going backwards, and in a business that is based on a fixed commission product, thats suicide.

However, on a larger point, what does it say about an industry that has two class actions going, Macomber v. Travelers and the new Hartford case, to turn right around and essentially do the same thing in a different way with the trial lawyers. The rebate, royalty, commission sharing model is flawed to it's core, and if all we can add as value to a transaction is to kick back some money, then our industry will be treated as a commodity, with little regard, and is destined to be replaced by other products and services at some future date.