2010 – The Year of Understanding AFAs

For Alternative Fee Arrangements (AFAs) 2009 was a year of awareness. Although there are some clients and firms more involved in utilizing AFAs, the vast majority of lawyers are just getting their toes wet on this issue. All of the talk and debate has been over whether firms should use AFAs. At 3 Geeks we believe a general consensus is being reached on the fact that AFAs are here to stay and will only increase in use and application. Which brings us to 2010. Now that we’ve all agreed that AFAs have value, we need to understand where and how they fit into the business of law. Specifically we need to figure out: 1) Which types of AFAs are best applied to varies types of matters and cases, and 2) How do we re-structure and re-staff to make these engagements efficient (for the client) and profitable (for the law firm). For instance, at the beginning of a litigation there are numerous unknown variables. Fixed fees don’t make sense for a client or a firm in this situation. All of these unknowns create high risk. For clients there is a risk of paying too much. For firms, the risk is not charging enough. So clients and law firms will need to sit down and find or create AFAs that fit a given situation. It will be these conversations that bring understanding to the table. 2010 will be the year the legal industry does the heavy lifting on AFAs. We can move past the debate and get to work on developing pricing models that make sense for both sides. This will be the year we begin to understand AFAs and make them useful tools for clients and law firms.

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