Value Focused Fees-It's No Longer Whether or Even Why Not-Now It's When?


Reprinted/posted with permission of Daily Journal Corp(2009)

Third of Four Articles in a Series.

By Jeff Carr, Patrick Lamb, Patrick McKenna and Edwin Reeser

Value Focused Fees – It’s No Longer Whether or Even Why Not – Now It’s When?

In article 1, we explored the structural impediments in large law firms to alternative fees, the role of the relationship partner, and the need for the client to push for and support the relationship partner in adopting alternative fee structures. Article 2 examined the pitfalls of some so-called alternative fee structures and laid the groundwork for an alternative fee structure that works for both the client and the firm. We now turn our attention to the client – and in particular the in-house team responsible for delivering legal services to the client. This awakening giant that has both enabled and empowered the firms to structure the relationships as they are today now holds the key to driving change to value focused engagement models.

The critical element in alternative fee structures is having an element of shared risk and performance. We call these “value-focused” fee structures, and while some debate the interstices of the definition of “value,” it really comes down to efficiency, effectiveness and customer satisfaction. The debate is no longer about why or whether we should move to value based legal service delivery models – it’s about how and when.

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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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