The Lawyer's Guide to AFAs and Value Pricing

This report combines the expertise of some of the leading experts on law firm pricing to provide a definitive guide on AFAs and value fees.

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Description

Alternative fee arrangements are now a recognised aspect of legal work and many clients expect firms to offer them.
But many lawyers still lack the skills to negotiate and manage AFAs in a way that benefits both parties, and the risk of losing clients to firms skilled in this area increases as alternative fees becomes mainstream.
This report provides practical guidance to help lawyers adapt to client demands for AFAs and offers expert advice on negotiating and managing AFAs and value fees.

Specifically, this report tackles how to:

  • Determine, develop and implement coherent pricing strategies
  • Negotiate fees and deliver value to clients and in-house lawyers
  • Establish the value of services and how to commoditise qualities such as experience and reputation
  • Maintain client satisfaction and acceptance of fee arrangements.

The Lawyer's Guide to AFAs and Value Pricing covers topics including:

  • Understanding the key elements of pricing innovation
  • Overcoming resistance to change
  • Key considerations for pricing strategies
  • Designing objective - oriented fee arrangements
  • Implementing a rigorous rate-setting methodology
  • Linking project management to pricing strategies
  • The risks of alternative fees and how to avoid them
  • Examples of successful fee arrangements
  • And much more….

The Lawyer's Guide to AFAs and Value Pricing also features case studies from Pfizer, CMS Cameron McKenna, FMC Technologies, and Tyco International that highlight best practices in aligning your interests and the needs of your clients in order to create long-lasting, and successful, relationships.

Contents

Chapter 1: Rethinking pricing – Why fixed fees and value pricing are not pricing innovations

Chapter 2: The problems with AFAs run deeper than resistance to change

Chapter 3: Alternative fee arrangements – A profitability technique other than just more hours

Chapter 4: The importance of a pricing strategy

Chapter 5: Designing an objective-oriented fee arrangement

Chapter 6: Maintaining clients’ acceptance for the hourly rate

Chapter 7: How to be a smarter seller of value fees – FAQs

Chapter 8: Linking project management to pricing strategies

Chapter 9: Alternative fees – Risks and how to avoid them

Chapter 10: Preparing for fee negotiations

Chapter 11: Examples of successful appropriate fee arrangements

Chapter 12: Alternative fee arrangements

Chapter 13: Alternative fee arrangements – Can you ‘win-win’?

 

 

