By now, a lawyer would have to be living on Mars to have not encountered a client request for an alternative fees arrangement (any fee agreement other than straight billable hours at published or discounted rates). The Association of Corporate Counsel calls alternative fees “value-based” fees, but whatever the nomenclature, let’s look at the fundamentals of making these fees work.

Most importantly, alternative fee arrangements need to be valuable to both sides of the engagement. The outside lawyers need to make a profit; the clients want fees that are equitable. The formula for successful use of alternative fees is the easy-to-remember acronym of ATM: Assess, Talk, Manage: