The LegalBizDev Survey

As far as buzz words go, 'alternative billing' is a phrase that is close to the point where the words themselves start to lose real meaning.

Because 'alternative billing' as a concept in the abstract is pointless without acknowledging the vast history of the billable hour, from which any 'alternative' billing must emerge.

Which is why LegalBizDev's recent survey may be an important tool. Their survey is a collection of in-depth interviews with chairmen, senior partners and C-level executives at 37 of the largest law firms in the US about their past use and future plans for alternative fees.

As we discussed earlier, tossing around the term 'alternative billing' is worth little without including real world tools and methods to craft, implement, and track alternative fee structures.

And the LegalBizDev survey is consistent with this opinion, setting out to identify the underlying fundamentals that will make alternative fee structures work for both sides.

Highlights from the survey include:

• Last year, the 100 largest law firms in the US generated approximately $7 billion in revenue from alternative fee arrangements.

• Every single participant said that the use of alternative fees will go up, but there were dramatic disagreements about how much.

• When different firms say they are offering alternative fees, they may in fact have radically different business models and offer totally different types of deals.

• There are nine types of billing arrangements that are most commonly used: risk collars, fee caps, fixed fees for a single engagement, fixed fee menus, portfolio fixed fees, retainers, success fees, holdbacks and full contingencies. These terms are defined in the complete report, along with advice on when and how to use each fee structure.

Positive response to the survey includes:

• “Momentum is building in the marketplace for new ways of charging for legal services. Jim Hassett's new survey summarizes valuable insights from AmLaw 100 decision makers about how the market is changing and what will and will not work in the future.” – Harry Trueheart, Chairman, Nixon Peabody

• “The billable hour’s market share has peaked.. [and] alternative fees are here to stay... This type of sea change in law firms’ fundamental revenue model is a once in a career event.... [This book is an] impressive contribution to defining the 'state of the art' in the land of alternative billing.” – From the Foreword by Bruce MacEwen, Adam Smith Esq.

• “Morgan Lewis is a huge proponent of alternative fee arrangements for both litigation and transactional matters. In the LegalBizDev Survey, senior partners and executives from some of the largest firms in the country talk frankly about what does and does not work. This groundbreaking work provides indispensable guidance that will help clients to understand what their options are and, hopefully, increase their receptivity to breaking away from the billable hour with alternative paradigms and new ways of doing business.” – Richard G. Rosenblatt, Operations Partner for the Labor & Employment Group, Morgan Lewis

The survey is not inexpensive, but it looks like worthwhile reading.