Bringing Value to the Client Relationship

Law firms can’t avoid adapting to the changing marketplace. One which has lead the thinking and development on alternative fees has been Drinker Biddle of Philadelphia.

John Byrne, CMO, and Kristin Sudholz, Chief Value Officer, of Drinker Biddle & Reath spoke to the audience of Masterminds at the 2011 Legal Marketing Annual Conference (#LMA11) in Orlando, FL. They point out that the one determinant condition of AFAs that make them work for law firms is scope. The dialog with clients about their goals and views of value for specific ordinary course of business or commodity work is the way to start.

Law firms need to have a resource within a law firm who can work through the AFA scenarios prior to them eing introduced to a client. Data is important, but a financial team who is willing to play ball is key. There has to be a management editct to bring any and all proposals through the review process where these team members get a chance to apply their analysis.

Fee Models other than Hourly:

• fixed fees
• capped fees
• retainers
• milestone formula
• tax-based billing
• blended fees
• volume discounts
• secondments
• value billing

Analyisis after billing is crucial to gauge whether the engagement satisfied the needs of the firm and clients. There will be some where losses occur on either side, the law firm will over work the matter or the clients will over pay. There is more non-billable work among lawyers to get the return. And you probably will never get rid of “shadow billing” as a way to see if the engagement is “making money.”