Tag Archives: alternative fee arrangements

Law Firm Pricing (& Voting Day) Predictability: Using Alternative Fee Arrangements

The result of today’s vote is anybody’s guess. But, does the United States Electoral College have the power to change history?

The faithless elector—words that sound ominous. A faithless elector is s a member of the U.S. Electoral College who does not vote for the presidential or vice-presidential candidate for whom they had pledged to vote.

See, the U.S. Electoral College is a strange beast. As we all know, citizens of the U.S. do not actually elect the president or the vice president directly; instead, “electors” are chosen to pledge a vote for a particular candidate on behalf of their respective U.S. State residents every four years.

Electors in all states, with the exceptions of Maine and Nebraska, have been chosen to pledge votes on a “winner-take-all” basis since the 1880s. Under this method, all of a state’s electors vote for the candidate who wins the most votes in that state.

However, Maine and Nebraska use the “congressional district method”, which means each congressional district gets an elector to vote on its behalf and then two separate electors vote according to the statewide popular vote.

In the end, however, electors are often free to vote as they see fit without any consequence.

Georgia and Texas are two of 21 states without faithless elector laws. That means, there’s no penalty for voting against your statewide consensus. In addition, while the other 29 states (and D.C.) have such laws, no faithless elector has ever been prosecuted, according to the Archives and The Washington Post.

There have been several occasions where electors have broken their pledge to vote for a particular candidate. Although faithless electors have a small place in history, considering they are few and far between, they do have the power to change the outcome of an election.

Despite polling efforts, you might say this election is impossible—literally—to predict.

You can predict, however, firm fees for your clients. In fact, more and more clients, both large and small, are proactively asking for cost predictability, certainty, and transparency.

Law firms, for their part, can work toward creating a pricing strategy that goes beyond one-size-fits-all, and attracts more business through alternative fee arrangements.

Transparency is essential—whether in politics or business—where the devil is in the pricing details. Craft new policies that require your firm to share data with its clients about how your work is being allocated and billed.

These days, data analytics is an easy way to support pricing decisions (and delight clients with your tech-savvy sophistication). This will improve your firm efficiency, as well as client satisfaction.

To learn more, take the Center for Competitive Management’s webinar, “Utilizing Alternative Fee Arrangements for Greater Predictability & Client Satisfaction.

Like every (electoral) vote, every dollar counts for your client.

-WB

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Law Firm Pricing Strategy, Customer Satisfaction & Happy Meals

McDonald’s is making the blog twice this week. Why? Because law firm associates have a lot more to learn from Happy Meals than just a mood change.

McDonald’s is experiencing its first revenue and stock market bump in years. Why? It gives its customers the power to create.

The true (burger) king of the market has been very successful with the “Happy Meal.” McDonald’s was the first to massively market collectable prizes in kids meals and other meal deal options. The restaurant’s colorful menu offers a variety of food combinations that can be changed and created to match customer preference. Now, the restaurant chain is even allowing customers to mix and match meals—breakfast for dinner? Burger for breakfast? It’s all up to you.

Feeling hungry? Let’s take a bite out of our next business plan at Apple. The iMac, iPod, iPhone, iPad product suite and computer systems are all about customization in terms of specs, features, and even color. You create your own Macbook down to the exact amount of RAM, and can even engrave an epithet on your 64G iPod.

Finally, forget food; let’s go back to law firms. You try and you try and you try to appease your associates and clients. But there’s still frustration on both sides. In a mere one hundred and twenty words, Ben Young, author of The Best Ideas Are Free, can give you some satisfaction. Young claims better business management, ironically, means eliminating just that. Stop managing, and start creating.

Today in the business world, Young says, “We’re not creating physical things, new products, ideas, development. We’re maintaining, reporting… not making actual change.” To garner the super-sized success seen in the world’s most profitable companies, we must make the switch from managing to creating.

“Constantly creating, curating & connecting ideas is what you want to do, create your systems so they generate.”

3 Geeks And A Law Blog applied Young’s idea to Knowledge Management. Knowledge Management at a law firm generally indicates Document Management systems, such as the full-text search of documents, descriptive fields, classifications, and filter options.

