Saul Ewing understands that our clients need cost predictability. Sometimes this can be achieved through competitive rate structures and smart staffing. In other cases, we employ alternative fee models that permit clients to budget and manage legal expenses with a higher degree of certainty. These include negotiated fees, blended fees, fixed fees (by phase or entire case), retainer-based, and “cap and floor” fixed-fee arrangements (e.g., partial refund payable to the client when the value of work falls below an agreed floor, or an additional, discounted fee payable when the value of work exceeds an agreed cap). We have also used “success fees” where a holdback against negotiated fees is paid to the firm upon reaching a pre-defined result (e.g., 10 percent holdback paid if we obtain a specific result).
Below are some examples of special fee arrangements we have utilized with clients:
- To provide predictability to a global private equity firm, we committed to handle new leases and lease modifications for existing tenants at the client’s industrial/warehouse/office properties on a flat-fee basis. The flat-fee “menu” included five prices depending on the size of premises covered by the lease.
- For an energy company interested in acquiring an electric generating facility, we agreed to charge 75 percent of our standard billing rates. If the client closed on the acquisition, it would pay the firm a success fee resulting in the firm being compensated at 105 percent of our standard billing rates. If the client did not close on the acquisition, then the firm’s compensation would be finalized at 75 percent of standard billing rates. This fee arrangement was designed to reflect the client’s prioritization of a timely closing.
- A rapidly growing healthy fast-food restaurant had a high volume of lease work. We settled on a fixed fee per lease with a collar. The scope included preparation, negotiation and finalization of the branded restaurant lease. If the total cost per lease exceeded the agreed upon fee by 15 percent or more, the client would pay 50 percent of the variance. If the total cost fell 15 percent below the agreed upon fee, the client would be credited with 50 percent of the variance.
- A global pharmaceutical company wanted the certainty of a line item in its budget for one-off employment law questions. We arranged a fixed-fee “hotline” covering calls from in-house counsel and human resources personnel on day-to-day employment law questions.
- For a large research university with a gap in capacity, we arranged a monthly fixed-fee secondment where one of our attorneys worked a set amount of hours per month “in house” for the client.
Our formalized alternative fee arrangement programs include: