Thursday, September 30, 2010

Alternative fee arrangements build relationships.

This September 27th article from the Daily Record struck a chord with me. Alternative fee arrangements are not new to me. They have been a topic of conversation in every firm I have been a part of for the last 20 years. For the most part, clients have been distrustful of alternate fee arrangements suggested by outside counsel. The unspoken suspicion was that the lawyer sought to "get over" on the client, and so the relationships continued to chug along on the basis of the billable hour.

Current economic pressures on our corporate and insurance clients now have the pressure for alternate fee arrangements flowing in the other direction. The trend now is for the sophisticated legal consumer to demand alternate fee arrangements. Whether the alternate arrangement is negotiated, or unilaterally imposed by the client, this article cites to the most important component of any fee arrangement---trust. Counsel must trust that he is being fairly valued, and paid for the value he provides to the client. The client must trust that its work is receiving the attention and care it deserves, and that the work is offered at a fair market rate.

Near the end of this article, an in-house counsel hits the nail on the head. Having practiced in the real world, he acknowledged the daily pressure of having multiple phone messages to return, and the need to prioritize among his clients. As in-house counsel, he now wants his calls to be returned first, "not because [he] pays a lot of money, but because the working relationship is good."

Both the client and the lawyer have a shared goal of prospering and coming out of this economic downturn. Neither will do this at the sole expense of the other. Let's build trust through a fair engagement.