When Philadelphia insurance defense firm Marshall, Dennehey, Warner, Coleman & Goggin was informed by a client of 20 years, American International Cos. (the domestic property casualty arm of American International Group Inc., or AIG), that the firm was being audited for compliance with corporate litigation guidelines, the reaction was less than enthusiastic.

And no wonder: “The first audit was a disaster,” recalls Chairman Robert J. Coleman of the 1985 process. “We passed, but barely,” he says.

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