Alternative fee arrangements include flat fees for defined scopes, fixed fees per litigation phase, capped fees limiting total exposure, blended rates, and success or holdback components tied to outcomes.
They require a clearly defined scope and an explicit process for handling work outside it.
Alternative Names:
AFA, Non-Hourly Fee, Value-Based Fee
Why it Matters?
These structures align incentives by letting efficiency benefit the firm rather than reducing revenue, which is why they pair naturally with technology investment. The recurring failure is scope definition, since a flat fee negotiated without clarity about what happens when a case is removed, consolidated, or set for trial becomes a dispute. Portfolio arrangements across many matters work better than single-case pricing because they spread variance.
Frequently Confused with
Related terms
Frequently asked questions
What makes an alternative fee arrangement work?
Why do carriers favor these structures?
