Alternative Fee Arrangements

Alternative Fee Arrangements

Autry, Hall & Cook, LLP offers alternative fee arrangements to accommodate clients who are interested in forms of payment other than traditional hourly fee agreements.  Alternative fee arrangements can be structured to accommodate each client’s unique needs, financial status, and anticipated outcomes.

Why Does AHC Offer Alternative Fee Arrangements?  

Some clients choose to avoid asserting or defending their rights, or hiring an attorney to advise with transactions, because they do not have funds for legal fees under the traditional hourly-fee arrangement.  Other clients do have the funds, but they still forfeit their rights because they abhor and fear the typically high cost and uncertainty of legal fees.  Those rights are forfeited and lost forever.  This is not how our American legal system was designed.

Unlike many law firms, AHC works with clients who assert or defend their legal rights but desire alternatives to the traditional hourly-fee arrangements.  AHC is an established law firm that has substantial experience in our core practice areas.  As such, we are able to use our experience to anticipate the course of transactions, litigation, and arbitration and develop alternative compensation arrangements.

What Are Alternative Fee Arrangements?

Alternative fee arrangements include any compensation arrangement other than the traditional hourly fee, subject to our State Bar Rules.  While each situation is different, alternative fee arrangements generally tend to shift some portion of compensation risk to law firms in exchange for an agreed-upon fee arrangement based on specified criteria.  With these arrangements, AHC is able to more closely align its financial incentives with clients.

Some of the alternative fee arrangements AHC offers include:

Fixed/Flat Fee:

  • AHC receives a one-time or periodic sum for handling a matter or group of matters
  • May include a guaranteed maximum price
  • For litigation matters, may cover identifiable segment of litigation or arbitration

Pure Contingency Fee:

  • AHC receives a percentage of any recovery in a matter
  • Client will typically pay the expenses of the litigation (filing fees, court costs, expert fees, expenses, etc.)
  • Merges the interests of both AHC and the client – the more the client recovers, the more AHC recovers
  • Some matters can be set up in the inverse – the less the client pays, the greater AHC recovers
  • Available only in certain matters
  • Requires up-front investigation by AHC

Hybrid Contingency Fee:

  • AHC receives a portion of its hourly rate and a smaller percentage of a recovery in a matter
  • Available for most matters

Performance Based/Holdback Fee:

  • Any arrangement that calls for lower upfront costs with a bonus if the matter is successful
  • E.g., AHC receives a portion of its hourly when incurred, while the rest is withheld contingent upon success in the matter
  • E.g., AHC receives a lower hourly fee but receives an incentive or bonus payment if certain criteria are satisfied

These fee arrangements are not exhaustive and can be modified to appropriately align the interests and risks of AHC and the client.