Alternative fee arrangements will not be ignored!

Supply and demand. Although it doesn’t seem like it, the current economy still works this way. But today, it seems to work in reverse – demand and supply. Clients demand a different way to make services fit their budget – and alternative fee arrangements (AFAs) are the result. If your clients haven’t already asked about AFAs, you can be pretty certain they will – soon. Time to plan your response before they do!

How did the billable hour become so vilified? The depressed economy is an obvious culprit. Clients have become accustomed to being offered value or package pricing in other areas, so why not legal advice? In an environment where pretty much everything is negotiable, clients have little tolerance for high hourly rates. This is particularly true when they can easily find out a firm’s annual revenue, even drilling down to profits per partner, thanks to publicly available listings like the AmLaw 100.

So, what should your firm do? Considering the clients’ viewpoint is step one. Then, perform some competitive research into how other firms are handling AFAs and develop a firmwide response. Fortunately, we’ve done some of this for you, through a comprehensive overview of the most common AFA models in our white paper, as well as best practices for creating your own.

Has your law firm been successful with AFAs? Unsuccessful? Tell us about it!