Alternative Fees: So how'd you come up with that number? Part II
Following up on my last post on how clients can determine whether the alternative fee quoted is a good one or not, I invite you to read this article from Corporate Counsel, United Technologies Takes a Stand, Puts Billable Hour 'On Life Support.' Here's the punchline from the story:
These days it's easy to find law firms willing to work for United Technologies under some kind of alternative fee arrangement. They're a big customer; the Hartford-based global conglomerate raked in nearly $59 billion in revenue last year selling products like elevators and helicopters. But to truly impress United Technologies, firms now have to do more than propose working off the clock. They have to explain exactly how they came up with their flat fee, and how they'll make money, something many can't do. "Sometimes they tell me they have no idea," says associate general counsel Chester Paul Beach.
I know from experience that no lawyer can wake up one day and decide to quote alternative fees and be any good at it. Being good is like any other estimator's job--it takes experience and a detailed, nuanced understanding of your cost structure and your financial objectives for the engagement. Kudos to United Technologies for asking precisely the right question.