Is there a secret to making alternative fee arrangements work? Most firms that have had success share several of the following 15 characteristics:

1. They hold an individual or group accountable for studying the marketplace and regularly communicating with the firm about how the practice of law is changing.
2. They have a clear vision and a strategic plan to achieve it. This plan defines the performance drivers for each practice group and individual lawyer.
3. They have a formal process for qualifying new business opportunities that is tied directly to the firm’s strategic plan.
4. They are always trying to become more efficient. They are obsessed with finding ways to solve client problems faster, better and cheaper. When possible and appropriate, they package work product, automate routine tasks, eliminate unnecessary work, use technology to connect and share information with clients, and delegate routine tasks to the lowest cost provider.
5. They have an organized approach for managing client engagements (e.g. a formal process for determining the scope of a project, identifying client objectives, developing a plan, creating a budget, assigning resources and managing client expectations).
6. They teach and support budgeting, especially for routine matters. Understanding what it costs to deliver legal services puts their lawyers in a better position to structure win-win pricing arrangements with key clients. They also create measurement systems to see how they’re doing against budget and to keep close tabs on where they’re making money.
7. Their senior lawyers fully understand the various alternative fee arrangements and when to use them. They can speak with clients as experts (e.g. provide fact specific examples and recommend the best approach based on shared interests)
8. They focus their creative billing efforts on areas that offer the highest likelihood of success. For example, they target practice areas and types of matters in which successes have already been documented (e.g. high volume, routine litigation work where costs are easy to predict and surprises are rare). They also focus on key clients whose businesses they fully understand and whose trust they have already won.
9. They conduct alternative billing simulations or mock tests to determine the efficacy of various approaches before incurring any real risk. When they decide to use a new billing approach, they start with a small pilot test rather than trying for firm-wide adoption.
10. They pay close attention to the invoices they send to clients to ensure that they are reassuring clients, not confusing or angering them.
11. They upgrade the quality of service and results by establishing a uniform and objective method for measuring client satisfaction after each engagement and by linking part of attorney and support staff compensation to the results.
12. As their client relationships grow stronger, they pay even closer attention to fee arrangements and the ways in which they can structure them to maximize value for both client and firm.
13. They reward and recognize attorneys for effective client management and profitability, not just hours billed. And they make sure that their compensation systems don't penalize attorneys for being efficient.
14. They build a knowledgebase of successes within their firms and share these successes regularly via firm newsletters, Intranets, brown bag lunches, etc.
15. They realize that win-win billing is as much an art as it is a science. Thus, they encourage continuous learning on the subject and they provide ample opportunities for their lawyers to gain valuable, experience-won knowledge.