Clients often complain that elite full service law firms pay lip service to the concept of flexible billing arrangements, but seldom deliver with creative flexible solutions. Although individual lawyers may want to be flexible, committees and rules can get in the way. This is understandable. One of the biggest risks law firms face are bad business deals made by individual lawyers.
To prevent this, most elite law firms have strict guidelines when it comes to alternative fee agreements. For example, small discounts may be left to the discretion of an individual billing attorney, but when discounts increase beyond say 10 percent, a series of rules and approvals quickly swing into play. Full and partial contingencies are even more problematic. The concept of contingencies, after all, does not apply to most practice areas. If an attorney, for example, successfully defends a case, that is worthy of a victory celebration. But a defense win, in and of itself, does not generate a direct, substantial and easily quantifiable revenue stream for the client. Because of this, contingency committees tasked with approving contingencies at the better full service law firms tend to be overly risk averse. In the end, the guidelines and procedures set up by these firms can result in inflexibility rather than flexibility.
Offering The Fee Flexibility That Corporate Clients Need And Deserve
General Counsel’s offices throughout corporate America, and the world, are mandating alternative fee arrangements. Elite boutique insurance recovery law firms, such as Miller Friel, can offer the flexibility that corporate clients need and deserve. The fact that we practice only in the area of insurance recovery law, permits us to instinctively understand insurance recovery claims in a way that others simply can’t do, no matter how much legal research they conduct. It also has allowed us to proactively address the issue of alternative fee agreements for insurance recovery law. Rather than react to this mandate on a case by case basis, we have pre-approved flexible billing arrangements that can save our clients considerable expense over straight hourly billing. Miller Friel does not take on all potential clients. But, when we do, we are committed to their success, and we are willing to partner with them, both on risks and rewards.
Please watch the video to learn more.
If you would like to read the transcript of the video, we’ve included it below:
Alternative Fee Structures for Insurance Recovery Law
Clients have asked us many times how flexible are you in billing? And that’s a very big issue for corporate legal departments nowadays. Its one of the big things that they look for is flexibility. Sometimes they find flexibility in law firms and sometimes they don’t. But what we’ve done is that we have pre-approved a system of flexibility that allows clients to know to come in and to know how they can decrease costs on the alternative billing side. So again this ties in with the total model. This is a way to decrease costs and we’ve got the pre-approved plan that helps clients to decrease legal costs. Which in the end is going to help them increase revenues because they don’t have to spend anything on our services or they spend much less on our services than the full rates. So here’s how it works.
We have a system in place where we just take what’s the standard contingency. The standard contingency is probably 35% and we tell clients how much do you want to save? Do you want a 10% discount ? Do you want a 20% discount? Do you want a 30% discount? And they will tell you. Client’s work the numbers and they try to figure it out. So for a 10% discount based on a 35% contingency we would take a 3.5% contingency on the back end for the amounts recovered. If you want to 20%, we would take 7% if you’d want to 30% we would take a 10.5%. As a law firm we are neutral as to what the client wants to do. If the client wants to do this sort of arrangement, we are happy to. If the client understands that that’s not the right arrangement, than we are happy to do that and we can bill hourly. The point of the matter is we are very flexible. We offer this to all clients. We don’t second-guess their motives. We don’t second-guess what they are thinking. It’s something that we offer. If you want to discount, you’re entitled to it, all you have to do is ask.
All law firms have standard rates. And those are the rates that clients pay when they come in the door. Those will be quoted to you and X dollars an hour. For a good law firm or for a high end law firm they are generally going to range in $500-$1000 an hour depending on your specialty and what type of work you do. So if you go to a large law firm and you say well can you give me some sort of creative approach to manage the costs? You’ll hear a lot of words but in the end you won’t get concrete action. They’ll say we can give you a 10% discount but I’ll have to check with management and it has to be approved. And you’ll say 10% is not enough you’re out of the rate is $1,000 an hr we want 20%. Well I’ll check with management. So it’s a process. What we tried to do is simplify the process and make it easy for clients. They come in the door they have a claim and they say look can you give us a discount and we say certainly, here’s what it is. We don’t have to go to management, it’s all been pre-approved. And it’s a certain way that clients can save costs.