New York, New York
A wealth of opportunities for nonpracticing JDs in the insurance industry
On opportunities for non-practicing lawyers in the insurance industry
On where the opportunities are for litigators in the insurance business
Listen to interview:
EXJ: Jack, thanks for speaking with us today. You are a Managing Director at Marsh McLennan. Marsh is one of those iconic brands that everybody knows but probably doesn’t know the breadth of services that the company offers. Could you speak to that and what your role is at Marsh?
Jack Flug: Sure. Marsh McLennan is a worldwide organization, over 70,000 employees in the risk and advisory business. The businesses it has are traditional risk management and risk brokerage. There is a health and benefits operation through Mercer. There is a reinsurance intermediary arm through Guy Carpenter, and we also have consulting operations like NERA, National Economic Recovery Associates and Oliver Wyman.
My role is Managing Director in the Marsh component of the organization. And I am in a group that’s called FINPRO, which stands for Financial Professional. And basically, that is where the financial lines of insurance like directors and officers liability, professional liability and a lot of unique coverages like employment practices, cyber and fiduciary fidelity and a variety of others reside.
ex judicata: Let’s go back, Jack, what was your first job out of law school?
Jack Flug: I went to law school at night. I was working full time at a private bank prior to starting law school. I was working in an organization involved in the factoring of accounts receivable for large clothing manufacturers.
ex judicata: So, you weren’t practicing law in that first job?
Jack Flug: Not practicing law, except I did work within the collection’s operation. And therefore, when people were late or when people did not pay, there were other avenues one had to take in order to effectuate payment. That’s where legal could come in.
ex judicata: And how did getting the law degree actually impact your business and your future direction.
Jack Flug: That’s a really good question. I went to law school, as I said, at night, and in just about my last year I decided that I really ought to go work at a law firm to figure out what I intend to do for the rest of my life. And I left this private bank and went to a law firm in Manhattan. I got a position as a paralegal. In that third year I was doing more than that. I was working for a retired federal bankruptcy judge and for a securities litigator. I will be honest with you. I only was in the paralegal role for about four months. If you ask the question, why? The answer is I felt a little bit like a mushroom in a library, growing there in the dark, doing research, writing up things for the lawyers and the like. I recognized that was the job and I was not enjoying it. What I chose to do at that point was to look around and see what options I might have utilizing the skill set that I had developed through working and what I had gained by spending all that time in law school.
ex judicata: What becomes the next move after those first four months or so?
Jack Flug: So, comically, I would come in every morning with my bagel and my coffee and I would open up the New York Law Journal and just look around. I did this for weeks on end, but nothing piqued my curiosity. Until one morning when I opened the Law Journal I saw a blind ad. It said alternative careers for lawyers. That was exactly the extent of the ad.
ex judicata: Wow. Back then something targeting non-practicing lawyers was about as common as the Yeti. And today posts seeking non-practicing lawyers remain a real rarity. This is why we started ex judicata. To give attorneys leaving the practice actual options. Here are companies, not-for-profits and government entities specifically looking to hire JDs in non-practicing roles.
Jack Flug: I saw that ad only the one time and nothing else like it afterwards. To give you the comic component of this, the ad was asking for resumes of people who had already graduated law school. I was not graduating for five months. So, I decided to write a letter saying ‘Hey, I’m not a graduate, but I’m pretty damn close and this sounds cool. And it turned out to be AIG. They decided they wanted to interview me.
ex judicata: So, that then was the starting point for a whole long career in the insurance industry.
Jack Flug: Correct.
ex judicata: Was there an actual legal component to that first insurance job?
Jack Flug: It was a bit of a hybrid. It wasn’t your traditional job as people think about legal roles. Basically, they were looking to hire lawyers to join their financial services group. And to handle the claims that were coming in. Historically, prior to that, they did not have lawyers in this role. They had people who were generalists handling many types of claims that were becoming more complicated. They had interviewed about 50 some odd people and they hired 3 of us so I was very lucky. We were kind of guinea pigs testing out the theory that lawyers could handle all these claims out of the home office as opposed to the field offices which had been the norm.
ex judicata: So, you’re in your job with 2 other lawyers doing claims work. During that hybrid job was there a time when a switch kind of went off and you determined your career would be in business. You were not going to be a practicing attorney.
