Alternative Fee Arrangements
Alternative Fee Arrangements are agreements between Brewer Law Firm, LLC and a client to provide compensation to Brewer Law Firm, LLC based on a structure other than hourly billing.
Many clients prefer AFAs over traditional hourly billing. Some clients lack the financial resources to pursue a particular case or matter, as is often the case in intellectual property litigation matters or litigation matters for smaller growth companies. Other clients favor the further alignment of interests inherent in certain risk-sharing arrangements where the Firm only gets paid where a “win” has been secured for the client, such as contingent fee litigation matters. Still, others prefer AFAs for their cash flow benefits or to bring certainty to budgeting. Whatever the motivation, our clients have been pleased with our flexibility and cooperation in arriving at fair and appropriate AFA structures. In the past few years, our institutional clients have requested AFAs on an ever-increasing basis.
Examples of Alternate Fee Arrangements are:
Pure Contingency Fee
A pure contingency fee arrangement is the most traditional alternative fee arrangement in which Brewer Law Firm, LLC receives a fixed or scaled percentage of any recoveries in a lawsuit brought on behalf of the client as a plaintiff. In personal injury pure contingency fee cases, the law firm typically advances all costs and expenses and, after any settlement or verdict, takes both its fees and reimburses itself for the advanced costs and expenses. If there is no recovery, the client does not pay for the costs and expenses advanced.
However, in non-traditional personal injury cases, where there either may not be insurance coverage or the ability of the defendant to pay is questionable, typically the client pays the expenses of the litigation.
Personal injury cases are almost always Pure Contingency Arrangements, where the client pays nothing unless Brewer Law Firm, LLC, wins and collects.
Partial Contingency Fee
A partial contingency fee arrangement is when Brewer Law Firm, LLC receives a portion of its hourly rate plus a smaller percentage of any recoveries in the lawsuit. Partial contingency fees reduce the cost of litigation to the client, while still aligning Brewer Law Firm LLC’s incentives with the client and sharing the fee risk between Brewer Law Firm, LLC and the client. Partial contingency fees are most common in plaintiff cases seeking monetary or monetizable damages; however, they are not limited to such matters. Defense cases can also be structured as partial contingency fees with success contingent on agreed-upon results or milestones being achieved.
Fixed fee or flat fee arrangements are typically arrangements whereby Brewer Law Firm, LLC agrees to handle a matter or group of matters for a sum certain or for a certain rate of investment per month. Fixed fees can be subject to an overall cap paid up front, or they can be for a fixed amount per month without a cap. Fixed fees can also be arranged in set amounts to reach certain phases of the litigation, completing the initial pleadings stage, completion of written discovery, completion of depositions, completion of trial, and/or appeal. Clients who desire budgeting certainty often find fixed fee arrangements attractive.
A holdback/success fee arrangement is similar to a partial contingency fee in that Brewer Law Firm, LLC is paid a portion of its fees up front, but has a portion withheld contingent upon success in the matter. If the matter is concluded successfully, Brewer Law Firm, LLC receives a multiple of the holdback or an agreed upon success fee. This structure is often used in defense cases, or when the result sought in the matter is not monetary. For instance, this structure may be used in declaratory judgment, injunctive relief or trademark defense cases, where the outcome sought is a finding of validity or invalidity of a certain legal finding, or in cases where the result sought is summary judgment or limiting damages below a certain amount.