More Firms Try Alternative Fees
The billable hour is not likely to die anytime soon, although more law firms are exploring alternative billing arrangements.
In the most common arrangements, firms bill fixed fees for large amounts of work, or bill at a reduced rate in exchange for a bonus in a winning case. That can sometimes mean less money for the law firm, the Recorder reports.
“It takes a real serious effort to fashion [alternative fees], and they’re not always mutually beneficial,” David Balabanian, chair of Bingham McCutchen’s litigation practice, told the legal newspaper.
Jeffrey Carr, general counsel at FMC Technologies, said he has been told that alternative billing is like teenage sex. “There are more people talking about it than doing it,” he said, “and those that are doing it don’t know what they’re doing.”
Still, some big-name firms are offering alternative fees, the Recorder says. Howrey’s Northern California managing partner Henry Bunsow said the firm uses alternative billing in about 10 percent of its cases.
Besides Howrey and Bingham McCutchen, firms offering alternative fee deals include Morrison & Foerster; Orrick Herrington & Sutcliffe; Cooley Godward Kronish; and Fish & Richardson.
Bunsow recounted one alternative arrangement with a big payoff. Howrey received a $1 million bonus for settling a patent infringement case before trial at a low cost to its client, a Chinese battery maker.
“We have a lot of confidence in our abilities—we’re happy to put that reputation on the line,” he said.