By Matthew Garretson and Sylvius Von Saucken
CINCINNATI, OH -
Other firms' lawsuits are resolved? Time to call in Garretson
by Dan Monk Senior Staff Reporter
Most people view the settlement of a lawsuit as the end of the case. But that's where Matt Garretson's work begins. The attorney has built a thriving practice out of handling myriad legal details that emerge after complicated legal cases are settled.
"It's amazing how much simpler he's made my life," said Blair Hahn, a South Carolina lawyer who helped negotiate more than $1 billion in settlements from Eli Lilly and Co. involving the drug Zyprexa.
Hahn said Garretson has developed a unique expertise in settling Medicare and Medicaid liens - legal actions in which government health agencies seek a portion of lawsuit settlements as reimbursement for past health care claims.
In many cases, state and federal governments pursue individual claims against patients who receive legal settlements. But the Garretson Firm has developed a systematic approach for settling hundreds of liens at a time. Garretson estimated he's settled more than 100,000 liens since he developed the approach in 2004.
"He's saving my clients money," Hahn said. "At the end of the day, everybody ends up better off than they would have if I was doing it myself."
Administration of lawsuit settlements is a growth industry in the United States, thanks to a rising supply of legal actions. A 2006 report on the cost of tort litigation by consulting firm Tillinghast-Towers Perrin showed legal settlements cost companies $861 million in 2005. Those costs have grown at an annual rate of 9.5 percent since the 1950s.
A handful of large firms process settlement claims in hundreds of lawsuits annually, while dozens of smaller firms occupy niches in the industry, said Lauren McGeever, director of market research for Complete Claim Solutions LLC, a New York-based subsidiary of Source Corp., an outsourcing firm in Dallas. She said the largest have hundreds of employees and process millions in payments annually.
"It's a very large industry," she said. "Class actions are huge right now."
By focusing on Medicare and Medicaid liens, the Garretson firm has achieved rapid growth. The 60-employee company was founded as a one-man show in 2003 and now operates offices in Charlotte, N.C.; Chattanooga, Tenn.; and Salt Lake City. It recently expanded its headquarters with a move to Montgomery's historic district, investing $2.5 million to renovate a building that houses 35 employees on Cooper Road. Garretson would not release sales figures but said his firm could double employment in five years.
"We're doing to the legal profession what has been done for years in manufacturing," he said. "We're creating an outsourcing option so law firms can focus on what they do best."
Garretson saw the need for a settlement administration firm soon after graduating from the Salmon P. Chase College of Law at Northern Kentucky University in 1998. He was working for a firm that sets up structured settlements, typically annuities established with the proceeds of a lawsuit settlement, to provide for victims over time.
He decided to break out on his own in 2003. That year, he was hired to administer claims in Cincinnati's racial-profiling case and a $25.7 million settlement of clergy-abuse claims in the Roman Catholic Archdiocese of Louisville.
But the big break came from Congress, which passed a Medicare reform bill in 2003 allowing the federal government to go after lawsuit settlements when it pays medical bills of patients injured by faulty drugs or consumer products. Initially, law firms handled the claims on an individual basis. But Garretson developed statistical models to settle claims en masse.
"To do this kind of modeling that we do, I departed from hiring lawyers to hiring project managers, data analysts, technology folks - former government workers, people who used to work in the health care system," he said.
Lien resolution accounts for half of the company's revenue. The firm also operates a call center where those involved in legal settlements can receive information about how they will affect personal finances. And Garretson continues to work as a "special master," or court-appointed settlement administrator.
Over time, he beefed up business expertise. He hired Jason Wolf, a form metals and mining executive for GS Industries in Charlotte, as managing director, working out of that city. Gerry Bollman, CFO of Formica Corp., was recruited as director of operations and CFO. And Sylvius von Saucken, an attorney with experience in tax law and estate planning, joined in 2005. The firm has six full-time attorneys.
"We don't have a litigator in the bunch," Garretson said. "All of our work is around this issue of settlement. States have taken notice... I've been hired to represent the attorneys general of four states to help them quantify their loss due to defective products."
Hahn has used the firm to handle large numbers of claims and set up complicated trust arrangements for a single client.
"Matt's office has been able to do the same thing that some special masters have done for me in the past," he said. "He does it more quickly and for less money."
Leave a Comment