Judd Law Group uses alternative fee arrangements (AFAs) to provide clients predictable costs and align the cost and value of the legal services we provide. Our focus on the fundamentals of effective management – communication; legal strategy; planning and monitoring timelines, tasks and budgets; and allocating resources only to actions that have impact – allows Judd Law Group to consider a wide variety of creative billing arrangements.
We have found that AFAs work best when the work to be done is well-defined, but we are always willing to consider AFAs for most any matter. We regularly use AFAs like the ones summarized below in Transaction and Litigation engagements. AFAs may apply to the life of the matter, to a phase of a particular matter, or monthly (based on an annual fixed amount).
Fixed Fee: The client pays an agreed-upon sum for an agreed-upon amount of work; Judd Law Group assumes the risk of overruns. If the hours billed to the engagement are less than expected, the firm benefits. Shared savings can be negotiated into a fixed-fee arrangement.
Phased Fee: The firm and the client agree upon the amount of fees to be paid for discrete phases of the work. A phased-fee arrangement can work well for either Litigation or Transaction matters, if precise segments can be estimated and the work is well-defined.
Collared Fee: The firm and the client agree upon a fee with a “collar” – typically 10 or 15%. If the total fees exceed or fall below the collar, the firm or the client will either be credited or charged part – normally 50% – of the variance. Collared-fee arrangements allow both client and firm to limit their respective risk.
Value Fee: The firm bills for legal services at a discounted hourly rate and receives an additional “bonus” payment if the result meets or exceeds specific criteria. The bonus is usually an agreed-upon sum or percentage of the result. Value-fee arrangements allow the firm to share the benefit of a favorable outcome and assume some risk for less favorable results.
Contingent Fee: The firm is paid only if it achieves a financial recovery or other result for the client, typically, a percentage of the total recovery. Our contingent-fee arrangements generally require the client to pay all litigation costs (e.g., filing fees, court reporters, copying, service of process, etc.) without regard to the result.