Alternative fee arrangements (AFAs) overview
AFAs are any billing arrangement other than standard hourly rates.
Alternative fee arrangements (AFAs) are any billing arrangement other than standard hourly rates. AFAs give companies an alternative to traditional hourly billing arrangements with law firms, and companies can better manage overall spend without the administrative overhead of individual matter budgets.
AFAs provide a more financially-focused approach to matter management:
- Better legal spend management: Legal spend can be negotiated to an amount, then managed automatically to agreed-on fees and expenses, or with pre-configured task codes.
- Less budget administration: From a budget perspective, AFAs provide the ability to manage costs without the administrative overhead of individual matter budgets.
- Less invoice approval overhead: No invoice-level reporting requirement is necessary. AFAs can be set up with auto-reduce to a pre-determined amount.
- Matter-level fee arrangements: Engage firms on a fixed, flat, or capped fee and expense basis. Multiple firms can have multiple fee arrangements on a single matter.
- Firm portfolios: Group and assign matters to portfolios that show total matter spend by firm.
- Preconfigured task codes: Select cost-per-unit as a limiting factor and/or use a total dollar amount for the task code. Audit task counts at the matter level or use pre-configured task code alerts. Auto-reduce or auto-reject on amount of individual task code; per instance, or total spend assigned to individual task code.
For each matter and each firm associated with the matter, there can be one primary fee arrangement, and a maximum of six secondary fee arrangements. Primary fee arrangements include hourly rates, capped fee, and fixed or flat fee. There can be one of each type of secondary fee arrangements. Volume discounts are an example of a secondary fee arrangement.
You can designate the lead firm fee arrangement in each matter.
- The lead firm fee arrangement is specified in the matter profile for each external matter.
- The lead firm fee arrangement is visible only to company users and lead firm users who are matter participants.
- Only company users who are matter participants with the matter role of Matter Editor or Matter Administrator, or any Company System Administrator, can edit the lead firm fee arrangement.
- The lead firm fee arrangement appears in the invoice profile of every invoice posted by (or on behalf of) the lead firm.
Available Fee Arrangements
Fee arrangement type | Information |
|---|---|
Primary fee arrangements | Standard hourly rates Discounted hourly rates Blended hourly rates Fixed or flat fee Capped fee Performance-based success Fee/Holdback Other hourly rates |
Secondary fee arrangements | Contingency Prepayment Portfolio/Retainer Speedy pay discount Volume discount Other |