How Can I Talk to My Lawyer about Alternative Fees


The resolving recession may have some permanent effects. One good thing is the willingness of more law firms to negotiate fee arrangements that do not focus on the billable hour, frequently referred to as Alternative Fee Arrangements, or “AFAs.” AFAs can take the form of fixed fees for defined projects, success fees, contingent fees, so-called “Retainer Fees” [1] and variations on all of them.

Most lawyers who practice business law have relatively little experience in pricing their services. They are used to billing by the hour, because that’s what they were trained to do. Nonetheless, you can use the new openness in your favor by agreeing to your legal fees in advance, signing an agreement, and gaining more control over the value of your legal expenditures.

How do you raise the topic? It’s easy. Just say “I’d like to consider paying you for your services in a way that does not depend on the hours you expend.” If it’s just a contract that you need drafted, a single flat fee is usually appropriate. If it’s a negotiation over a contract, you can still agree to a flat fee, but you should expect it to be higher than the fee for the drafting alone. If you are entering into a complex legal situation, you may need to propose that the attorney give you fixed fees for specific stages or portions of that project. Don’t be shy. If your attorney does not readily propose a fee in response to your request, there’s nothing stopping you from proposing one to the attorney. They can either accept it or reject it. It’s a simple matter of doing business and agreeing to a price.

Here are some of objections you might hear, along with some suggested responses....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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