Our firm is always willing to work with clients to develop an “alternative fee” arrangement, meaning an alternative to the standard hourly rate. Alternative fee arrangements can cover all or part of the client’s relationship with the firm. These arrangements may provide clients with greater certainty with regard to fees and attempt to balance the various risk and reward factors involved in a particular matter or task. The client is responsible for out-of-pocket costs under each of the following arrangements.
Alternative fee arrangements include the following:
Fixed Fees: This arrangement provides the client with a set price for a particular legal service. Often these arrangements are made for discrete and limited projects such as entity formation, estate planning, sexual harassment training, or certain portions of a litigation matter.
Contingency Fees: Under this arrangement, which applies when the firm is attempting to collect a sum for our client, the fee is equivalent to an agreed upon percentage of the amount recovered when and if it is recovered.
Hedge Fees: This arrangement is employed for large collection matters and provides for a blend of contingency fee and a non-refundable initial payment that caps a client’s exposure. The client makes the initial payment and can receive a refund of the payment once monies are collected. Usually the greater the initial hedge payment, the lower the contingency fee.
Blended Fees: Blended fee arrangements are a combination of a contingency fee and a reduced hourly fee.
Success Fees: Some clients’ budget a particular amount for a matter, and in the event we are able to achieve the result for less than the budgeted amount the firm shares the savings with the client. This is sometimes referred to as a “reverse contingency.”
Retainer Arrangements: Clients pay an agreed-upon monthly retainer to cover all or part of their legal services. Typically the retainer covers only routine matters (ordinary course of business) and has carve-outs for unusual transactions (e.g. buying or selling a business, financing, etc.) or non-routine litigation. The monthly retainer amount is periodically (usually annually) moved higher or lower depending on the amount of services required.