Navigating the World of Alternative Fee Arrangements The Network of Trial Law Firms Litigation Management: Driving Great Results Naples, Florida May 12-15, 2011 Linda S. Woolf Goodell, DeVries, Leech & Dann, LLP Baltimore, Maryland

Panel Members Linda Woolf Goodell, DeVries Kevin Schiferl Frost Brown Todd Nicole Bearce Albano Lowenstein Sandler Rick Barnes Marjorie Adams-Franzblau ADP Rita McConnell Medtronic Michael Troisi Samsung Electronics

What’s on the AFA Menu? Risk Collar Fixed/Flat Fee Phased fees Fee Cap Pricing Task-Based Billing Blended Hourly Pricing Reverse Contingency Variations of all of the above and more

Real Life Experiences with AFAs Medtronic Ford Motor Co. ADP Samsung Experiences of Outside Counsel

Advantages of AFAs for the Clients Perspective of corporate counsel Cost Certainty Alignment of Interests and Goals Eliminate time spent reviewing budgets and bills Law firm shares in risk Instills trust and loyalty Early assessment of case adds value later

Advantages of AFAs for Law Firms Perspective of outside counsel Predictable income Stronger relationship Better understanding of client’s goals Eliminate time spent on budgeting and billing Reduce conflicts over billing issues

Concerns/Disadvantages of AFAs for Clients Perspective of corporate counsel Early resolution makes AFA a bad deal Push down of work to less qualified attorneys AFA matters put on back burner Financial cushion required by law firm may be too large Smaller companies lack experience to properly price AFAs

Concerns/Disadvantages of AFAs for Law Firms Perspective of outside counsel Requires time up front for which law firm may not be compensated Difficulty in pricing case/engagement correctly Difficulty determining individual attorney compensation Risk that cost overruns will be shifted to law firm

Concerns/Disadvantages of AFAs for Law Firms Perspective of outside counsel (cont’d) Training attorneys to focus on efficient resolution rather than billable time Change or increase in client’s demands Agreeing on what is considered a “win”

Ethical Implications of AFAs Detailed written agreements Interests of lawyer and client diverge Termination of relationship mid-stream Entering into partnership with non-lawyers Staffing and prioritizing cases with best interest of client in mind

Metrics Monitoring and evaluating an AFA program

Practice Pointers Do your homework in advance One size does not fit all Include fail-safe Spread the risk Invest in up-front time with client Flexibility is key Keep lines of communication open