Attorneys earned $49 million from Maine’s Workers’ Compensation system last year, according to Maine Bureau of Insurance figures.

Stacked up against a total cost of $430 million, legal fees alone do not stand out. Insurance agents, for instance, made $26 million in commissions on Workers’ Compensation policies last year, while medical bills accounted for $105 million.

But critics say that the costs of litigation in Workers’ Compensation go far beyond attorneys’ fees. Litigation also means fees for physicians, psychologists, investigators, rehabilitators and other experts who face off in contested Workers’ Compensation cases.

“Maine has far more litigation than other states with more efficient systems,” claims the 1991 report from the Governor’s Task Force on Workers’ Compensation Reform.

The task force reports that lawyers are involved in 90 percent of all “major” cases. An independent study shows that 30 percent of all lost-time claims are contested, along with 10 percent of claims for medical bills only. Half of those make it to an informal hearing.

In 1988, 6,000 of the nearly 80,000 claims made it to a formal hearing, a quasi-judicial process that always involves lawyers.

Some say that is the only way. “I think an adversarial system is the best way to get at the truth,” says James Cox, one of two Workers’ Compensation commissioners stationed in Bangor. “I don’t see a lot of frivolous petitions coming before me, although I admit some of them are posturing.”

Lawyers claim that reforms in the last 10 years have taken away any incentive there may have been to prolong their involvement in cases.

One change prohibits workers’ attorneys from collecting fees for any work done prior to preparation for a formal hearing. Another law limits workers’ attorneys from collecting fees if they fail to “win,” or collect more than the worker would have received without their help.

“It is a field that pays well for those lawyers that are successful,” says Thomas Watson of McTeague, Higbee, Libner, MacAdam, Case and Watson, a Topsham firm.

In this small bar — fewer than 200 lawyers in Maine concentrate on Workers’ Compensation — the McTeague firm looms large. Known as an advocate for workers, senior partner and former state legislator Patrick N. McTeague played a major role in raising workers’ benefits through legislation during the 1970s. The firm still lobbies actively on behalf of labor, and many of its former lawyers — including current Workers’ Compensation Commission Chairman Ralph Tucker — have gone on to work in other parts of the system.

Watson, who says he has 1,000 Workers’ Compensation claims open at any one time, adds that not all his colleagues are successful. “It is a loss-leader for some attorneys who want that client for other business, like third-party liability suits.”

Watson says that the reforms have made it advantageous for both client and lawyer to clear up a case as quickly as possible. “As long as the thing’s in litigation, no one’s going to get paid,” he says.

Some say that further reforms are needed, in reducing Workers’ Compensation litigation.

In Wisconsin, functional impairment claims — similar to a subjective and frequently disputed benefit in Maine known as partial incapacity — are determined by a system that involves lawyers less than a third of the time, and requires a commissioner’s formal judgment for only 3 percent of its cases.

Resolution of “functional impairment” in Wisconsin differs from Maine’s system, and even other parts of Wisconsin’s program, in several important respects.

Perhaps the most radical difference is the use of “final-offer adjudication.” In a final-offer setting, the commissioner must adopt either one party’s claim or the other’s; in Maine, by contrast, the commissioner can make an independent judgment differing from both parties’ claims, choosing a compromise position.

The Workers’ Compensation Research Institute, an independent think tank in Massachusetts, claims that the final-offer system puts a premium on a doctor’s credibility and moderation. A doctor testifying for an extreme settlement is less likely to be endorsed by a commissioner; that in turn pushes both sides toward a middle position, and makes the dispute that much easier to settle.

Wisconsin’s functional impairment process also establishes guidelines for physicians to use in evaluating injuries, and gives the state commission a more active role in supervising claims before disputes occur.

“These features together provide a model for other states that want to reduce the level of litigiousness in their systems,” the institute concludes in its report on Wisconsin.

But many lawyers in the Bangor area say that it is less a matter of process, and more a matter of attitude. Central and northern Maine cases, they say, tend to go much more smoothly than cases in the Portland area, and therefore cost less to resolve.

“The whole system works better if there’s a reasonable level of cooperation and a reasonable level of understanding on each side,” says Peter Weatherbee, a Bangor lawyer who represents employers and insurers. “The idea isn’t to scrap the system, but to work within it.”