An Hourly Shift: Law Firms See Alternative Fee Arrangements As Here To StayDecember 8, 2013 – In The News
William L. Stang was quoted in the Pittsburgh Post-Gazette article “An Hourly Shift: Law Firms See Alternative Fee Arrangements As Here To Stay.” While the full text can be found in the December 8, 2013, issue of Pittsburgh Post-Gazette, a synopsis is noted below.
The billable hour has long been the backbone of law firms and their pay structure. In recent years, however, firms have had to become creative in how they get paid, as they compete for business with more cost-conscious companies.
The need for new forms of payment has led to the “alternative fee arrangement.” Whether it’s a flat fee, capped fee, blended rate or some other variety, alternative fee arrangements are quickly becoming competition for the billable hour.
According to Stang, now that firms have begun offering alternative fee arrangements, there’s no going back. “We’ll never get away from strict hourly work,” he said. “But this is not a fad.”
Stang pointed out that the need for alternative fee arrangements is very much market-driven. A 2012 study by ALM Legal Intelligence found that alternative fee arrangements became more prevalent between 2008 and 2010 during the economic downturn.
Stang said that alternative fees work well not just for litigators and corporate counsel, but for experienced attorneys who may rarely set foot in a courtroom.
Estate planning is one area where, while depth of knowledge is important, most costs are fairly predictable, he noted.
“If I’ve done thousands of estate planning cases, I know with a fair amount of certainty what is involved and how much time I’ll need to spend on it,” he said.