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The Effective Lawyer teaches ambitious trial lawyers how to grow their skills and create a prosperous law firm. Using lessons learned by accomplished attorneys from around the country, we discuss lessons learned through their trials and tribulations. Our discussions cover a vast range of topics sought out by attorneys looking for advice, from depositions to how to market your law firm.
The show is hosted by Jack Zinda, Founder and Senior Trial Lawyer at Zinda Law Group. In less than 15 years, Jack and his team have grown Zinda Law Group from 3 attorneys to over 30, spanning several states and handling a variety of personal injury cases from gas explosions to truck accidents.
Jack and his guests share their knowledge and skills that they’ve acquired through the process of building one of the most successful plaintiff’s law firms in the country.
In each show we cover a new topic that an ambitious attorney would want to better understand, while providing practical skills to improve their legal practice.
For more information, visit https://www.zdfirm.com/the-effective-lawyer
00:00
Speaker 1
Welcome to the Effective Lawyer, a podcast for ambitious attorneys who want to improve their practice. My name is Jack Zinda and I'll be your host. Hey, everybody, and welcome to another episode of the Effective Lawyer podcast. Today we're going to talk about how to triple your economic damages. And the focus is going to be loss of earning capacity or the always misstated lost wages. That's a term I hear misstated all the time, that we're getting lost wages and not actually loss of earning capacity. And those are very different things. So why do I want to talk about that? Well, you know, as personal injury lawyers, we're always looking at medical bills in the past, in the future, how can we prove those up? But I see very little seminar cles or discussions about loss of earning capacity.
01:01
Speaker 1
And in my experience, many lawyers are leaving tens, if not hundreds of thousands of dollars on the table by not exploring that with their clients. Okay, so let's zoom out real quick and see what we're talking about here. So loss of earning capacity is how much your client was not able to earn because they were not able to work due to the incident that occurred. You know, the car wreck, the truck wreck, the slip and fall. And that includes both in the past and in the future. Now, whenever a. Let's just use a car wreck for an example how that occurs, there's a process that you can set up to make sure you catch it every time and that you can actually train your paralegals or your legal assistants or your associates to make sure you don't miss it.
01:52
Speaker 1
So what I want to go through today is one, why this matters, what the impact it can have, two, how to go about doing it, and three, give you some free resources that you can use to train your team on how to do that. Okay, so the first thing you want to do is you want to make sure that you accurately and adequately interview your client about their loss of earning capacity. To do that, you have to know what their employment history was, where have they worked in the past, and what did they hope to do in the future.
02:22
Speaker 1
One area that I see attorneys miss a lot of times is if the person was in school did this delay their ability to get a job, if they were working, and let's say they received pto, they actually got paid, or workers comp benefits, they're still entitled in most states to recover loss of earning capacity because they themselves were not able to work and it was a third party beneficiary that paid them. So step one is get your client's story. Okay, you want to start at the beginning. What was their education level? Okay, where did they go to school? Did they get a degree? Did they get any sort of licensure? Then what jobs did they have? And you want to figure out how much did they earn? What were their hourly rates as well as did they have a salary?
03:12
Speaker 1
And here's a big one. Don't forget about overtime. And I'm going to come back to small businesses as well because there's ways to attack that loss of earnings also. And I've got a couple examples of that. Overtime's critical. That is time and a half. A lot of people work 50, 55, even 60 hours a week. So if you take how much time they missed and then you only do it by their hourly rate, you're leaving a lot of money on the table for your clients. And we've taken cases that we thought were worth a hundred thousand dollars and gotten them up to half a million by following these types of playbooks. So step one, interview your client. You can delegate that out to your legal assistant or to an associate or to a paralegal if you put together a clear script.
03:57
Speaker 1
And I would advise you to record it using either a loom video or some sort of recording device. And now with AI, I would actually have the audio of it recorded with something like Firefly. So then you have a transcript and a summary of what was went through. But you need to make sure that you do it a couple times and you train your staff to be patient. Don't rush through this. The other thing that you want to do is make sure you find out what were your clients hopes and dreams if you had a catastrophic injury case and they wanted to be an engineer someday, talk about that with them. Figure out was it realistic.
04:33
Speaker 1
Okay, you may need to get a vocational expert or an economist to explain what they would have been able to earn if they had followed that path in those steps. Now obviously if you have a 45 year old who you know doesn't even have a GED and they say I want to be a medical doctor someday, that's going to be a tough sell. But if you had someone that was in college and they had to delay their start date by two years, you just added two years of loss of earning capacity. Let's say they're going an engineer, that's now a couple hundred thousand dollars potentially right off the bat.
05:06
Speaker 2
Okay?
