Are Alternative Fees Fizzling? Bloggers Offer Contrarian View
The firestorm over alternative fees has produced more smoke than fire, according to a Canadian legal consultant.
Writing at his blog Rants & Raves, consultant Patrick McKenna recalls his own unsuccessful attempt to interest general counsel in alternative fees while representing an AmLaw-listed, regional law firm of more than 500 lawyers. McKenna says he contacted more than 35 GCs of Fortune 500 companies to discuss how the firm could deliver savings of 25 to 40 percent, and possibly more. “I completely struck out!” he writes. “No bunts, no hits, not even a sniff of interest.” He later heard from a couple GCs who told him change comes slowly.
McKenna also notes a Legal Week column that says the financial crisis has produced only “a modest uptick” in alternative billing. The column argues that clients “are not only generally failing to enforce change, they are, if anything, more conservative than the law firms.”
Larry Bodine, a former editor and publisher of the ABA Journal, offers more evidence at his LawMarketing Blog. In one survey of 140 in-house counsel, almost half reported that they spend no more than 10 percent of their budget for outside counsel on alternative fees. Another study found that nearly 88 percent of practitioners offer some sort of alternative fees, but outside demand for such arrangements is “peaking selectively.”