Jack Flug: Yes and for me it was even before I started the AIG job. When I chose to go to law school at night, I had already been working in business for 4 years. I got a flavor for the business world. I liked the opportunity to interact with clients. I liked the opportunity to try and repair things that needed repairing if you will. So, when I went off to that law firm for that four month period, to be very honest, I think my decision was made. I was giving the legal world a chance in the back of my mind. When I departed the firm one of the senior partners was concerned. I had only been there a short time and he told me the firm was going to make me an offer upon graduation. I was very appreciative, but I couldn’t see myself doing that as a career. I just couldn’t.
ex judicata: That was your moment. Turning down a definite opportunity with a law firm. I kind of did the same thing in my own career. I worked for a large law firm and left after only 3 months. When I quit the partner looked at me like I was out of my mind. Bad, enough to leave a prestigious firm etc. but I didn’t have another job. I just knew that I was not cut out to be that person in the law library that you described.
ex judicata: What is it about the insurance industry, in general, that is so attractive to JDs who no longer want to practice law?
Jack Flug: I can only speak for myself. I was young lawyer when I got into AIG. At the time there were a lot of big issues going on in the business world, and it was pretty interesting and quite cool when you had files on your desk about major situations that were evolving in the business community. When you went home at night and turned on the news you could see issues which you’d touched. For example, there was a major bank failure. I sat on the couch and recognized that I was working on that bank failure from the insurance perspective. It could have been, say, a massive piece of litigation that made the papers. And I might have that on my desk. So, it was interesting, challenging and very thought provoking. I don’t think I would have gotten that had I stayed in the legal profession for several years if at all.
ex judicata: Within the insurance industry can you talk about some of the segments that are appropriate for non-practicing lawyers? I’m thinking of areas like underwriting, claims, risk management, brokerage.
Jack Flug: Sure. The most natural area is claims. Because those are, or could be, disputes. And people with a legal background are somewhat better at trying to bring parties together than the average person. So that’s a natural one.
I think underwriting is definitely a place that has consulting components for different industries. So, there’s consulting in the health care space, in the environmental space, in the product liability space. In the aviation space, we see issues arising out of the Ukraine where aviation leasing companies are all going after the carriers because they have lost their planes. There’s risk management, as you indicated, and that’s working on an enterprise basis or a limited basis, if you will, for defined spaces like cyber or critical employment related areas.
I mean it just doesn’t end. I have now probably helped at least a dozen people with law degrees over the years maneuver their way in to the insurance business. And it’s not really a hard sell. The fact is the insurance industry for lawyers in many instances is a very well-kept secret. Attorneys don’t think about it. And if you don’t think about it, you don’t explore it. Once you explore it you realize there is a vast array of opportunities, almost endless. I know plenty of lawyers that started out in the insurance business that are now running organizations. Or they may be in effect, the lead salesperson, for their companies. A lot of people might say you went to law school to be a salesperson? And the answer is I’m not selling widgets, I’m selling a service. And I must really understand what that service is in great detail in order to be effective.
ex judicata: Yes, it’s always surprising to me that more young lawyers don’t think about the insurance industry. The same thing with the big four accounting firms going back to when they were the big eight. There are lots of roles for non-practicing lawyers. And, also the management consulting firms. But the critical thing I think is you still have to go out and look for these opportunities.
ex judicata: Lawyers, broadly speaking, fall under one of two categories, litigation and corporate transactional. If someone has a litigation background, what areas of insurance do you think are the best fit for them?
Jack Flug: So again, we can start out with claims because the litigators understand the inner workings, if you will, of the legal system. They can provide non-legal but consultative services that are of great value to the client base. And I look at the client bases as internal and external. The external is the client. The internal would be the brokers.
