Hourly billing has been the primary mode of invoicing clients for more than 50 years. During that time, attorney behavior and expectations, performance evaluations, compensation schemes, marketing materials, financial analysis, accounting and a slew of supporting systems have been aligned to make the billable hour work. Generally, it worked well. But because of a myriad of factors — including abrupt swings in the economy, the evolution of clients’ expectations and advances in technology — law firms now are being asked to deliver work under different billing mechanisms, most commonly known as alternative fee arrangements. AFAs help clients budget, and help them challenge law firms to deliver legal services in a more efficient, effective way. Because of the high demand, firms are moving to respond. However, doing so hasn’t been without a fair amount of growing pain.
To be clear — delivering AFAs isn’t just about billing. It takes much more than a different billing system to properly service this kind of work. This change has far-reaching implications that permeate the entire law firm. That may sound a bit dramatic — but it’s true. No matter your position within a firm, properly servicing AFAs requires a change of thinking — and behavior. But there’s a silver lining: There are untapped opportunities to become more closely aligned with the firm’s business agenda, and potentially elevate your own status within the firm.
