Alternative fee arrangements, or “AFAs”, are quickly becoming the new norm in law firm billing. Their increased popularity is the subject of a recent whitepaper, Innovations and Trends in Law Firm Billing, by Mitratech’s Vice President of Lawtrac, Frank Orzo. As legal departments’ relationships with law firms continue to change based on external factors, many law departments are making AFAs their preferred billing method. This is the case for Kim Townsan at United Technologies Corporation, who states that AFAs are “the rule, not the exception.”
While AFAs were once consigned to litigation and avoided by law firms, they are increasingly used in various circumstances and widely accepted by forward-thinking firms. AFAs can be mutually beneficial for both legal departments and law firms, and both parties continue to make the shift to this form of payment. When firms are willing to try new forms of billing, it shows that they value their relationship with the client over the traditional billable hour – something that legal departments value in our current climate.
In case AFAs are not something your legal department has fully embraced thus far, you can find a detailed list of AFA types and examples of their use in Orzo’s whitepaper. Be sure to read it in full to learn more about AFAs, their benefits, and how they can be implemented here.