1. Navigating the World of Alternative Fee Arrangements
The Network of Trial Law Firms
Litigation Management: Driving Great Results
Naples, Florida
May 12-15, 2011
Linda S. Woolf
Goodell, DeVries, Leech & Dann, LLP
Baltimore, Maryland

2. Panel Members Linda Woolf Goodell, DeVries Kevin Schiferl
Frost Brown Todd
Nicole Bearce Albano
Lowenstein Sandler
Rick Barnes
Marjorie Adams-Franzblau
ADP
Rita McConnell
Medtronic
Michael Troisi
Samsung Electronics

3. What’s on the AFA Menu? Risk Collar Fixed/Flat Fee Phased fees
Fee Cap Pricing
Task-Based Billing
Blended Hourly Pricing
Reverse Contingency
Variations of all of the above and more

4. Real Life Experiences with AFAs
Medtronic
Ford Motor Co.
ADP
Samsung
Experiences of Outside Counsel

5. Advantages of AFAs for the Clients
Perspective of corporate counsel
Cost Certainty
Alignment of Interests and Goals
Eliminate time spent reviewing budgets and bills
Law firm shares in risk
Instills trust and loyalty
Early assessment of case adds value later

6. Advantages of AFAs for Law Firms
Perspective of outside counsel
Predictable income
Stronger relationship
Better understanding of client’s goals
Eliminate time spent on budgeting and billing
Reduce conflicts over billing issues

7. Concerns/Disadvantages of AFAs for Clients
Perspective of corporate counsel
Early resolution makes AFA a bad deal
Push down of work to less qualified attorneys
AFA matters put on back burner
Financial cushion required by law firm may be too large
Smaller companies lack experience to properly price AFAs

8. Concerns/Disadvantages of AFAs for Law Firms
Perspective of outside counsel
Requires time up front for which law firm may not be compensated
Difficulty in pricing case/engagement correctly
Difficulty determining individual attorney compensation
Risk that cost overruns will be shifted to law firm

9. Concerns/Disadvantages of AFAs for Law Firms
Perspective of outside counsel (cont’d)
Training attorneys to focus on efficient resolution rather than billable time
Change or increase in client’s demands
Agreeing on what is considered a “win”

10. Ethical Implications of AFAs
Detailed written agreements
Interests of lawyer and client diverge
Termination of relationship mid-stream
Entering into partnership with non-lawyers
Staffing and prioritizing cases with best interest of client in mind

11. Metrics
Monitoring and evaluating an AFA program

12. Practice Pointers Do your homework in advance
One size does not fit all
Include fail-safe
Spread the risk
Invest in up-front time with client
Flexibility is key
Keep lines of communication open