The firm offers a "Value line adjustment", Clients are able to make any adjustment to the proposed fees they feel needed, Insane but authentic - not only does it assist in respect of the fees, it says a lot about the firm
Can be graduated based on amount or spend or a flat discount
Challenging to administer if retrospective - How should it be applied fairly over a range of work or multiple jurisdictions?
May be factored into fees already so not a genuine reduction
Places the onus on the firm to properly allocated work
Blended rates should be designed with appropriate weightings of time to reflect the input of different levels of lawyers
Could be offered as an alternative to billed rates if that happens to be lower on a matter
Factors that may result in the bonus e.g. a win or turnaround within a particular time, May be linked with reduced fees and a bonus payable on satisfactory completion, A great example of this is Jeff Carr's ACES model(TM) for FMC Technologies, In practice may not sufficiently motivate advisers on the ground and be a pain in the neck for in-house teams to administer, Difficult if the matter is a long running one or there are many changes in strategy or scope
For the caseload as a whole, it maybe linked to a reduction in overall spend
Can work well with high value as opposed to routine work
Can present problems in terms of accrual accounting - What is the correct reserve for the case?
If it is linked to discounted fees what is the real benefit?
Contingency fees may not be acceptable in all jurisdictions
Offers an opportunity for in-house teams to identify what they think the work is worth (although be clear what the going rate is)
Works well where case load can be predicted/tasks are predicted
Difficult to manage from a firm perspective without excellent processes
Challenging to set the fee without good historic data, But if set at an appropriate level provides advantages to firms, Supports partnership with clients without spectre of the clock being turned on, Security of instalments, Firm can embed relationships with the business, May provide a platform from which to obtain premium work, If on a per case basis, encourages a through case analysis at the outset
May limit the firms wanting to provide the fee
Is there an effective strategy for management of work exceeding the fixed fee? A reversion to hourly rates there may be an incentive to blow through the fixed fee barrier
Good budget management tools are important, Can encourage opportunism from the business which may impact on insurance premiums and future fees
In-house teams should be invited to test assumptions in the Fixed Fee Agreement to ensure that it is robust, There is no point in agreeing a fee that is known to be a low ball figure. Either the work will not be performed well or requests for increases will be forthcoming
Consider how the different elements of an alternative fee proposal work together to create an effective and efficient picture
Jointly consider various scenarios to confirm that instructions are clear
If fee agreements are ignored on a regular basis, all the effort in negotiations is wasted
e.g. Wiki based or private social network based options are available, Could crowdsourced legal advice ever be possible?
Deal a day model
Subscription services e.g. a gym
Group deal style arrangements for lawyers
Hourly billing may well be the most suitable approach here but the issue is budget management and costs transparency
It is a sad day when lawyers reveal the costs they have incurred and everyone knows it is vastly more than first discussed
Although they should not be undertaken without solid preparation to ensure that they accurately reflect the impact of the fee arrangement as opposed to the process (see Determinants of Success)