How Lawyers Can Easily Offer Alternative Fee Arrangements
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Have you been wanting to implement alternative fee arrangements (AFAs) in your practice, but you just don’t know how? We get that it’s one thing to move away from the strict billable hour because a client requested that you do so, but it’s very different when you’re the one proposing it. However, doing so can be a win-win for both you and your client: Altman Weil’s latest Law Firms in Transition survey showed a “7-year trend of compelling success enjoyed by firms that take a proactive approach to alternative fee arrangements.” In other words, being proactive can help you make more money and make your clients very happy. This webinar will help you figure out exactly how to start offering AFAs to your clients.
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How Lawyers Can Easily Offer Alternative Fee Arrangements
- 1. How Lawyers Can Easily Offer Alternative Fee Arrangements May 11, 2017
- 3. 888-432-1529 www.rocketmatter.com 72% of firms are reacting with AFAs in response to client requests
- 4. 888-432-1529 www.rocketmatter.com What about the 28% that proactively initiate AFAs?
- 5. 888-432-1529 www.rocketmatter.com 84% find their non-hourly projects to be at least as profitable. Reactive firms only report that in 51% of their non-hourly projects.
- 6. 888-432-1529 www.rocketmatter.com 40% of proactive firms report their non-hourly projects are more profitable than their hourly projects, compared to only 10% of reactive firms
- 7. 888-432-1529 www.rocketmatter.com How can you make offering AFA’s a reality for your firm?
- 8. 888-432-1529 www.rocketmatter.com Some of Your Options Fixed or Flat Fee Contingent Fee Performance-Based/ Success Fee/ Holdback Task Based Billing Retrospective Fee Hybrid Fee
- 9. 888-432-1529 www.rocketmatter.com Three issues to tackle: 1) How to recognize when an alternative fee agreement is appropriate 2) How to turn that into a contract that accurately reflects the relationship and fee agreement 3) How to effectively manage the fee agreement over the lifetime of the case.
- 10. 888-432-1529 www.rocketmatter.com Part 1: Recognizing when an Alternative F Arrangement is appropriate
- 11. 888-432-1529 www.rocketmatter.com How attorneys approach these scenarios… 1) Complex Business Litigation 2) Divorce, Transactional & Litigation Flat Fee/ Capped Fee 3) Leveraging the Contingency Arrangement
- 12. 888-432-1529 www.rocketmatter.com Part 2: Translating the Alternative Fee Arrangement into a Fee Agreement
- 13. 888-432-1529 www.rocketmatter.com The Fee Agreement 1) Make sure it represents what each party’s intent is 2) The devil is in the details! Footnote examples are helpful here 3) Make sure you are always aware of what your agreement is
- 14. 888-432-1529 www.rocketmatter.com Part 3: Managing the Fee Arrangement
- 15. 888-432-1529 www.rocketmatter.com Use your Practice Management Software 1) Custom Rates 2) Recurring Billing and Payment Plans 3) Tracking time and sending invoices 4) Reporting as a tool
- 17. 888-432-1529 www.rocketmatter.com Your State Bar’s Member Resources Site
- 19. Questions?
- 20. Thank You! nefra@rocketmatter.com | dpoterek@theburtonfirm.com
Editor's Notes
- Daniel Poterek is a Partner at The Burton Firm, P.A. At his firm, Daniel manages all aspects of complex litigation in state and federal courts. He has built a client base for a diversified legal practice that focuses on employment disputes, business consulting, commercial law, family law, business transactions, and real estate. Daniel has experience with cases involving violations of state and federal employment laws, retaliation claims, wrongful death, defamation, fraud, negligence, civil conspiracy, tortious interference, breaches of contract, and intentional infliction of emotional distress. Daniel received his Bachelor of Arts from the University of Miami in 2007 and his Juris Doctor from the University of Miami School of Law in 2010.
- Nefra
- Nefra Nearly all firms surveyed as a part of Altman Weil’s 2016 Law Firms In Transition survey (97%) bill at least some of their work on a basis other than rates times hours. Among those engaged in AFA’s, far more firms are likely to take a reactive approach in response to client requests
- Nefra
- Nefra
- Nefra
- Intro Daniel
- Daniel: Fixed or Flat Fee Contingent Fee Performance-based/ Success Fee/ Holdback Task Based Billing Retrospective Fee Hybrid Fee
- Daniel: 1) How to recognize when an alternative fee agreement is appropriate 2) How to turn that into a contract that accurately reflects the relationship and fee agreement 3) How to effectively manage the fee agreement over the lifetime of the case.
- Nefra to Intro and Banter This is the section where we’ll go through hypotheticals
- Hypo #1, Hybrid: Complex business litigation case. A represents P. Asked about countersuit possibility, with multiple defendants. Will be a defense side to this case as well. All work being billed at a reduced hourly rate, if recover on plaintiff’s side, would receive a contingency fee. Client got a reduced hourly rate, felt comfortable knowing we had skin in the game to win the case. Hypo 2, Flat Fee/Fixed Fee/Capped: Popular in divorce cases, transactional, litigation. Hypo 3, Contingency: Evaluate possible recovery and expected costs. 1) Pure contingency, 2) Reduced contingency with client responsible for up-front costs and evergreen cost retainer, 3) Reduced contingency with hourly built in
- This is the section where we’ll go through sample agreements
- 1) Make sure it represents what each party’s intent is 2) The devil is in the details! Footnote examples are helpful here 3) Make sure you are always aware of what your agreement is
- Nefra- This is the section where we’ll go through Rocket Matter and how to document certain arrangements, how billing works, reporting, etc.
- Transition to RM Demo
- Websites, books, etc.
- When do attorney’s costs get calculated?