To Make AFAs Profitable, Change the Client Relationship
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About 22 percent of law firms in a new survey said they are profiting by offering alternative fee arrangements (AFAs) to corporate clients. But that means some 78 percent haven’t figured it out yet.
“AFAs only work when your client relationships are at the absolute highest levels of trust—not just a good relationship—but a deep, embedded relationship,” says The Mad Clientist, a blog from BTI Consulting Group. BTI partnered with Law360 to survey 750 law firm attorneys about their fees.
The authors blamed mismanaged scope, poor budgeting skills and not enough flexibility to change internal work processes for keeping law firms from profiting more from AFAs.
“Part of the simplicity and certainty delivered by AFAs comes from the client believing their lawyer will deliver,” the blog states. “Lawyers who have a history of breaking budgets, have infrequent dialogue with their clients (with or without AFAs) or don’t believe in the power of budgets are more likely to end up in [the] make-less-money column.”
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