Alternative Fees & Case/Project Management

I came across an interesting post from an American lawyer working in Taiwan by the name of Paul Easton. Paul works for a firm that handles high volume document productions in big cases. The first interesting thing about Paul's post was his report that in Taiwan, alternative fees are the norm and hourly billing is not. I did not know that about Taiwan. Is the billable hour simply a function of Anglo-American legal systems?

More importantly, Paul's post makes the point that for alternative fees to work -- for both the lawyer and the client -- both the lawyer and the client need to have systems in place to measure productivity. I've written before that, as pricing guru Ron Baker suggests, the key to alternative fees working is providing "value" to your clients. And to a client, "value = great work/result + good price." But to get to that "good price," the lawyer cannot be wasteful. So, in my view, "productivity" is necessary to providing "value." That's the only way that both the lawyer and the client can "win" under an alternative fee arrangement (i.e., the client gets the good result at a good price and the lawyer makes money on the engagement).

Paul Easton's point in his post is that unless both lawyer and client have project management systems in place to both foster productivity during the project or case and to assess productivity after the project or case is over, the alternative fee arrangement may not very fulfilling for both sides. The lack of such a system may not lead to the kind of productivity necessary to keep costs down. And if neither lawyer nor client can go back after the engagement and analyze whether the arrangement worked for them financially, then the incentive or the enthusiasm to do further alternative fee arrangements may not there.

In the end, Paul recommends that if a law firm does not have a good project management system in place, it probably should not experiment with alternative fee arrangements. I think that's wise advice.