The blog asks, “What are they actually doing? Are they simply siloing information in a way to retrieve bits and pieces? Or, are they creating interfaces that allows the customer (whether it is Attorneys, Marketing, Business Development, or Client Relations) to really create the information they want?”

Case management systems are also too sterile. For example, West Case Notebook and Timeline—typical of case analysis software—does not allow any changes to the number or name of sorting fields. If your client, witness, or expert has more than one address, email, or other piece of information attached to his name, attorneys have no recourse.

Additionally, of the software suite, only West Timeline synchs with MS Excel. Even then, information from West Timeline cannot be reverse imported into West Case Notebook. The point is: Knowledge Management and Document Management systems are still stagnant and limited. Within these systems, an attorney can rarely create. Only assemble.

There’s another hidden message in Young’s idea that begs the question, why can’t the client create, too? We discuss alternative fee arrangements a lot these days. However, these conversations focus on what the law firm can offer its clients. Instead, law firms should implement systems that allow the client, himself, to choose his fee arrangement. As when a customer logs into the Jeep website and chooses the chassis, color, and drive system of his vehicle, a client looking for a law firm should be able to shop around and create his ideal type of representation.

By selecting from a list of options—a certain fee arrangement, retainer agreement, or the number and billable hour of attorneys on the case—clients will become less frustrated with sizeable attorney fees. There will be no surprises. After all, the client created the contract.

Young concludes, “I triple double guarantee that anytime you start to get sick of something, it’s because you’ve stopped creating.”

Leave the stomach aches for fast food, and let your associates and your clients have creative control. You may be surprised at the increased satisfaction and retention levels of both.

How much detail should your firm share? Is sharing a profitable marketing practice, or will it cut into your firm’s bottom line? All your specific questions can be answered by a panel of experts at The Center for Competitive Management’s audio course:

Learn more at, “How to Use Pricing Metrics to Win and Keep Legal Clients,” on Wednesday, February 17, 2016 at 2:00 PM Eastern Standard Time.

Pricing is one of the most important factors in a client’s decision-making process when choosing a law firm. Failure to understand the clients’ often unspoken requirements perpetuates pricing shortcomings and lowers profitability.

  • During this information-packed webinar, you will learn:
  • Why pricing must be a part of your marketing strategy,
  • How to use the metrics you already have, and
  • Steps to align pricing strategy with your firm’s broader strategic objectives. 

-WB

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How “Perfect” Is Toyota’s New Hydrogen Fuel-cell Car? Why Law Firms Should Pay Attention

The perfect car. An Aston Martin Vanquish? Bentley Continental GTC? How about the Rolls-Royce Wraith?

Nope. Not even close—at least, that’s what theoretical physicist and best-selling author Dr. Michio Kaku thinks.

According to Kaku, Toyota has just developed the perfect car, but it’s not quite what you’d expect. It won’t break the bank or bring home any super models. However, it might just save the world.

At the Consumer Electronics Show on Monday, Toyota talked about its new hydrogen fuel cell vehicle that combines oxygen and hydrogen to create electricity, called the Toyota Mirai.

Priced at a mere $57,000 and available commercially later this year in California, the Mirai is unique in that it emits water, not exhaust or fumes, and still sports impressive power. The car runs for roughly 300 miles and has the ability to blow your mind and your hair back by going from 0-to-60 MPH in nine seconds.

Unlike hybrids or cars with electric batteries, hydrogen tanks can be refilled in three-to-five minutes. About the same time it takes to comb your wind-blown hair in the rear view mirror.

According to GeekWire, Kaku believes four requirements create the “perfect car.” Not only do all four characteristics describe the Mirai, but each of these attributes also describes perfect law firm management:

1. Mass Market

The perfect car uses a fuel source based on an element that’s the most plentiful in the universe: hydrogen.

“Contrast that to oil,” Kaku said, writes GeekWire. “Nations will kill to secure supplies of oil.”

Like transportation, law firms also provide life-altering services to society. Law firms today must be more mass market—that is to say, offer a variety of expertise with flexible service options.

