Alternative fee arrangements are “in” again. Some say they are a temporary trend and the billable hour will reign supreme once the economy improves. It is more likely alternative billing is here to stay for two reasons. First, alternative fee arrangements never disappeared after they last were in vogue in the 1990s, but they did stop getting press because the biggest law firms were grabbing headlines by commanding top dollar for hourly billing. Second, today’s in-house counsel find a lot to like about alternative fee arrangements and will be reluctant to abandon them in the future.
Trust, fairness and transparency — if a fee proposal has these three features, it is likely to succeed. The attorney-client relationship requires a foundation built on trust. This is as true in the billing arena as it is when it comes to devising strategy regarding the merits of a case. Moreover, in any complex and ongoing business relationship, both sides must feel the deal is fair, or the relationship will not last. The key to building a fair and trusting relationship is transparency. A transparent billing relationship allows you and your client to see how fees are generated and risks are shared. In this scenario, neither party is likely to regret making the deal.
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