05:07
Speaker 1
So step one, get the story and be exhaustive and don't shut down things that are potential or possibilities for the person, especially if you have a sympathetic person. Because now you put the defense in a position of attacking someone's hopes and dreams. Not only did they hurt them or cause them to be disabled, but now they're saying their hopes and dreams weren't even possible. Okay, so once you get the story, that's part one. Now you need to figure out how what happened led to them missing work. The first way you want to do that is what are the limitations that were caused by the injury. You can look at medical records for this. And by the way, we have checklists for all these things.
05:50
Speaker 1
I know you're shocked by that my firm has a checklist or an sop, but this is how you do great work day in, day out, and how you can scale so you don't have to do everything and you can sleep well at night knowing it's done. So were talking about figuring out if the injury caused them missing work. So look at the medical records. Look for limitations. That's going to be written somewhere in a record. They were unable to lift a box over 50 pounds. I had a case one time where this amazing human being, he was involved in a terrible gas explosion, and there was some strange indemnity issues where his employer was actually on the hook for the third party's negligence who had.
06:30
Speaker 1
Who caused the explosion, was in an industrial plant, and they intentionally gave him this fake job that they were going to fire him as soon as the case was over. They made him a duster, which didn't even exist. And we use that to show that he actually had a huge loss of earning capacity in the future. And this was really a fake job. And it really made the defense look even worse for what they were doing because it was apparent to everyone. We started questioning them about why he had this position, what they were actually doing. And it was clear by everyone's understanding they were going to fire him as soon as the case was done with. So look at the limitations and then get a description of what your client does. Do not forget about white collar workers.
07:10
Speaker 2
Okay.
07:11
Speaker 1
We had a case recently. There was a trip and fall at a store where our client fractured their wrist severely in several places and had a difficult time typing. And this is someone that earned several hundred thousand dollars a year. Now I just want to take a minute as a lawyer. Pause. You can't type anymore. What does that do to your earning capacity? Most law firms aren't exploring these topics enough and are leaving substantial amounts of money on the table. That case, we ended up getting close to $5 million, which was almost all the money available. And a big damage model was how this wrist injury affected their future loss of earnings. Okay, so I've identified what their biography is and what their hopes and dreams could be. And then I figured out, okay, is it realistic?
07:59
Speaker 1
And I'm tracking all of this in a document. Then I'm tying it back to the medical records that tell me is the person, does it tie to the person's harm and what they're not able to do. The next thing that I need to figure out is what is the duration of this harm and then what is the worth of the not being able to work or if they're going to work less. Okay, so to do that I may need to consult with an economist that can explain this, is how much this person would have earned if they had have done this position or how much they missed out on due to that. You also may need to consult a vocational rehab expert that can talk about how the limitations affected what they were able to do.
08:49
Speaker 1
If you'd like a copy of any of the things you heard about here today, or to set up of time to talk one about one of our team members about a case, please go to Zendalaw IO and we have amazing resources, downloads, guides, and you can set up a time to talk to us if you want to talk about how we handle things or any case in particular. Now. Okay, so we've established a few things. Now I want to get into the nitty gritty of, like, how you can put this into a checklist and those sorts of things. So we have a document we put together, we call it the Loss of Earning Capacity worksheet. And the first thing we put on is, okay, what's the person's position, what is their employer and how long have they been employed?
09:34
Speaker 1
If they're a student, it's going to be a little different, but don't write it off. I find frankly, that a lot of law firms are lazy about this and because it's not in a recorded bill, they don't want to do the extra work. And that's leaving a lot of money out there and doing your client disservice. Next, keep in mind, with all of these things, you've got to validate it outside of just your client's testimony because you want to make sure it's actually accurate. You know, people have bad memories, they forget things like that. The next thing I'm going to look at, what are their prior year's compensation, how much money did they make? I want to go back at least three years, but maybe 10, maybe longer. Then I put down. Okay, what is their rate of pay? How are they paid?
10:14
Speaker 1
Is it by the hour? Is it a salary? Do they get any bonuses? Just because they didn't get a bonus last year doesn't mean they're not going to get a bonus next year. How much overtime do they earn? Are there any other benefits they get?
10:29
Speaker 2
Okay.
10:30
Speaker 1
And I put all this in our spreadsheet that calculates these things out. We put it into our software program, but I can provide a spreadsheet for anyone that wants it. Now, I've got this information. Now let's talk about the evidence that I need to establish that.
10:43
Speaker 2
Okay.
10:44
Speaker 1
First I got to figure out what's the prior income. How do I figure that one? Getting the employee files I always look at. My job is to provide evidence in that the client's evidence is the least credible and is going to be taken least seriously by the insurance company. Next, tax returns. This is a big one. If your client has not filed tax returns, odds are you're not going to be able to correct loss of earning capacity in the past. That is a huge credibility gap in my personal opinion. People differ on this. I don't want to deal with the fact explaining my client didn't pay their taxes. I think that immediately puts you on the defensive and put you in a bad spot. You want to get their W2, okay. Pay stubs.
