Passivity and pusillanimity of law departments when they should aggressively insist on detailed proposals for alternative fees

The Chairman of Shook, Hardy & Bacon, a 500-plus attorney firm with revenues of more than $1 billion, wrote about alternative fee arrangements (AFAs) in Law Practice, Nov./Dec. 2010 at 29. John Murphy noted that one-third of the firm’s revenue, notably in its litigation defense practice, comes from AFAs.

What made his piece notable, however, was not $300 million in AFAs but a point he did not think to emphasize. When asked whether clients are increasingly requesting alternatives to standard rates, Murphy agreed. But listen to his quote: “I would say that 100 percent of the time clients include a section in their RFPs that asks if responding law firms would consider an alternative means of billing their time.” (emphasis added)

How subservient, how groveling, how passive! “Would you deign merely to consider” suggests a power imbalance miles from “it’s a buyer’s world.” RFPs should boldly mandate: “Describe for us specifically three alternatives to charge us that do not depend on hours worked times standard or discounted rates.”

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