;Law firm fee is equivalent
to X% of the client’s
recoveries in a particular
;Reverse contingency can
also apply where, e.g.
defense law firm gets paid
only if it wins a dismissal
or jury verdict.
Pure Contingency Situations in which client
seeks recovery and/or is cash-
strapped and is therefore willing
to forego a larger portion of
its upside stake in exchange for
protection on the downside (i.e.
pay large fee for a win and no
fee for a loss). This is higher risk
and higher reward for the law
Hybrid Combination of one or more
of the above approaches
on a given matter or for a
;Flat fee for handling
litigation plus per diem for
trial and success bonus for
Situations where client and firm
wish to be flexible to address
various touch points differently
and reward results.
**This matrix does not include certain approaches that are not typically considered value-based fee structures (but which some may still use and find helpful on
their own or in conjunction with these value-based fee approached), including discounts off hourly rates, tiered volume discounts, and use of blended hourly rates.
While helpful in part, none of these fit the definition of a value-based fee structure as a construct that assesses the value of the service from the client’s perspective.
This ACC Guide to Value-Based Fees is evolving as practices evolve. If you have successfully implemented other value-based fee structures not listed below, please contact us at
firstname.lastname@example.org so we may consider adding your practice to the list.
Law firm compensation
depends entirely upon
achieving certain outcomes.
The first step on the path to value-based fee structures is, well, defining value. This is
an obvious point, but one still worth emphasizing. The fundamental shift: move away from
“how many hours will it take” to “what is the value to be delivered.” From the client’s
perspective, answering this question requires some additional effort at the outset, -- and then
requires the client to communicate that value to those who are on the team -- but it is a
So what does this valuation analysis entail? It requires going beyond vague notions of
success like “effectively resolving the litigation” or “closing the deal.” Rather defining success in
this context means drilling more deeply to establish a measurable benchmark of performance,
either for the matter as a whole or for discrete pieces of it. It means putting a stake in the
ground to say – this is what we are striving for, and if we achieve it or better, then we will have
succeeded in delivering value.
There are two core components here, quality and cost – as well as a decision on how
to measure outcomes achieved. Addressed in detail, these components of valuation could fill a
book. But for purposes of this practical Guide, the list of questions below are designed to help
you start the process of framing your own definition of value added, even before considering
which particular fee structure to implement.