Issue link: https://epubs.iltanet.org/i/83718
www.iltanet.org Volume discounts allow the client to be billed at reduced hourly rates in return for the client guaranteeing a certain volume of legal work. approach must include the development of a plan with the client, which gives the firm an opportunity to tailor the engagement to meet client needs. For example, clients must identify their strategy — win at all cost or settle quickly. They must define successes and goals. There is no silver bullet in pricing, as needs and wants and risk tolerances for one client may differ from that of another. Communication, client knowledge and legal expertise are the key components in crafting a successful AFA. Many clients demand AFAs, so Baker Donelson has developed a robust package of pricing and tracking tools to make it easy for attorneys to develop AFA pricing and to track the actual progress in any case. The firm established an AFA team of attorneys and certified public accountants and purchased a software application, Budget Manager, to price matters and track performance. The AFA team works with the attorneys to develop a pricing model and requires the use of the legal project management (LPM) system, BakerManage, to help accurately plan the work to be performed. Baker Donelson currently offers 15 pricing alternatives to the billable hour. The process, depending on complexity, can be done with same-day turnaround, but typically requires several days to adequately evaluate a transaction or a proposal for a completely new line of business. The evaluation process implements an LPM assessment by developing a plan with the client to 18 ILTA White Paper identify the scope of the project, building the task list required to efficiently meet the needs and objectives of the client, identifying how it will be staffed and setting a fee that also meets the financial objectives of the firm. Matters Best Suited for an AFA There is a broad range of value-based billing alternatives, and one size does not fit all. Factors that will impact the type of AFA applied are the type of case, the client's strategy, the firm's strategy, the timing of the case, the volume of work and the projected strategy of the adversary. Repetitive Work: Recurring or repetitive matters that allow for the collection of historical performance data are best suited for fixed-fee pricing. These types of matters include labor and employment litigation, intellectual property, product liability or healthcare litigation, mass real estate loan closings, or a portfolio of similar loan foreclosures or asset recovery matters. These matters have similar legal issues and procedural challenges; therefore, assumptions and risks are more predictable and support the creation of a more reliable fee estimate. Phased Budgeting: If the entire matter cannot be predicted with a level of certainty, the matter may be estimated by phases. This approach permits the firm and the client to enter into an AFA for preliminary phases of the case, with an agreement to re-evaluate later