When flat or fixed fees started to be bantered about in the last few years, partners in several of my firms said: “Won’t work for litigation, since it is too unpredictable.”  Well, welcome to the new world.

A recent article by Catherine Ho that appeared on The Washington Post’s “Capital Business” raised the question about

Don’t get left behind. My colleague Jim Hassett has talked extensively about alternative fees over on his Legal Business Development blog for months. Jim conducted interviews this year between June and September with many high level people at 37 of the AmLaw 100 law firms. He will publish his survey report next month. You can

For those who rushed out this past weekend to take advantage of the “Cash for Clunkers” program (like my son), now it is time to rush to offer fixed fees. According to a front page story in today’s Wall Street Journal the “’Billable Hour’ (is) Under Attack,” and more and more companies are demanding fixed fee arrangements from their outside law firms. BigLaw is beginning to get the message.

Additionally, my colleague Jim Hassett has written extensively about alternative fees on his blog, Legal Business Development. He is currently conducting a survey of the AmLaw 100 firms’ practices in this area, and the survey should be completed in the next few weeks. The results will undoubtedly shed light on the views regarding alternative fees among these firms.

Since smaller firms are more flexible in terms of changing their billing structure than are the more bureaucratic, large firms, there is still time for small to medium-sized firms to take advantage. So, don’t wait.

Time is of the essence as they say. Call your key clients now to let them know you are willing to discuss flat fees before you get left behind. It won’t be long before the big guys get that huge tanker turned around.

If you are interested in reading some of my posts on alternative fees over the past 4 years…Continue Reading Offer Fixed Fees NOW!

Evan Chesler, presiding partner at Cravath, Swaine & Moore shocked a lot of people within the legal community with his recent opinion piece on Forbes.com advocating the death of the billable hour.

Basically, he states that the billable hour “makes no sense.” Making more money by dragging out a matter (or in his analogy, making more money by getting “bogged down a land war in Asia”) is “frankly nuts.” Pretty strong words from a firm that doesn’t really have to worry about clients questioning their bills, I wouldn’t expect.

Even though tons of folks (too many people to mention here) in blogosphere, including yours truly, have long advocated doing away with the billable hour, Chesler’s comments, one could argue, clearly takes the debate to a higher level. Not many would expect such a position from a BigLaw firm of Cravath’s stature. Now maybe the concept of alternative fees, although not new, will take on a bit more momentum.

Although there have been many different suggestions for alternative fee arrangements (see Continue Reading below for a few of my posts on the topic), I found a couple of ideas from a named partner in a 10-lawyer Philadelphia area firm worth considering.  Gary Lentz of Bochetto & Lentz wrote an article published in The Legal Intelligencer and on Small Firm Business suggesting a couple of approaches that could attract new clients and enhance fee opportunities  in this down economy.

The following two variations on the same theme are worth consideration by firms of all sizes:

  • Multi-phased Fee Agreements
    • Phase I – an initial flat fee to evaluate the case, develop strategy, negotiate and “prompt resolution” (with a potential for a bonus) and drafting complaint, if necessary;
    • Phase II – a mix hourly, fixed fee and/or contingency, if necessary to file and pursue the matter in court.
  • Blended Contingency Fee Agreements – an initial flat fee to cover the evaluation of the case and drafting the complaint, followed with a contingency fee based on outcome of the matter.

Take a look. They may just work for your firm, particularly with clients who are encountering their own uncertainties in the current economy.Continue Reading Now Is The Time To Consider Alternative Fees