Joshua Schwadron Has Taken on the Mighty Powerful Personal Injury Industry

By Scott S. Smith | Wednesday, 15 March 2023 | Feature

Joshua Schwadron founded legal tech company Mighty to help personal injury lawyers to be more efficient, expecting they would pass along savings to accident victims. They never did, so he formed Mighty Law.

Joshua Schwadron's Mighty Law Is the David Up Against the Personal Injury Goliaths

Joshua Schwadron has been a star of the personal injury industry since he founded Mighty, a legal software provider in New York City, in 2015.

"Thousands of personal injury law firms have used it to lower their costs for a wide range of operations, managing the relationships with medical providers and insurance companies," he explained. "Right now, we have 5,000 law firms tracking over one million cases through our software."

But this was not the type of success Schwadron had really hoped for. He had assumed that at least some of the savings would be passed on to the victims of the accidents, who rarely can wait years for a settlement while needing to repair their car or buy another and are out of work because of medical treatments. 

"The current system has the insurance companies providing excellent service to their customers who caused the accident, while those they hit have to turn to what we call the billboard lawyers," he said. "Their ads promise millions in settlements, but the median personal injury case settles for $16,000 and 75% for less than $30,000. Worse, the billboards don't mention that the typical case compensates the lawyers with one-third of the money, but the victim also has to pay for medical treatment and other costs. It's advertising porn, as far as I'm concerned."

But it's worse than that, Schwadron says, because the P.I. firms are incentivized to recommend unnecessary medical treatments, since they take their fee as a percentage of the total. As an example, he asserts that expensive MRIs that are not considered necessary for many accidents by doctors are frequently required by attorneys. Many firms also refer patients to doctors who are infamous for doing unnecessary surgeries, practices known as "chop shops."

"And the shocking fact is that most P.I. attorneys don't do much, if any, lawyering," he said. "Many hand off most or even all of their cases to trial lawyers, and because cameras on streets, cars, and in cell phones usually provide documentation, there has been less and less legal work over the past decade, while costs to the victim have kept rising."

In June 2022, Schwadron shocked the P.I. industry and clients by announcing that Mighty would help directly serve personal injury victims through a newly-formed law firm, Mighty Law, which is currently providing lawyers for car accident victims in nine states. It is independent of the company but utilizes services and technology to manage cases directly with patients at a lower cost, in competition with those using Mighty's software.

Discovering New Ways to Help People

Schwardron grew up in Miami in a tight-knit family. There was a billboard on a main highway close to their home on which a local lawyer, a friend of the family, advertised that he could help anyone who was in an accident get a good settlement.

"I was impressed by his apparent success, but when I was a teen, I learned that he actually did not handle any cases, he signed up people, and then he and his team referred 100% of them to other attorneys," he recalled. "I was shocked because I thought he was this famous trial lawyer achieving justice, not a referral mill. My father explained that he wasn't bad for doing this, that he just chose to use his law degree to accomplish things non-attorneys could not do, and it was a successful form of a business. I thought it was abusing how he was representing what he did and began to notice how some people can strictly follow a set of rules, while others seek to bend them and see what they can get away with."

He had no idea then that his career would have anything to do with the law and billboard lawyers, of course. However, he became fascinated by watching attorneys argue, such as in one of his favorite movies, 1992's "A Few Good Men." He decided to get a law degree but not to practice the law in the long term — perhaps finding ways to use it to create a successful business.

"I had also become very interested in politics and loved the idea of being able to have a positive impact as a political leader," Schwardron recalled. "I noticed that so many of these leaders had law degrees. I envisioned a career that might start with a business based on my knowledge of the law, then becoming an elected official for a while. I expected after years in both fields, I would find a new field that I could be passionate about."

He says he was probably the only student in his class not planning to become a lawyer when he graduated from Emory University School of Law in 2006 (he earned his B.A. in economics from the University of Michigan School of Business in 2003 and an M.A. in accounting in 2004).

"After graduation, I moved to New York City, which seemed to be the best to get some political experience while doing a variety of legal work part-time for income," he explained. "I was somehow appointed to be the president [of the] community board of the Manhattan borough, which has 100,000 people and is something like being the head of a glorified homeowners association. I became turned off by the incompetent people I had to work with and the dysfunctional organization, and after three years, decided that local politics was not for me."

