《Alternative Fee Arrangements》.pptVIP

Alternative Fee Arrangements ACC CLE Program by Alston Bird LLP Dallas – February 19, 2009 Fort Worth – February 26, 2009 Panel Dallas Panelists Michael Colvin, Highland Capital Management Stanton P. Eigenbrodt, Behringer Harvard Funds Jonathan Perkel, Travelocity Jill Witter, Novation Fort Worth Panelists Howard Herndon, First American Payment Systems, L.P. Roger Nober, BNSF Railway Company Bob Robinson, BancTec, Inc. Elaine Whitbeck, Alcon Laboratories, Inc. Panel Alston Bird Attendees Gustav Bahn John Crews Darren Hauck Jon Shepherd Alan Struble Overview Why consider alternatives? What are acceptable alternatives for you and your law firm? Are there issues under the Texas Disciplinary Rules of Professional Conduct (“Rules”)? What’s wrong with the billable hour? Mark Chandler (Cisco SVP/GC) speech from 2007 - “State of Technology in the Law” “Put most bluntly, the most fundamental misalignment of interests is between clients who are driven to manage expenses, and law firms which are compensated by the hour.” “Today there is little incentive for law firms to apply risk-reward logic to the amount of legal services provided. And General Counsel know that.” Step 1 – Collect Information Are you getting value? Consider – What legal services do we need? What is my budget and do other budgets come into play? How do we control our spending? What are our objectives? Do we track our spend? How? A bird in hand . . . While far from perfect, the billable hour system may still work depending on your circumstances Are you meeting internal expectations? At least for now . . . Fixed blended or discounted rates (when available) initially reduce costs But still rely on billable hours as the sole measure of law firm value delivered Step 2 – Engage Be candid with your law firm State objectives When feasible, give budget numbers Be open to dialogue Firms have volume of work necessary to change model But both parties must adjust to new ways of thinking Explo