My second session on Thursday, March 11, 2010 was “Examining the Current Use of Alternative Fee Arrangements,” with presenters Lindley J. Brenza, a partner at Barlit Beck Herman Palenchar & Scott LLP and Reed S. Oslan, P.C., a partner at Kirkland & Ellis LLP, and moderator Gabriel Miller, general counsel at Sokolove Law.  Because this is a hot topic in the legal industry, the session was well-attended and spawned some interesting conversation.

Oslan started by saying that Kirkland & Ellis have been doing a lot of alternative billing, and believe there will be even more in the future.  Brenza agreed, saying that at his firm, they do nothing by the hour anymore for new matters.  To clarify for everyone, they put up a graphic of the four types of legal fees – hourly, fixed, contingent and hybrid.  Brenza said that his firm doesn’t do hybrid billing arrangements, because they are too problematic.  Interestingly, he added that the ABA considers non-hourly billing more ethically sound and client-focused than hourly billing.  The panel agreed that because of financial constraints in this economy, clients are willing to take more risks with their lawyers on how fees are structured – this was borne out in the general counsel panel the following day by clients who admitted to being reticent to use alternative fee arrangements, but felt pressured to find the most economically efficient way to handle legal work. 

One of the panelists pointed out that despite the industry’s seeming fear of moving away from the billable hour, hourly billing rates have only been around for the last sixty years.  When they took an informal poll of the room, most of those present were from firms doing some type of non-hourly billing.  Oslan said that it has taken his firm some time to get comfortable with the idea of alternative fees, and observed that clients aren’t always ready to take that route.  Brenza agreed and said that although his firm does work entirely on an alternative fee basis, clients come to them for their skill, and not their fee schemes, and it often takes some time for them to become comfortable with it.  But at heart, the panel said that basically, clients want less expense and more certainty.  Law firms can’t say that their work is too unique for a budget – it may be a leap of faith to handle work on an alternative fee basis, but other vendors are already doing it.

That being said, the panel agreed that the discussion over alternative fees is actually a lot bigger than the demand for them.  There are a lot of downsides to discounts, which the attorneys don’t always consider as part of alternative billing.  Oslan pointed out that most firms are pyramid-shaped, with the majority of the lawyers being associates, and billable hours are rewarded.  These types of firms can’t easily do alternative fees.  Firms built for non-hourly billing are structured differently – more diamond shaped with the greatest number of attorneys being experienced partners.  To be able to do alternative billing at a firm shaped like this, the partners doing it must be supported by the firm. 

The key takeaway from this presentation was that although the demand for alternative billing arrangements isn’t as high as it’s hyped to be, clients are looking for less expense and more certainty in their billing and firms will have to be able to adapt to best service their clients. 

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Photo of Lindsay Griffiths Lindsay Griffiths

Lindsay Griffiths is the International Lawyers Network’s Executive Director. She is a dynamic, influential international executive and marketing thought leader with a passion for relationship development and authoring impactful content. Griffiths is a driven, strategic leader who implements creative initiatives to achieve the…

Lindsay Griffiths is the International Lawyers Network’s Executive Director. She is a dynamic, influential international executive and marketing thought leader with a passion for relationship development and authoring impactful content. Griffiths is a driven, strategic leader who implements creative initiatives to achieve the goals of a global professional services network. She manages all major aspects of the Network, including recruitment, member retention, and providing exceptional client service to an international membership base.

In her role as Executive Director, Griffiths manages a mix of international programs, engages a diverse global community, and develops an international membership base. She leads the development and successful implementation of major organizational initiatives, manages interpersonal relationships, and possesses executive presence with audiences of internal and external stakeholders. Griffiths excels at project management, organization, and planning, writes and speaks with influence and authority, and works independently while demonstrating flexibility in thinking, especially in challenging situations. She also adapts to diverse and dynamic environments with constant assessment and recalibration.

JD Supra Readers Choice Top Author 2019

In 2021, the ILN was honored as Global Law Firm Network of the Year by The Lawyer European Awards, and in 2016, 2017, and 2022, they were shortlisted as Global Law Firm Network of the Year. Since 2011, the Network has been listed as a Chambers & Partners Leading Law Firm Network, recently increasing this ranking to be included in the top two percent of law firm networks globally, as well as adding two regional rankings. She was awarded “Thought Leader of the Year” by the Legal Marketing Association’s New York chapter in 2014 for her substantive contributions to the industry and was included in Clio’s list of “34 People in Legal You Should Follow on Twitter.” She was also chosen for the American Bar Association Journal’s inaugural Web 100‘s Best Law Blogs, where judge Ivy Grey said “This blog is outstanding, thoughtful, and useful.” Ms. Griffiths was chosen as a Top Author by JD Supra in their 2019 Readers’ Choice Awards, for the level of engagement and visibility she attained with readers on the topic of marketing & business development. She has been the author of Zen & the Art of Legal Networking since February 2009.