Transcript Slide 1
Navigating the World of
Alternative Fee Arrangements
The Network of Trial Law Firms
Litigation Management: Driving Great Results
Naples, Florida
May 12-15, 2011
Linda S. Woolf
Goodell, DeVries, Leech & Dann, LLP
Baltimore, Maryland
Panel Members
Linda Woolf
Marjorie Adams-Franzblau
Goodell, DeVries
Kevin Schiferl
Frost Brown Todd
Nicole Bearce Albano
Lowenstein Sandler
Rick Barnes
Goodell, DeVries
ADP
Rita McConnell
Medtronic
Michael Troisi
Samsung Electronics
What’s on the AFA Menu?
Risk Collar
Fixed/Flat Fee
Phased fees
Fee Cap Pricing
Task-Based Billing
Blended Hourly Pricing
Reverse Contingency
Variations of all of the above and more
Real Life Experiences with AFAs
Medtronic
Ford Motor Co.
ADP
Samsung
Experiences of Outside Counsel
Advantages of AFAs for the Clients
Perspective of corporate counsel
Cost Certainty
Alignment of Interests and Goals
Eliminate time spent reviewing budgets and bills
Law firm shares in risk
Instills trust and loyalty
Early assessment of case
adds value later
Advantages of AFAs for Law Firms
Perspective of outside counsel
Predictable income
Stronger relationship
Better understanding of client’s goals
Eliminate time spent on
budgeting and billing
Reduce conflicts over
billing issues
Concerns/Disadvantages
of AFAs for Clients
Perspective of corporate counsel
Early resolution makes AFA a bad deal
Push down of work to less qualified attorneys
AFA matters put on back burner
Financial cushion required by law firm may be
too large
Smaller companies lack experience to properly
price AFAs
Concerns/Disadvantages of
AFAs for Law Firms
Perspective of outside counsel
Requires time up front for which law firm may
not be compensated
Difficulty in pricing case/engagement correctly
Difficulty determining individual attorney
compensation
Risk that cost overruns will be shifted to law
firm
Concerns/Disadvantages of
AFAs for Law Firms
Perspective of outside counsel (cont’d)
Training attorneys to focus on efficient
resolution rather than billable time
Change or increase in client’s demands
Agreeing on what is considered a “win”
Ethical Implications of AFAs
Detailed written agreements
Interests of lawyer and client diverge
Termination of relationship mid-stream
Entering into partnership with non-lawyers
Staffing and prioritizing cases with best
interest of client in mind
Metrics
Monitoring and evaluating an AFA program
Practice Pointers
Do your homework in advance
One size does not fit all
Include fail-safe
Spread the risk
Invest in up-front time with client
Flexibility is key
Keep lines of communication open