In fact, the average client has 4 major practice needs and 5 minor, but measurable, needs. Yet, on average a primary provider delivers only 1.8 practices to a single client—meaning most law firms deliver one, and a handful service 2 practice areas.

So, what are law firms to do when so many cross-selling initiatives fail, or fall on deaf ears? Two words…origination credit.

Stop saying, “There are no opportunities with this client outside of my practice area,” or “We don’t handle that type of law.”

More than hydrogen, some might argue that lawyers are the most plentiful profession on earth. Which is why your firm must position themselves appropriately in this highly competitive marketplace. That means cross-selling services and adding practice areas.

Take C4CM’s audio course, “Law Firm Origination and Cross-Selling Credits: A Guide to Your Firm’s Future Success, looks at the key to successful cross-selling initiatives—how to turn selling into a team sport, and manage the origination that ensues,” to learn more about this innovative business practice.

2. Streamlined Operations

The perfect car has as few moving parts as possible.

“In a hydrogen fuel cell car, the engine has no moving parts, whatsoever,” Kaku said, according to GeekWire.

The same can be said for the perfect law firm. A stiff hierarchical system might be slowing you down. Assign casework to the most qualified team of lawyers, but don’t overstaff cases just to overbill clients.

The recent growth in in-house counsel means your firm must stand out and meet market demand—that demand calls for the end of traditional hierarchical billing models and more personalized attention at the partner-level—stop delegating work to inexperienced associates, knowing that top ranks will only give a brisk review.

The best way to ensure streamlined operations is implementing training programs for support staff and associates. You’ll have fewer moving parts and higher-quality delivery of services after strict and structured training schemes.

Because, in the end, sometimes the most effective teams are the smallest ones.

Need help? Take C4CM’s audio course, “Legal Support Staff: Revamp & Reassign Support Services for Max Profitability & Productivity.”

3. Idealist

The perfect car emits nothing but water.

“The word ‘smog’ is going to disappear from the dictionary because we are going to be entering a new age,” Kaku said, writes GeekWire.

Young associates are idealistic. This can be a positive quality. It’s important to mentor younger associates so they understand the practical implications of practicing law.

At the same time, embrace this idealism. Take some “unwinnable” cases because they take the “right” position. This will boost morale and serve as a reminder to the higher purpose of the legal profession.

Get some ideas for training programs with C4CM’s audio course, “Integrating Legal Mentoring With Law Practice Management.

4. Affordable

Finally, the perfect car is one that is friendly to the consumer, writes GeekWire.

“Usually hydrogen cars are priced at hundreds of thousands of dollars, way beyond the pocketbook of the average person,” Kaku said. “But this car, we’re talking about the neighborhood of $50,000. As mass production, competition, and economies of scale begin to kick in—and as governments begin to subsidize the creation of refueling stations — you’re going to see that cost drop even further.”

The perfect law firm also provides affordable prices. Affordable doesn’t mean redrawing the bottom line at your firm from black to red. It means flexibility.

The rise of alternative fee arrangements is not necessarily a “win” just for the consumer. It can be a “win” for your firm, as well. With proper structuring, you can increase your client base, client loyalty, and caseload while providing accessible prices.

Need help? Take C4CM’s audio course, “Structuring Sustainable and Profitable Alternative Fee Arrangements (AFAs).”

With these four requirements, Kaku is satisfied. But for firms, there’s one more bonus characteristic.

Toyota also announced, reports GeekWire, that it would make all of its 5,680 patents related to fuel cell technology royalty-free to anyone in an effort to drive more innovation. This means fuel cell technology can now be available to anybody who wants to build on it.

Every firm should practice a bit of probono work.

The combination of innovation and affordable services? Now that’s a model for cars (and firms) worth driving forward.

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Bad Food Combinations & Whetting Your Appetite With Law Firm Data

Advantageous Uses Of Info You Already Collect


Some combinations go together but can’t act like substitutes: like orange juice instead of milk in your cereal, or egg yolk instead of syrup on your pancakes.

