that precludes firms for charging fees “not earned”) or ( 2) clients setting an outcome-based fee, but then suggesting that the firm should split the difference when the
“windfall” was larger than expected or the matter was resolved earlier than
■ Look-back. Is there a “look back” provision using “shadow invoices” to compare
flat fee amounts to what would have been paid under an hourly rate approach? (See
Appendix for sample retainer agreement language.) If so, what rates should be
used—rack rates or discounted rates? Or are the look-back fees only tracked to
allow a better assessment/re-negotiation of the pricing for future matters?
■ Structure. Is one outside firm responsible for managing the expenditures of another
to make it all come in on budget? Are there concerns about fee sharing?
What reports / tracking mechanisms are in place?
■ Staffing plan. Who will be working on this matter? Is it the right mix of seniority,
experience and resources, with limited turnover? (This can be important, as some
clients fear getting the law firm’s “B team” on a flat fee. This can be remedied, in
part, by focusing on long term benefits, and emphasizing that success on this flat fee
matter means an opportunity for more business in the future.) In the end, the
assessments of how to best perform the work necessary to increase value should
yield more effective staffing arrangements. Sometimes that may mean fewer people
performing certain tasks and more people performing others. Some tasks will call
for more senior resources and others more junior. But undoubtedly there is a strong
correlation between the right staffing mix and the right outcome under a value-based fee structure, and the goal here is to illuminate the best “fit.”
■ Project plan. What will outside counsel be doing, and when? How does each step
connect to each other and to the budget?
■ Budget and forecast. How much will it cost (piecemeal and total) and how will
updates flow regarding progress vs. budget (covering both dollars and activity
What is the frequency of updates?
■ Deciding frequency. The frequency of updates should vary depending upon what is
being tracked, and how important the need is for sufficient time to “course correct.”
For examples every two weeks for items like progress vs. budget on key matters that
are moving forward; quarterly for items like progress vs. budget on routine matters;
and bi-yearly for items like performance reviews.
■ Multiple update methods. The fact that updates for the plan take place on a certain