Flat Fee per
Savings if the number is set
§ Creates incentive for law firm to be
more efficient (because it can earn a
May overpay if number is set
Hard to determine whether
change in activity warrants an
upward or downward adjustment
(unless you track hours, which
gets back to the hourly billing
§ Savings if the number is set
§ Reduced administrative burdens for
§ Law firm builds deeper working
knowledge of client operations,
which should increase efficiency
§ Proper terms increase incentives to
reduce both fees and liabilities
Client gets desired staffing mix
Discount can work well if client uses
that many hours.
§ Some would say this is hourly rate
Per Capita /
Not clear that this creates
incentives for efficiency.
Challenges ensue if the client
predicts the volume incorrectly
(either low or high).
Some would say this is hourly
rate billing refined.
Requires time and effort to
Lawyers are not always so
comfortable with decision tree
analysis and calculating
Can be challenging without the
proper foundation of trust and
Strong business case for law firm
compensation being tied in part to
outcomes, value delivered.
Lots of potential down-side
Harder to craft effective terms
outside the context of recovery-type work