When you do force matters to go together, they’re often hard to handle. Take, for example, the hybrid Zebroid, which looks like a horse with zebraesque stripes, but is a particularly difficult animal.

Humans, too, experience advantages and disadvantages to hybridization. At first, certain combinations of seemingly unrelated skills can create the ideal career option.

Take, for instance, the lawyer-CPA.

“I think an accounting background gives somebody the opportunity to take a more global approach to the representation of a business,” says Stephen Kantor, who is both a CPA and a partner at the law firm Samuels Yoelin Kantor Seymour & Spinrad LLP.

He explains, “I stick to the law, although a lot of what I do involves accounting.” From the perspective of an attorney, Kantor is confident that a CPA designation provides additional insight into the industry of law.

And, with new tax legislation up for debate in Congress, it’s time lawyers brush up on their tax code.

Others, however, work better as compliments than hybrids or substitutes, for example, the allusive data scientist-lawyer. Like a mythical unicorn, never has nature seen a naturally occurring IT Expert comma Esquire.

Yet, in today’s high-tech society, failing to use data appropriately is one of the worst mistakes a law firm can make.

Law firms don’t just collect clients or cases, they collect data. Data that can be the key to unlocking how your business works—and more importantly, succeeds. Whether it is “hours worked, hours billed, top clients, revenue and profit attributable to different representations, [law firms] often fail to use this data to help improve their business operations,” writes David Lat for the Above The Law blog.

Law firms can no longer rest on laurels and ignore the business side of their firm.

“Law firms are project managers now,” Craig Budner of K&L Gates said to Lat.

“Data has been underutilized in terms of predictive pricing. We can use data to figure out how to price our services.”

The problem usually lies in familiarity with how data can be properly collected and analyzed. Either you get an expert in tech or an expert in the law, never both.

Enter, the data scientist.

Data scientists are proficient in all things numbers and patterns. Not only can they tell you the average time to trial for you cases, they can also tell you which judges grant your firm the most motions, or when the best time of year is to woo new clients.

With the right tools and craftsman behind them, law firms can create alternative fee arrangements based on historical data about the real value of a case to a firm and accurate projections of how much time it would take to litigate it.

In addition, data can tell your firm tell what time of day your employees are most efficient and help your firm identify which employee incentives work best to boost profitability and productivity.

Pricing, fee arrangements, employee satisfaction, and policy efficacy, and many more, can be measured—and the data is at your fingertips! It’s time you find the right person to unlock it. The wrong combination can, unfortunately, waste even more time and money.

Consider The Center For Competitive Management (C4CM) for the job. Using their comprehensive audio conference, “Law Firm Data: Using Legal Project Management to Increase Profitability and Attract Clients,” your firm can more effectively:

  • Manage transactions,
  • Improve communication,
  • Manage costs, and
  • Meet client’s growing expectations

In just 75 minutes, expert faculty will delve into the essential ingredients of a well-implemented LPM program, including:

  • Best practices for aligning the interests of the firm with those of the client through LPM
  • How LPM works for cases billed hourly or as alternative fee arrangements
  • Best practices for goal setting, and resource allocation
  • Why LPM works, even in a legal landscape ripe with surprises
  • Real life examples of LPM success
  • The challenges of incorporating LPM and how to overcome them
  • Coding best practices and how to implement them

Don’t do everything in-house. Before you pour coffee into your cereal bowl, consider a more appropriate pairing: business consultant expertise on data management alongside your legal services.

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Lawyer App Of The Day: Smartphones, Cowboys, And Fee Payment Options

Collecting, managing, and dispensing of attorneys’ fees is a constant topic of discussion and source of contention. So what if a mobile app could make this process easier?

Typically the argument extolling the benefits of mobile apps surrounds social media, reference materials, firm exposure, or marketing. However, now there’s at least one direct financial benefit to downloading smartphone apps to your iPhone, BlackBerry, or Android.

 Consider the following situation. A client walks into your office. After a few minutes of conversation, you seal the deal, so to speak, and a new account begins with a handshake.

 Unfortunately, we don’t all do business in Texas, and sometimes a gentleman’s word makes for an insufficient retainer.

