Most law firms have a narrow notion of “proper” marketing and advocacy.
And by that I mean: zzzzzz.
Then there’s Edelson PC. The Chicago-based plaintiffs firm just released a six-and-a-half-minute video clip titled “We Don’t Talk About Claims Rates.”
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It’s a parody of the song “We’re Not Talking About Bruno” from Disney’s hit movie “Encanto,” and it sounds both improbable and fabulous to me.
For my part, I can only hope that children across the country will now sing about the disgracefully low percentage of members eligible for a class action lawsuit who are seeking settlement compensation.
“Very few claims are made by class/Notice is sent, but claims don’t come back in droves” sing the naughty attorneys of an unidentified plaintiffs firm (regardless of a few not-so-subtle clues). “Ignore your discomfort / Just give us our fee.”
I spoke Wednesday night with Edelson founder and CEO Jay Edelson about the video.
My number one question: Just…why?
A bit of background: music videos are kind of a business thing. For example, Edelson’s attorneys released the precedents mocking Big Law’s recruitment as well as a rap that focused on the tension between the firm’s legal work and Jay Edelson’s obsession with volleyball.
Still, the “We don’t talk about loss ratios” video was a big undertaking. Edelson declined to say how much money it cost, but told me more than 100 hours of work went into the project, with a cast that included a mix of professional stage actors from Chicago, the partners of Edelson Ari Scharg and Eli-Wade Scott, and partner Amy Hausman.
So again, why do it? Because (hello those of you who think law firm culture is the same) it’s not exactly a typical move.
Edelson told me he sees his company at the forefront of a “wave of reform” on the class action bar on the plaintiffs’ side.
He focused on anemic class action rates, which is the percentage of the class that submits claims and receives compensation in a class action settlement. He said those rates often hover around 1% to 2% of eligible group members.
In contrast, last year Edelson and his co-lawyer won praise of U.S. District Judge James Donato in San Francisco for developing “an innovative Notice and Claims procedure that has generated an impressive claim rate” in a lawsuit against Facebook. The class action lawsuit, which alleged violations of Illinois’ biometric privacy law, resulted in a $650 million settlement and had a 22% claims rate.
But the lawyers had to work to get there. Donato declined preliminary approval of the original settlement proposal. Instead, the judge wrote, he “challenged the parties to come up with notice forms that fit the reality of our online lives. US Mail’s old ways and a print ad weren’t going to cut it in 2020.”
In response, the plaintiffs’ team reached out to potential group members via direct email and Facebook’s News Feed. They published notices in major Illinois newspapers, created a website dedicated to the settlement, and launched an internet advertising campaign on platforms other than Facebook. They even consulted with a professor of psychology and behavioral economics at Duke University on how to maximize the likelihood of class members filing claims.
Since then, Edelson has written forums and spoke at conferences criticizing fellow plaintiff bar members for not doing more to increase claim rates – although to be fair, the Facebook class had the added benefit of rewarding every member of the class with at least $345. It is much more difficult to motivate people to react when the payment is less.
For example, I knew I could have gotten $6 as a member of a class against Duracell that claimed to be misleadingly marketing certain batteries, but I couldn’t bother to submit the form.
Loss ratios are not everything. I believe class actions have value beyond compensating class members by punishing defendants and deterring future wrongdoing.
Still, I commend Edelson for bringing attention to the issue and using video to spread the message.
“There’s something different about the medium,” he said. And indeed, it’s attracting a new level of attention (uh, like this column).
It is also a means of directing competitors who have done much less. As one senior associate cynically puts it in the video, “Our newspaper ads reached 71% of the class! We are clear.
A spokesperson for the trial attorneys’ advocacy group, the American Association for Justice, did not respond to my request for comment on the video.
The video also takes aim at the legal press for trumpeting the dollar value of the settlements without taking a closer look at the payouts.
The press “will be gaga over the settlement, the $250 million in value we’ve created,” boasts the partner.
“But our loss ratio,” replies a second partner, who is interrupted by a partner who says, “We are not talking about loss ratio”.
The video’s unseen hero is Ted Frank, founder of the Center for Class Action Fairness and serial objector to class action settlements that do not meaningfully benefit members.
As the bad guys’ lawyers sing about keeping their “stats buried deep under the sand” and doing “the bare minimum, you see, and succeeding,” the judge warns, “Óye Ted Frank is on his way.”
The lawyers reply: “Ugh that guy Ted Frank is the worst, he makes us look so bad.” With a growing sense of panic, they sing “I think I can hear it now”, then “Oh no, Ted Frank is here!” Ask for a recess!
I asked Frank what he thought of the video.
“I haven’t seen it,” he replied via email. “But it’s flattering to be associated with the issue that my lawyers and I have been fighting for over a decade.”
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