Get on the Winning Side of the Alternative Fee Transition


A tsunami of change has formed, as an increasingly high percentage of new matters for large corporations are being subjected to some form of alternative fee structures. Learn what clients mean when they talk about "litigation by the bucket" and "concierge plans."

For example, at the recent Association of Corporate Council annual meeting, there was a full day of programs on the Value Challenge and Alternative Fees. This movement is being formally embraced by many top corporations and informally pursued among general counsels almost across the board. Clients want more value, predictable expenditures and clear return on their investment.

Here are just a few of the alternative fees structures that are becoming more popular among clients:

• Bounty hunting : Offering a highly discounted fee for a poor outcome and different rate for a good outcome

• Concierge plans: Put specialists on a flat fee retainer to answer questions.

• Exclusivity in exchange for a discount: Promise that a firm will have first dibs on certain work in exchange for aggressive pricing commitments up front

• Litigation by the bucket: Tell your litigator what a dispute is worth to you, give the firm that amount of money and let the firm resolve the matter however they'd like.

• Risk sharing: Create incentives and link fees to quality of outcome, speed of outcome, quality of work. Pay premiums for success and discounts for lesser outcomes.

While these are emerging fee structures, clients are also insisting on more traditional alternatives such as fixed fee arrangements and blended rates. More importantly, they are shopping work to boutique firms and even non lawyer service providers.

LOADING PDF: If there are any problems, click here to download the file.