 Luckily, Google—frequently at the forefront of technological innovation—has a mobile app that can transfer monetary promises straight to your pocketbook. Leave it to 3 Geeks And A Law Blog to highlight the legal applications for near-field communications (NFC) technology. Such as, for example, this Google Wallet app.

 Google Wallet uses any devise with an NFC chip to make financial transactions, whether that be swiping your phone to purchase a vending machine soda or swiping your phone to hire a costly private investigator in your contentious divorce case. Either way, good news for lawyers.

 Despite its diversity, Google Wallet not our mobile app of the day. Instead, let’s refocus attention onto another tool vital for the litigious, fast-paced attorney: caffeine. This time, Starbucks has a solution for you.

 Welcome, Starbucks Mobile Payment app.

 With this free app, you can check your balance, reload your Starbucks card, and  view and track your transactions via your iPhone, iTouch, iPad, BlackBerry, or Android phone.

 And, sneaking out of the office for a cup of Joe was never easier. All you need is your phone (and this app) to pay at the counter. Lisa Salazar of 3 Geeks And A Law Blog summarizes its application perfectly:

“At first, I was all, ‘why in the world would I want to download an app for coffee?’

Well, I will tell you why:

  1. When I leave my office to grab my afternoon fix, I don’t have to carry my purse with my wallet that holds my credit card and Starbucks card.
  2. I can budget my coffee addiction allotment.
  3. The app collects and monitors my rewards—no more carrying around the infamously losable Starbucks Card.
  4. In the event I am traveling, it loads up the closest Starbucks for my drinking pleasure.
  5. I get to look cool when I whip out my phone to pay.”

In the legal world of power suits, power ties, and power plays… how can you say no to that?

 Even if Starbucks is not your morning addiction of choice, it still serves as a wake-up call for legal trends. Methods of payment are being revolutionized, mobile apps cannot be ignored, and, finally, law firms on the cutting edge of technology will also be the first ones securing clients (that is, unless you prefer to practice in the Wild West).

-WB

Of course, there are always liability issues when it comes to data-sharing and smartphones. Attend C4CM’s training course, “Smartphones and the Law: Avoiding Legal Liabilities in the Workplace” to ensure your policies and practices are air-tight.

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(I Can’t Get No) Satisfaction: How To Retain Attorneys and Clients By Creating, Not Managing

You try and you try and you try to appease your associates and clients. But there’s still frustration on both sides. In a mere one hundred and twenty words, Ben Young, author of The Best Ideas Are Free, can give you some satisfaction. Young claims better business management, ironically, means eliminating just that. Stop managing, and start creating.

What do mega-companies like Apple and McDonald’s have in common? Besides roughly $20 billion in gross revenue last year, each company also gives their customers the power to create. First, let’s take a look at Apple and the iMac, iPod, iPhone, iPad series. Apple’s product suite and computer systems are all about customization in terms of specs, features, and even color. You create your own Macbook down to the exact amount of RAM and can engrave an epithet on your 64G iPod.

Next, we have the true (burger) king of the “Happy Meal,” McDonald’s. McDonald’s was the first to massively market collectable prizes in kids meals and other meal deal options. The restaurant’s colorful menu offers a variety of food combinations that can be changed and created to match customer preference.

Today in the business world, Young says, “We’re not creating physical things, new products, ideas, development. We’re maintaining, reporting… not making actual change.” To garner the super-sized success seen in the world’s most profitable companies, we must make the switch from managing to creating.

“Constantly creating, curating & connecting ideas is what you want to do, create your systems so they generate.”

3 Geeks And A Law Blog applied Young’s idea to Knowledge Management. Knowledge Management at a law firm generally indicates Document Management systems, such as the full-text search of documents, descriptive fields, classifications, and filter options.

The blog asks, “What are they actually doing? Are they simply siloing information in a way to retrieve bits and pieces? Or, are they creating interfaces that allows the customer (whether it is Attorneys, Marketing, Business Development, or Client Relations) to really create the information they want?”

