Sometimes, which leads to “managed law”:

Defense attorneys we consulted told us that some malpractice carriers push them hard to cut legal costs. Should that worry you? You bet. When defense lawyers are squeezed, it’s their clients who suffer, ending up with a second-rate defense and pressure to settle a possibly winnable case. Or, sometimes doctors end up in trial when they could – —and should – have settled.

The underlying problem is that defense attorneys really have two clients: the doctors they’re defending and the insurance companies that pay their bills. In many cases, the interests of the parties coincide. But not always. If the carrier wants to settle and the doctor doesn’t, the lawyer ends up caught in the middle. His obligation to defend the doctor may conflict with his loyalty to the insurer, particularly if he depends on it for a substantial part of his income.

“It’s a dirty little secret in the industry,” says one defense attorney, “and most doctors don’t know anything about it. When the doctor’s assigned lawyer tells him to bail out and settle, he should know if the guy’s really trying to protect him from a big jury verdict, or if he’s primarily motivated by economic pressure from the insurer.”