Alternative Legal Fees: Myth or Reality?

Even though the cost of many things is going down, legal costs seem to climb every year. Clients have begun to realize that in many law firms, the billable hour is an impediment to efficiency.  It creates a counter-incentive to efficiency: to some extent, it encourages lawyers to re-invent the wheel. All too often traditional hourly pricing results in inefficiencies, overruns, complexity and unpredictability, resulting in excessive need for administrative supervision.  As a result, clients have started asking for “alternative fees”  for legal services to be delivered at prices that are predictable and make business sense.

Some of the press about alternative fees sounds a bit like a child describing Santa Claus:  like alternative fees will fix everything, make excellent legal work cheap and deliver all sorts of good things instantaneously.  Alas, alternative fees are not quite the panacea envisioned in the glowing press.  Nor will they work for every legal matter.