Last week, I completed the final interview in our survey of how AmLaw 100 firms are using alternative fees, and what they expect in the future. I talked to 9 chairmen and managing partners, 16 executives including CEOs, CFOs, and CMOs, and 22 senior partners, many of whom headed their firm’s alternative fee committee. Thirty seven firms participated:
Alston & Bird
Baker Hostetler
Blank Rome
Bryan Cave
Chadbourne & Parke
Dickstein Shapiro
DLA Piper
Dorsey
Drinker Biddle
Duane Morris
Foley & Lardner
Goodwin Procter
Greenberg Traurig
Haynes and Boone
Jones Day
Mayer Brown
McDermott Will & Emery
McGuireWoods
Morgan Lewis
Nixon Peabody
O'Melveny & Meyers
Orrick
Patton Boggs
Pepper Hamilton
Perkins Coie
Pillsbury
Proskauer Rose
Reed Smith
Seyfarth
Sheppard Mullin
Shook, Hardy & Bacon
Sonnenschein
Steptoe & Johnson
Sutherland
WilmerHale
Womble Carlyle
To me, the most amazing thing about the survey is the simple fact that so many high-level decision-makers from multi-million and multi-billion dollar firms participated in this research. All will receive a free copy of our report, but it wasn’t because they wanted to save $395 that they took the time. They took the time because they feel strongly about these issues and saw the survey as a way to advance their firm’s initiatives in this area.
I recently discussed some of my initial findings with an AmLaw 100 CMO who had not participated in the survey. He skeptically asked whether a self-selected group of volunteers could provide good data about general trends. As a recovering Ph.D., I said the sample may or may not be “good” in the eyes of the National Science Foundation, but there can be absolutely no question that this is the best data that is currently available, based on the richness of the interviews, the number of firms that participated, and the seniority of the respondents.
As mentioned in my August progress report, participants had complete editorial control over what was released. All quotes will be anonymous, and no statement will be linked to any particular firm.
Lawyers are accustomed to protecting clients’ confidentiality and sharing little information. This discretion and even secretiveness is at the heart of law firm culture, and often carries over when firms are asked about how they conduct business.
Our survey provided a platform that made it easy for firm leaders to communicate openly with clients and with colleagues about this important topic, without being quoted by name. And it worked. You can see that not just in the seniority of the people that we were able to interview, but also in the frankness of what they said. A sample interview from one chairman will appear in this blog next week.
We are just starting to analyze the responses, but this survey has already proved something that I have suspected for a long time: there is an enormous amount of alternative fee progress and innovation going on at AmLaw 100 firms, beneath the radar.
If I were to rank firms on their alternative fee innovation based on their replies to this survey, the list would look very, very different from the lists I’ve seen based on published articles.
But I won’t be publishing any lists comparing firms, because that wasn’t the purpose of the research, and all interviews were confidential. The report I publish in December will describe a wide range of opinions about how alternative fees are being used now, and how they will be used in the future. The table of contents is likely to evolve as the data is analyzed. Here is our working draft:
Executive summary
About the survey
Background and goals
Defining alternative fees
How participants were selected and interviewed
Who participated?
Alternative fee use
An idea whose time has come?
Historical perspective
Differences between practice groups
Estimating the percent of AmLaw 100 revenue from alternative fees
Measuring the percent of each firm’s revenue from alternative fees
Bidding strategies
Sharing risk
The aggressive approach
The conservative approach
How firms manage the bidding process
The most common types of alternative fees
When to use alternative fees
Differences of opinion about shadow billing
Risk collars
Portfolio fixed fees
Fixed fee menus
Fixed fees for a single engagement
Retainers
Holdbacks and success fees
Full contingency arrangements
Fee caps
What do clients want?
Do most GCs want true alternatives or hourly discounts?
Lower cost
Predictability
Reduced time
Other goals
Advice to in-house counsel
How to improve RFPs
The need for information
The need for partnership
The need for trust
What else can General Counsel do?
Advice to law firms
Benefits of alternative fees
Marketing
Lowering cost
Defining scope
Increasing efficiency
Maintaining quality
Maximizing profitability
The need for matter management
The future
Differences of opinion about the coming change
Increasing differentiation between firms
Recommendations
For in-house counsel
For law firms
If you would like to pre-order a copy of the final report today, we will send you the survey directly from the printer, the day it is released in December. We will also send you a PDF preview of key conclusions in October. The total cost for the final report and the PDF preview is $395. For more details and an order form, see the alternative fees section of our web page or Download LegalBizDevSurveySummaryZ.
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