Check our Executive Summary and full table of contents here

Authors

Chris Howe
Chris Howe is a director of Raedbora Consulting. In his consulting role he advises legal clients on pricing and practice management (including restructuring and day-to-day performance improvement). He also advises buyers of legal services on legal procurement reviews. Chris’s clients include top 20 international law firms as well as FTSE 100 businesses. For ten years he was a director of a UK top 20 law firm where he was head of pricing and conducted innovative research into pricing with Cranfield School of Management. He also has 10 years’ consulting experience with PwC, Ernst & Young, and Deloitte. Chris is an international speaker and author on pricing and professional services
Julious P. Smith
Julious P. Smith, chairman emeritus and past CEO, Williams Mullen
Joel A Rose
Joel A. Rose is a Certified Management Consultant and president of Joel A. Rose & Associates, Inc., management consultants to the legal profession. The firm, national in scope, is headquartered in Cherry Hill, New Jersey. Joel received a B.S. from New York University and an M.B.A. from the Wharton Graduate School of Business, University of Pennsylvania. He has extensive experience consulting with private law firms and government agencies. Joel performs and directs consulting assignments in law xiv About the authors firm management and organization, strategic and financial planning, lawyer compensation, the feasibility of mergers and acquisitions and marketing of legal services. He has extensive experience planning and conducting retreats and special expertise resolving problems among and between lawyers. Joel’s articles on law office management and economics appear in the Philadelphia Legal Intelligencer, the Pennsylvania Law Weekly, the New Jersey Law Journal, the New York Law Journal, publications of the Association of Legal Administrators, and other state and local bar association journals. Joel wrote the chapter, “Identifying and Defining Criteria for Determining Partner Compensation”, in the publication, Compensation Design for Law Firms, and the chapter, “Components of a Well Conceived Partner Compensation System”, in the book Compensation Re-design for Law Firms, both published by The Ark as US pub Group. Joel is on the Board of Editors of Accounting and Financial Planning for Law Firms and Law Firm Partnership and Benefits Report. Joel is a member of the Law Practice Committee of the American Bar Association.
Toby Brown
Toby is the director of strategic pricing & analytics for Akin Gump. In this role Toby works with firm partners and clients in developing pricing arrangements and service delivery models that drive successful relationships. Prior to this, Toby served in similar roles for both Vinson & Elkins and Fulbright & Jaworski, where he also drove knowledge management (KM) initiatives and various marketing efforts. Before joining Fulbright, Toby served as the communications director for the Utah State Bar. In his tenure with the Bar, he also served as the CLE, access to justice and programs director.Toby presents nationally on legal pricing, marketing, technology, and law firm management for associations, law firms, legal departments, law schools, and paralegal programs. He has also published numerous articles on these topics. Toby has served on a number of legal services boards, bar association task forces, and legal market organizations. He received the Peer Excellence Award, the President’s Award, and the Anne Charles Award from the National Association of Bar Executives. Toby maintains the ABA award-winning 3 Geeks and a Law Blog along with two colleagues, and can be found on LinkedIn.  
Vincent Cordo, Jr
Vince serves as the global director of client value for Reed Smith. He leads the firm strategy related to the evaluation and implementation of value pricing, alternative fee arrangements (AFAs) and matter management. He is responsible for organizing efficient and capable teams of professionals to align project management and process improvement with business drivers, assigning resources, tools, and tactics to satisfy business and client needs. As the leader of Reed Smith’s project management office (PMO), Vince oversees the strategy and application of legal project management, while working to drive efforts to define and deliver maximum value to clients. His team includes financial analysts and project managers who prepare and analyze various pricing alternatives, and who assist with matter management firmwide. Throughout his career and prior to joining Reed Smith, Vince has held the positions of business development director, business consultant, global director, project manager, and engineer. In these roles, Vince worked with venture capital firms, assisting with multiple public offerings, and he also took the lead on a number of diverse business, information technology, and project management initiatives for a wide range of clients. Vince is a recognized leader and speaker in the fields of AFAs, project management, business process improvement, knowledge management, service delivery, and a variety of related disciplines. He is a Six Sigma Black Belt, is a member of the Society for Information Management, ILTA, the AFA Forum, Six Sigma and Project Management Institute, and helped form the legal industry Pricing Practice Innovation Project Management Group (P3). Vince is active on Twitter and can be found on LinkedIn.
Steven A Lauer
Steven A Lauer is principal of Lauer & Associates and consults with law departments and law firms on the value of legal services.
Michael Roch
Co-founder & CEO, KermaPartners
Patrick J Lamb
Patrick Lamb is founding partner of ElevateNext Law, LLP, and vice president of Elevate Services, Inc. Pat and his long-time partner Nicole Auerbach founded ElevateNext Law in 2018 to provide legal services in alignment with Elevate Services, a global law company. The unique arrangement armed ElevateNext with global capabilities and a wide array of additional tools to utilize in crafting solutions for its customers. ElevateNext allows Elevate to offer its customers services that include practice of law areas it previously had to defer to other law firms. Pat has been a long-time innovator in the delivery of legal services. Having launched Valorem Law Group in January 2008, Pat became the leading voice for alternative fee structures in all types of legal matters, including complex business litigation. Valorem has been recognized by clients and others as one of the leading AFA firms in the country. Pat pioneered the essential relationship between alternative fees and client service, and has long argued that alternative fees are but one of several essential tools that should be deployed to serve clients. Pat has been recognized four times as a BTI Consulting Client Service All-Star MVP, and Valorem has been named six times a member of the BTI Client Service A-Team. Pat remains an active practicing lawyer but now is devoting considerable attention to designing solutions for customer issues that help avoid litigation and disputes. He has tried numerous cases around the country and draws on his long experience as a litigator and trial lawyer to design effective solutions. He is in great demand as a speaker, at both public and private events. He is a prolific writer, including his periodic column for the ABA Journal’s award-winning New Normal section and his blog, In Search of Perfect Client Service, www.patrickjlamb.com. His latest book, Alternative Fee Arrangements for Litigators and their Clients, was published by the ABA in 2014. He can be found on Twitter at @ElevateLamb.
Barbara J Boake
Partner, McCarthy Tétrault LLP.
Rick A Kathuria
National director, projectmanagement office and legal logistics, Gowling Lafleur Henderson LLP
Sally Dyson
Sally Dyson is the founder and director of Firm Sense Limited, a consultancy specialising in providing client listening services and client relationship management advice to law firms. Sally qualified as a solicitor and practised at Slaughter and May. She then worked as an in-house lawyer for nearly a decade before moving on from the pursuit of law to establish Firm Sense. Sally combines expertise in client listening with an in-depth understanding of the legal market to advise law firms on aligning organisational practices and individual behaviour with specific client needs in order to improve client retention, win business, and improve profitability. Sally is an Affiliate Member of, and is regulated by, the Market Research Society. In the context of optimising client relationships, she has developed particular knowledge on the topic of law firm fees and is the author of an Ark report entitled Budgeting and Negotiating Fees with Clients: A Lawyer’s Guide. Sally is also a regular speaker at public conferences and private workshops and is a contributor to professional journals. Sally can be contacted by email or at Firm Sense Limited. For more information please visit their website.
Ori Wiener
Co-founder, Møller PSF Group Cambridge
David H Freeman
David H Freeman, JD, a former lawyer and now CEO of the David Freeman Consulting Group, has helped thousands of managing partners, group and department leaders, partners, counsel, and associates become better leaders and rainmakers in hundreds of law firms world-wide. For nearly two decades, he has worked with over one-third of the AmLaw 200, and in 2013, for the second consecutive year, he was recognized as the best law firm business development and coaching service provider in a National Law Journal survey. He is an internationally acclaimed speaker who presents at law firm retreats, law firm networks, international, national, and regional conferences, LMA and ALA chapter meetings, bar association meetings, and law schools.  David’s main areas of practice include leadership training and coaching; business development training and coaching; accelerated cross-selling; client service training and planning; retreat design, facilitation, and speaking; and business development culture assessments. He was Co-Chair of the Legal Marketing Association’s 2010 Annual Conference, he has written a unique book for law firm leaders called Weekly Reminders for Revenue-Focused Leaders, and he is a co-author of Law Firm Marketing Leaders: Tips from a Collection of Experts. He also wrote an on-going leadership column for American Lawyer Media’s newsletter, Marketing the Law Firm, and he has authored many other articles on the revenue-related aspects of management, leadership, service, strategy, and business development for most of the major legal publications. David also produces practical video tips focused on leadership and business development, he has developed a DVD-based personal rainmaking system for lawyers called CMOplaybook®, and he created a business development culture assessment tool for law firms called Culture Xray®. David can be reached via email at the consulting group.

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