 By 2010, he decided he could provide a platform to make it easy for fitness trainers, hairdressers, piano teachers, reading instructors, and so forth to market themselves directly to the public instead of working for a business that attracted customers. He and backers founded Betterfly, which first appealed to niches like coaches for parkour athletic games, who show participants how to get from point A to B the fastest way, which can involve jumping from building to building, swimming, swinging, climbing, getting through obstacle courses, and so forth. It was so successful that it was acquired by Takelessons in 2013 (and was itself bought by Microsoft in 2021).

In 2013, Schwadron co-founded and served as managing partner of Summon Litigation Ventures, which put together a fund to finance the needs of plaintiffs while waiting for legal settlements. 

"I had a job right out of law school that provided personal injury practices with financing and was surprised consumers did not have similar help," he said. "These experiences made me think that if we could help PI firms save money, they would use the savings to help their clients pay expenses until the settlement, like car repair or replacement, rent, and food, since they are often not able to work due to their injuries. Half of cases take a year to pay out, and some more than five years, with one-and-a-half being average. "

A Bold and Mighty Service

Mighty delivered on its multi-layered approach to making the industry more efficient, "but we misjudged the monopolistic, insular, and cartel-like attitude of most of these law firms, which is that they don't compete on price or service quality and don't have an obligation to help their clients further than they already do."

It's not an evil clique that has a backroom deal, more human nature, and thirst for more profits, driven by the wrong incentives, Schwadron explained. Not everyone or every firm has the same level of bad practices, like maximizing the medical bills to add to the total and thus the amount of the firm's percentage, but the vast majority do not do everything they could to help clients through their post-accident journey, he said.

In 2021, he was approached by a number of clients about developing a new product that would help them compile medical records from hospitals that did not use Mighty's software. He modeled that it would bring in $10 million a year from this, even if only a small percentage of clients used it. But it was the intention of his clients to, as always, deduct the cost for this out of the injured party's settlement, just another way to revictimize them after the accident.

That was the turning point, as he and his backers decided to help develop a new kind of P.I. law firm in secret, which would operate at a lower cost for the victims and offer more services. 

As this was being planned, a friend mentioned that her father, who was an attorney, was handling some injury cases for friends, even though this was not his specialty. Schwadron asked why he did not simply turn these over to a P.I. firm. "He would never refer people he knows to one of those sharks," she responded.

He had always been embarrassed to admit that he had been helping the P.I. industry to save money. Now he assured her that this new service would be one that her dad would feel comfortable handling the cases of those friends.

Mighty Law has an extensive code of conduct that makes it unusual in the industry, some of which includes:

• It charges rates that are at least 10% lower than the industry standard.
• Clients have 60 days to decide if they are satisfied with the service, with no obligation if they decide to leave before a demand is filed, even when a settlement is eventually made by another law firm. 
• If Mighty Law decides it is unable to provide the right help, it will refer the case to another firm and serve as co-counsel at a lower fee than the industry standard.
• If the settlement is not an improvement over a pre-existing offer from the insurance company for the one who caused the accident, Mighty Law's fee will be reduced.
• The fee will be reduced at a certain level if there is no justification based on the amount of work. A $2 million settlement is not going to involve 10x the work as one for $200,000, said Schwadron.
• No medical treatments are recommended that are not truly necessary (and mental healthcare is available, which is rarely covered by other law firms).
• It works to provide financing to help the victims pay their bills, such as finding no-interest loans from family and friends, repaid by the settlement. 
• It is fully transparent to its clients.

And what has been the reaction of the industry, as Mighty Law is now competing with the clients of Mighty?

"The blowback has been much stronger than we expected," Schwadron admits. "Some of the billboard lawyers have informed medical providers they will no longer get referrals if they accept them from us. We even had three billboard firms reject our ads because they would be in conflict with their current customers."

Will this deter Mighty and Mighty Law from being so aggressive in their crusade?

"Oh no, we're emboldened," he asserted. "We know we have hit a nerve because we are telling the truth, and we intended to expand to all states as soon as possible."

About the Author

Scott S. Smith

Scott S. Smith has had over 2,000 articles and interviews published in nearly 200 media, including Los Angeles Magazine, American Airlines’ American Way, and Investor’s Business Daily. His interview subjects have included Bill Gates, Richard Branson, Meg Whitman, Reed Hastings, Howard Schultz, Larry Ellison, Kathy Ireland, and Quincy Jones.