Ask for probabilities of scenarios to help decide bonuses

Good arguments stand behind the point that bonuses to law firms ought to correspond to the likeliness of the outcome and the value to the client of that outcome (See my posts of Aug. 4, 2007 on a litigation bonus; and Oct. 15, 2007 on suggestions.). To try to bring into alignment the incentive and its likelihood, law departments can ask law firms that are competing for the business to estimate the likelihood of various scenarios.

While far from irrefutable, at least if several experienced firms weigh in on the probabilities of a scenario, such as prevailing on a motion for summary judgment within 12 months, a law department can more rationally match incentives to the probabilities of their achievement. Over time, too, the law department will develop a better sense of these complementarities.

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