Alternative Fee Arrangements, Value Billing, Metrics in a Dwindling Marketplace for Legal Services: Are We All Marching to the Beat of the Same Drummer?


If you thought 2009 and 2010 were tough for the legal profession, wait until you ride the 2011 roller coaster.

As demand for legal services continues to dwindle, law firms are struggling to maintain market share, even as clients seem to be demanding increased value billing and alternative fee arrangements. Law firms are responding with increased value billing proposals and creative alternative fee arrangements. Yet, confusion abounds: The metrics for measuring the value of AFA’s provide virtually no guidance. Other than understanding the obvious, namely, that clients are demanding lower legal bills, law firms remain uncertain as to how they can best provide value billing and meaningful alternative fee arrangements. Too much confusion abounds at law firms as firms develop sophisticated AFA programs and clients too often seem indifferent; instead, clients seem too often just want to know what discounts are being offered. A principal issue is that clients want real value, while law firms seek every avenue to offer value. But, sometimes, the value added does not immediately translate in to revenue.

For lawyers and law firms to succeed in this market, they must establish themselves as marketplaces for value. The legal work and fees will follow.

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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.

© Jerome Kowalski, Kowalski & Associates | Attorney Advertising

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