■ Completing a merger, acquisition, or deal;
■ Managing an entire matter at or below budget for the legal services;
■ Reducing the overall number of new cases filed; or
■ Successfully achieving transaction results (e.g., shifting certain risks, etc.).
The resources below provide more details on how to correlate outside counsel compensation with
“Value Practice: FMC Alternative Billing,” ACC Value Practice (Sept. 2008), available at
“Aligning the Interests of Client and Firm in Complex Litigation and Complex
Transactions- Practices Implemented by Womble Carlyle Sandridge & Rice,” ACC Value
Practice (Dec. 2009), available at
“Outcome-‐Driven Fees in High Stakes Litigation . . . Bartlit Beck’s Alternative Approach,”
ACC Value Practice (Nov. 2009), available at
“What Do Hours Have to do with Value?,” ACC Docket (Oct. 2009), available at
Pure contingency is a more intensified form of the performance-based hold-back. Under a pure
contingency arrangement—most easily envisioned and applied when recoveries are sought—the
law firm would be compensated via a portion of the amounts recovered, and would receive no
compensation if no amounts are recovered. The terms can be adjusted and tempered to better
manage the down-side risk of zero recovery, and the model can also apply to the defense context
(earn X if you win, earn zero if you lose)—but that is harder to do since successfully defending
against a claim does not typically result in a set recovery amount.
■ Advantages: The interests of client and law firm are closely aligned under this
structure. The more the client succeeds, the more the law firm gets paid—and vice-versa.
■ Drawbacks: Under a contingency approach, a law firm could earn much more than
it might under a conventional hourly rate approach. Some clients are not
comfortable with this.