J U N E  2 0 0 9

The Scottish Local Authority Technology and Internet

Usage Survey 2009: does it foretell the future?

Five steps Inhouse can take to Transform Legal

from May 2009 featuring

An OFA you can’t refuse

summarising the issues; it can be used

as a template against which billing

systems can be constructed. The

various elements are the building

blocks for both clients and legal

providers enabling them to ascertain

the best route to an effective feeing

environment.  If feeing arrangements

leave one or indeed both sides of the

relationship feeling unhappy, they are

unlikely to either be durable or deliver

best value for either party. 

Both clients and lawyers are often

guilty of abusing their negotiating

position; perhaps the central, reason

for this is the billable hour.  As the New

York Times recently opined, why should lawyers be able to charge more

for doing things more slowly!  And indeed that is the crux of the matter;

systems based solely upon time recording rather than value will ultimately

leave the client feeling unhappy. 

I believe that by using the cube’s matrix of factors, clients and legal

providers can devise the most efficient set of arrangements between them.

I call these arrangements the Optimum Fee Arrangement (OFA).

Using Optimum Fee Arrangement (OFA) in practice.

So how do clients and their legal providers attain the OFA. In some ways

the OFA represents a three dimensional scorecard that allows both the

provider and client to consider in a transparent manner alternatives to time

based or piecework charges.

The core element is the work itself and the characteristics of the work  are

the starting point. This can lead to fundamental re-assessments - a recent

poll of in-house solicitors looked at how the downturn was affecting

relationships with external legal providers. Interestingly, a sizeable

percentage looked to take more work in-house.

But that is often more difficult than initially appears the case. However

using OFA identifies how the arrangements between legal provider and

client may be configured. It provides a “snapshot” which allows the client

and legal provider to negotiate fees on a multi-faceted basis that, by

avoiding unwanted or unnecessary work, reduces costs, work and

management; a “win win” situation. On the next page each element within

the cube is described in greater detail within our interactive guide.

A couple of pages cannot do full justice to the many different approaches

to alternative billing. At its heart will always be transparency which is very

much the current Zeitgeist.

A final word - it is often the case that the right feeing answer is not a fixed

fee, capped time or any other simplistic solution. Often the successful

arrangement will be a hybrid solution which is why the alternative billing

cube and OFA are such vital tools.

lpc are happy to provide advice on how alternative billing can be applied.

lpc also offer a half day seminar for clients which includes a presentation

and workshop - for details click here.

Jonathan Edwards

Remember the

“Escape Valve”

Generally Alternative

Billing Systems should

include some form of

Escape Valve to which

either Client or Legal

Provider can have

recourse in the event

of clearly unseen

events creating a

material unfairness in

the arrangements.

Such an Escape Valve

should include some

form of agreement

mechanism but not be

capable of frequent

use.

c  2009 LawPracticeConsultancy.com

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technology which can transform legal processes - how

do they relate to in-house departments?