So, claims is a natural. But I wouldn’t stop there. If you’re one of these litigators that cannot do anything but litigate and it comes out in everything you do, then the scope of opportunity in the insurance business is going to be far more limited. But if you are a litigator that can see and understand the vast array of insurance services there is a lot of opportunity. I started out with claims at AIG. 6 years in, I was plucked out of claims and I was asked once again to be guinea pig and move over to the underwriting side.
I had never underwritten in my life. The senior executive said it could be a good fit for my background because in claims I’d seen things that underwriters typically do not see. Several months into the job I realized he was right. My background made me a natural for a move into underwriting. And one could then easily move into brokerage. A lot of carriers and brokers watched this experiment at AIG and copied us. They all started to hire lawyers for non-legal positions. So, if you look at the industry now you see countless non-practicing attorneys
ex judicata: And if your background is corporate transactional, what areas in insurance do you think make the most sense?
Jack Flug: I’ll give you one example. Over the last ten years, a field of insurance opened up called transactional liability. It deals with all M&A. If you look at the large brokers, and some of the mid-tier brokers as well as the large underwriters and mid-tier underwriters and some MGAs which we call the managing general agents, I’ll have to say there are probably a couple of hundred non-practicing lawyers.
ex judicata: And that’s in just this one area, transactional liability?
Jack Flug: Yes, it’s been massive.
ex judicata: And in terms of how much seasoning one should have, is there an optimal time to enter the insurance industry? If you are let’s say a couple of years in practice within a law firm or corporate law department, is it an easy transition at that junior point? Do you need more time?
Jack Flug: It depends of course on the needs of any organization. But anybody that comes in from the outside is going to require some tutelage and some training because they’re coming from a legal environment into a business environment. And, then a lot depends on the person. I’ve seen that our operations have hired everything from 2nd or 3rd year associates to those that are 15 to 20 years in the practice of law..
ex judicata: And how does your company find these attorneys now? Is it through search firms or job ads?
Jack Flug: Again, I’ll speak from my standpoint. When we’re looking for people, we find most by word of mouth.
ex judicata: Somebody in the company who knows somebody etc?
Jack Flug: Exactly.
ex judicata: What level of seniority are these folks, Jack, or is it all over the board?
Jack Flug: It is all over the board, but the last few were attorneys with about ten years of experience.
ex judicata: How do you think your law school training helped you in business? The skill sets you developed.
Jack Flug: I do think that law school teaches you one very important thing, and that’s how to think, how to look at things. You don’t walk out of law school saying, I’m ready to litigate in the Supreme Court. You do walk out of law school, if you have soaked it in, having learned how to look at things from different angles, how to review them, how to analyze them and how to respond when someone asks a question.
ex judicata: That makes a lot of sense. How about writing skills?
Jack Flug: Immensely. You learn how to develop your own style and get to the point a lot faster.
ex judicata: One of the things that we’re doing at ex judicata is creating courses to help lawyers move to business jobs. Our first course is a sort of a financial fluency for attorneys. How to read a P&L, what’s a balance sheet. That kind of thing. Do you think we might be able to come up with an insurance industry program. A kind of primer on insurance principles and the industry. A few hours that could benefit someone who’s thinking about a business job in insurance?
Jack Flug: I think it would be of great value. The insurance industry, like so many, is fighting for talent. I do think that if there was an avenue for the industry to look at, if you will, a pod of potential candidates that understand the business that are not in it now, it would be great. This whole pool of JDs who no longer want to practice law.
I am a firm believer in taking people with different skill sets because they bring a different flavor to the recipe. So, lawyers in firms, corporations or government can help to challenge the status quo in the industry. We’ve brought these people with different skill sets into Marsh and given them some room to run. And, I’d say in 80% of those instances, we’ve gone out with something pretty interesting and pretty cool that has warranted a lot of a lot of visibility and a lot of airtime.
ex judicata: That’s marvelous. And I think that’s actually a perfect place to leave it, Jack. Thank you for taking the time with us. I think it’s going to be of help to a lot of young lawyers who may be searching for a new direction. Especially now when there’s so much uncertainly in the profession.