“Modalitiés alternatives de facturation” – alternative fee arrangements – in French legal teams

A survey of French legal departments by Hélène Trink and an executive search firm asked a group of general counsel about their plans in 2010 to pursue alternative fee arrangements (modalitiés alternatives de facturation). Of the 81 general counsel who responded, 18 percent said that hourly billing was sufficient; 44 percent said they already had AFAs in place; and 38 percent said they were contemplating additional forms of non-hourly billing.

The next question dug deeper into the specific AFAs under consideration (respondents could choose more than one). The most common alternative, by far was fixed fees (Forfeit, 79%) followed by tiered discounts based on annual fees (Remise sur Chiffre d’Affaires annuel, 50%). I do not view discounts as altering the economic incentives of firms to bill as many hours as they can.

The remaining choices were results-based payment (Honoraire de résultat, 32%), annual retainers (Abonnement, 14%), and other (Autre, 11%). An annual retainer can mean nothing more than the method and timing of payment, hardly a shift away from hourly billing.