Peer to Peer Magazine

WWW.ILTANET.ORG 63 TECHNOLOGY When functioning under an AFA, efficiency is king. You might not be billing by the hour, but time is still money. Firms that manage workflows efficiently reap the greatest rewards from AFAs. Two areas in which you can improve efficiency using technology, thereby increasing your revenues, are client communications and automated time-tracking. Client Communications: Communicating with clients can be a struggle when their technological capabilities differ from yours. Time lost in converting and tracking documents and in simple email management can completely derail the profitability of an AFA, because you cannot bill for the time it takes to unravel the mess. The solution can be as easy as utilizing two technological solutions: 1. Client Portals: Many firms host portals for their clients and track everything sent through the portal as part of a matter. However, not every firm uses their portals effectively. If various attorneys or staff members are working around a client portal rather than through it, you need to offer training to get everyone on board. In addition, your client portal should be tied into your document management system and an automated time-tracking system. 2. Shared Work Platforms: When a client does not work with the same operating systems and platforms as their firm, it can cause delays as everyone struggles to convert documents, pick conferencing tools or even host online work sessions. Why not give your clients the gift of an Office 365 account and perhaps invest a little time to train them to use it? The investment will pay off through increased work speed on both sides. About the Author Doug Striker is the CEO of Savvy Training & Consulting, a leading provider of legal software training solutions. As a former COO of a prominent law firm, he specializes in helping firms acquire needed software platforms, training staff for maximum workflow efficiency and enhancing continuity and bottom-line results. Contact Doug at doug@savvytraining.com. Possible AFA Structures WilmerHale, a leader in alternative fee agreements, posted this list of possible AFAs on its website: FIXED FEE: Under a fixed-fee arrangement, the client pays an agreed-upon sum of money for an agreed-upon amount of work, and the firm assumes the risk of overruns. If the hours billed to the engagement are less than expected, the firm benefits. Shared savings can be negotiated into the arrangement. Retainers are similar to fixed fees, except the firm receives the money upfront. PHASED FEE: In a phased-fee arrangement, the law firm and the client agree upon fees for discrete phases of work. This arrangement works well for litigation and transactional matters with defined segments that can be estimated and scope of work well-delineated. COLLARED FEE: An agreed-upon fee is established with a collar, typically 10 percent. Should the value of fees end up above or below the collar, the law firm and client agree on a percentage of the overage/underage to be credited or paid. The percentage is normally 50 percent. The purpose of this type of deal is to limit risk to both the client and the law firm. VALUE FEE: The law firm might be paid a fraction of its fee under an hourly arrangement, and an additional amount if the result exceeds the agreed-upon criteria. The additional amount might be an agreed-upon sum or percentage of the recovery. The law firm and client share the upside of a favorable outcome. The law firm is also negatively affected by an unfavorable outcome, but does not assume the entire risk. HOLDBACK: Under a holdback fee arrangement, the client withholds an agreed-upon amount or percentage of the fee until an agreed-upon milestone or result is achieved, or until completion of the engagement. BLENDED RATE: A blended rate is an agreed-upon hourly rate that applies to all lawyers working on a matter. It can be effective for highly leveraged engagements where less expensive lawyers can be utilized. CONTINGENT FEE: Under a contingent fee arrangement, the law firm gets paid only if it achieves a financial recovery or other result for the client, typically a percentage of the total recovery. When a contingency fee is utilized, the law firm assumes the risk of a cost overrun and also of a bad outcome.

• Cover