As Companies Start To Feel the Economic Downturn, Law Firms Are Beginning To Offer Alternative Billing Arrangements to Their Clients
Law.com recently published the article called “Billing Gets Creative in Souring Economy”. Julie Kay, a staff reporter for The National Law Journal, discusses how the current economic downturn has led many law firms to start offering their clients creative and alternative billing methods for the legal services they provide during these difficult economic times.
Here is an excerpt from her article detailing some of the alternative billing methods law firms and attorneys are turning to:
Those arrangements include fee caps, blended rates and monthly retainers.
"We always feel pressure to keep legal fees as low as possible," said Craig Prusher, Burger King's vice president and assistant general counsel. "After all, the legal department is never a profit center."
And except for some New York and Los Angeles firms that have refused to deviate from or discount their standard billable hour rates of $700 or more, Burger King has had great success with law firms willing to be creative in their billing.
The company is not alone.
What has been a slow and steady call by many corporations, in-house counsel and legal think tanks to law firms to abandon the billable hour in favor of alternative fee arrangements has turned into a loud drumbeat in the past year, as the economy heads south.
Many law firms are now offering clients an array of alternative fee arrangements, including flat fees, success fees, contingency fees and retainers. Even some large law firms, which have clung to the billable hour, are bowing to pressure from economically challenged clients and agreeing to other types of fees.