Wednesday, July 11, 2007

Alternative Fee Arrangements Come to BigLaw?

The hourly fee arrangement for attorneys has been the standard and traditional method for paying for legal services. In recent years, many small firms, including my firms, have offered alternative fee arrangements to our clients. Alternative fee arrangements can take a variety of forms, including fixed-fee arrangements, discounted fees with bonus provisions for identified goals, minimum-maximum fee arrangements, and even contingency-based defense fees.

Each of the alternative methods, as well as the hourly method, have their own issues and problems, and it sometimes takes a creative client, and a creative attorney, to create a fee arrangement that works for all concerned. Smaller law firms have always had the flexibility to offer such alternative arrangements to their clients, and have been doing so for years.

Apparently BigLaw is starting to feel the pressure of ever-increasing associate salaries and the resulting ever-increasing hourly rate. Law.com has an article published today, Are Big Firms Warming Up to Alternative Fee Deals? that examines the use of such fee arrangements at the nation's largest law firms, with some interesting anecdotes regarding the use of performance driven fees.
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