11:29
Speaker 1
Get their list of all prior jobs and how much they earned and find someone from that employer that can testify that information is accurate. Talk to their cpa. Get their lifetime Social Security earnings. There's a website that your client has access to that actually show you their entire lifetime Social Security earnings that you can use for that. All right, so now we've figured out what is the prior income. Next up, missed work. How do we figure out how much time they missed from work? Easiest list of dates and times from the client. That's easy. Don't forget I mentioned earlier that just because they got paid through PTO doesn't mean they're not eligible to collect. That in your case. In most states. Next, a lost wages verification form. This might be for your more moderate injury cases, maybe ones that are 100,000 or less.
12:19
Speaker 1
Get a form, have someone that's not your client verify that they missed work.
12:25
Speaker 2
Okay.
12:25
Speaker 1
It doesn't have to be their boss and it doesn't have to be HR who you could call to testify. Yeah, they didn't show up to work that day. In most Jurisdictions, you can prove up loss of earning capacity in the past through your client's testimony and through witnesses. You don't need an expert witness. You could also get a statement from their employer. You could do a quick phone call. If you do it, I would recommend you do it yourself. And you really soften the beachhead. By that I mean put them at ease. If they get a letter from a lawyer saying, hey, I would like to get a statement from you, please, they're going to freak out. So you ask your client, hey, Paul, it's really important that we figure out how much this has harmed you in your case.
13:06
Speaker 1
Paul being the client, if you could you please give your employer a heads up and say, I just need five minutes of their time. I don't want to bother them. I just want to talk to them a little bit about any time that you miss from work. I'm willing to talk to him at night, on weekends, and I promise him it'll be just five minutes long. He talks to his boss. You talk to the boss, say, hey, you know, I represent Paul. And as you know, he's gone through a really terrible time and unfortunately the insurance company just is refusing to do what's right and pay him for the time they missed work. In fact, they're kind of saying he didn't even miss work at all. And maybe he's making this whole thing up.
13:46
Speaker 1
So all I'd like from you is if you could just give me a short statement. I could either do an audio statement or a video statement in writing saying what type of employee Paul was and how much time he missed from work. I don't want to take much of your time at all, but that would be super helpful for me if you'd be willing to do it. And then his boss will agree to, or she will agree to. And you've got a great now, you've got a great non economic damages witness as well. Now if the employer says, I know he showed up to work drunk all the time and was a terror employee, you want to know that because that's going to come out of trial. Maybe you don't want to claim it now.
14:17
Speaker 2
Okay?
14:18
Speaker 1
But if you delegate that to a paralegal or you send a letter, you're not going to get a callback. I just, I just promise you that people get very scared about talking to lawyers. Okay, next up, we talked about establishing missing work. We talked about prior income. Now let's talk about causation. I mentioned this before. Get a note from a doctor can say they did not able to handle the limitations of their responsibilities. And by the way, you could look on ZipRecruiter. Indeed, if the company the person works for posts that type of job, it may have a list of the actual description of what that position does. Get a narrative from a doctor. You can also review the medical records directly and see it says limitations don't lift more than £20.
15:02
Speaker 1
Now you want to do this all in checklist format because I guarantee you're going to forget some of this if you don't. Now we've talked about establishing things from the past. Let's talk about the future. A lot of times someone may have their work life cut short. Let's say someone is 52 years old, they're working in a heavy duty blue collar job, they have an injury to their back that requires surger and now someone says, you know, instead of 72, they're probably going to only be able to work to 68. They earn $50,000 a year, that's $200,000. Plus with inflation, you're going to need a vocational rehab person and an economist to explain that. Now with all of this stuff, I would use the idea pigs get hat fat, you know, hogs get slaughtered. To me, trial is all about credibility.
15:48
Speaker 1
So if you try to run up the score in a way that's unrealistic and say someone who, you know, worked as a custodian their whole life was going to be an engineer in 10 years or you know, someone has a broken ankle and they can't be an accountant, you know, for the last three years of life, that's not, that's going to come across as, you know, disingenuous. And I believe our job is to tell the truth as lawyers and to tell the truth in a way that maximizes our clients recovery, not make stuff up. So to recap, okay, use a checklist. Make sure you look at this just as important as medical bills, future medical bills. Look at loss of earning capacity from the past.
16:26
Speaker 1
Make sure you establish the client's employment history, figure out their prior income, figure out why and how much they missed work, and look at causation and then make sure you have a format to calculate that. If you'd like a copy of any of our documentation, please feel free to reach out. We're happy to provide that. And until next time, thanks.
16:49
Speaker 3
Thanks for listening today's episode of the Effective Lawyer. You can learn more about our team and find other episodes of our podcast at zindalaw.com as always we'd appreciate that you subscribe, rate and review the pod. Thanks.