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Are you Thinking…Alternatively?

Now, as I mentioned in my summary of the GC Panel at the LMA Conference this year, Jeff Carr says he’s banned the word “alternative,” because there should be nothing alternative about alternative fees.

But, for the sake of this recap, we’re going to use it, as that’s what the session focused on.  Tim Corcoran shared with us the salient points from the alternative fees session that he attended at LMA (and often speaks on himself). 

  • Most law firms are reactive when it comes to offering alternative fees because they’re concerned that they’re dilutive to profits. But the firms that have figured this out and are acting proactively are seeing business development opportunities and more work.
  • There’s a correlation between value and charging – lawyers need to understand this.
  • Firms that are more proactive have a toolkit – there’s recognition of what they use for various patterns, and a gating process for approval.
    • Firms still don’t have the greatest monitoring. They need to meet threshold levels, so monitoring is critical.
    • Continually revise this toolkit – after each matter, figure out what worked, what didn’t, and what the scope was.
    • Clients also have creative ideas – talk to them.
  • Fees are moving from a last minute drop-in in the proposal stage to being done up front, with the rest of the proposal built around the billing.
    • Don’t even start the process until billing is in order.
    • This is still driven by lawyers, but it’s becoming more symbiotic with marketing.
  • Clients are coming to the table with much more information on billing (as I mentioned Janet Dhillon of JC Penney said), so be prepared!

What trends are you seeing in alternative fees at your firms?