The terms that a law firm agrees to, such as to accept a 25 percent holdback in return for 10 percent of the difference between a $10 million settlement and a $50 million settlement, tells you what the firm thinks of your chances in the lawsuit. Previous posts on this blog have concentrated on how to manage costs through alternative fee arrangements, but those arrangements also provide valuable insights into how experienced lawyers rate your prospects.
If more than one law firm evaluates (or proposes) payment terms that depend on the outcome of the case, your department can learn quite a bit about what others conclude about the value of your case– a mini-prediction market. Fred Bartlitt, speaking at the Ninth Annual SuperConference, commented on this ancillary benefit of a fee negotiation. It gives a different spin to Early Case Assessment.