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