Case management systems are also too sterile. For example, West Case Notebook and Timeline—typical of case analysis software—does not allow any changes to the number or name of sorting fields. If your client, witness, or expert has more than one address, email, or other piece of information attached to his name, attorneys have no recourse.

Additionally, of the software suite, only West Timeline synchs with MS Excel. Even then, information from West Timeline cannot be reverse imported into West Case Notebook. The point is, Knowledge Management and Document Management systems are still stagnant and limited. Within these systems, an attorney can rarely create. Only assemble.

There’s another hidden message in Young’s idea that begs the question, why can’t the client create, too? We discuss alternative fee arrangements a lot these days. However, these conversations focus on what the law firm can offer its clients. Instead, law firms should implement systems that allow the client, himself, to choose his fee arrangement. As when a customer logs into the Jeep website and chooses the chassis, color, and drive system of his vehicle, a client looking for a law firm should be able to shop around and create his ideal type of representation.

By selecting from a list of options—a certain fee arrangement, retainer agreement, or the number and billable hour of attorneys on the case—clients will become less frustrated with sizeable attorney fees. There will be no surprises. After all, the client created the contract.

Young concludes, “I triple double guarantee that anytime you start to get sick of something, it’s because you’ve stopped creating.”

So they’re not sick of you, let your associates and your clients have creative control. You may be surprised at the increased satisfaction and retention levels of both.

-WB

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Firms Not Only Overbilling Client, but U.S. Treasury Too?

To keep from being overbilled, clients work on alternative fee arrangements with their law firm. However, who would have thought the U.S. government needed to negotiate similar arrangements with law firms for its bailout program.  

Reaching a compromise on billing with a disgruntled client is easy with retroactive discounts or future pro bono work. But appeasing the disgruntled American public during tax season, that may be a different story.  

According to a watchdog report, the U.S. Treasury Department paid out over $27 million to the law firms handling last years financial bailouts without requiring detailed billing information and invoices, and without questioning the incomplete records provided by attorneys. The Inspector General of The Troubled Asset Relief Program investigating the issues, announced on Thursday that the Treasury’s “current contracts and fee bill review practices create an unacceptable risk that Treasury, and therefore the American taxpayer, is overpaying for legal services.” The Troubled Asset Relief Program’s report also identified problems with lawyers’ “block billing” practices. Block billing allows firms to submit “vague and inadequate descriptions of work, and administrative charges—all of which should have been questioned before payment.”

In one of the more egregious examples of overbilling, the report found problems with two-thirds of bills submitted to the Treasury Department by the law firm Venable LLP, amounting to roughly $676,840. Additional problems included a mismatch in the number of hours spent in the same meeting by the different lawyers in attendance.  Acting Special Inspector General Christy Romero said in an interview that these problems, however, were not unique to Venable. “What we saw was that this wasn’t just an issue related to the Venable fee bill.” Romero emphasized that “This is an issue throughout the bills,” citing invoices from other contractors who oversaw the bailout program.

The lack of proper oversight in billing was, in part, due to the urgency with which the bailout needed to be handled. Romero explained, “We really felt like we needed to make a difference right now.” For the various businesses on the brink of bankruptcy due to the economic recession, this accelerated effort, certainly, was necessary and appreciated.   Still, faced with a federal deficit and growing bailout burdens on the U.S. Government, overbilling must now be addressed.

As a result, the Treasury is now implementing various solutions as proposed by The Trouble Asset Relief Program watchdog. This includes more detailed requirements about billing procedures and standardized internal guidelines for the staff reviewing those bills. The Treasury is also reviewing its previously paid bills—such as those to Venable—to ensure these payouts were appropriate.  

And on April 15, when the Internal Revenue Service is busy examining your financials, this comes as an important reminder to law firms to practice responsible billing, keep detailed records, and ensure invoices are reviewed internally with a keen eye.  

If you’re uncertain about the integrity of your billing practices, organize a firm-wide seminar once a year that serves to remind your associates about specific language for their timesheets as well as other billing policies. As Venable LLP now realizes, you’ll either pay now, or pay later.   Reed the Business Week article on this story here.

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