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Corporate Counsel Connect collection

January 2014 Edition

Alternative fees: The power of collaboration

Nicole Nehama Auerbach, Valorem Law Group

Nicole Nehama AuerbachPeople who know that my firm handles complex commercial litigation using alternative fees often ask what I think is the greatest benefit of these arrangements for clients. In the past, I have said it is either having budget certainty or the fact that clients only pay our bonus or hold back amounts based on if we achieve the goals identified at the outset. Recently I changed my mind and decided that collaboration is probably the greatest benefit. That's because the other day I spent three hours brainstorming with one of my partners about one single issue in a complex commercial litigation matter. We intended to discuss the matter for only 15-30 minutes, but during the discussion we realized the significance of this issue to the overall case and ultimately, the time we spent allowed us to dive deeply enough into the issue that we developed a detailed strategy on how to deal with it.

As we wrapped up the discussion, it dawned on me that, for our clients, this ability to collaborate at the highest levels of experience is probably one of the best by-products of using alternative fees. In the billable hour model, we were essentially forbidden from collaborating in this manner because clients didn't like seeing multiple partners billing at high hourly rates, or, frankly, doing very much of anything together at the same time. Even an hour-long meeting could result in a collective hourly rate of $2000/hour depending on who and how many were in attendance. While from a law firm perspective it may seem like a short-sighted reaction to such meetings, it is an understandable one.

Having worked on an alternative fee basis for nearly six years now, I truly believe that the ability to collaborate with the most experienced lawyers in the firm (without worrying about the reaction of the client) is a freedom that is worth its weight in gold. Clients paying a fixed fee actually welcome the collaboration because they understand that harnessing the collective wisdom of senior lawyers in a way that doesn't cost them extra results in better strategic decisions, which often results in better outcomes.

The benefit does not reside solely with the clients though. As a senior partner in the firm, I benefit tremendously from being able to pick the brains of my more or just as experienced colleagues. We forget as we progress in our careers that even the most experienced of us can benefit from the perspective and experience of others. Collaboration is so important to our practice that we even have a "collaboration" room where we have "collabostorms" – planned brainstorms where we address issues facing our clients and firm. In the end, there are a number of benefits of using alternative fees for clients but having senior lawyers collaborate is probably one of the most important and sometimes most overlooked benefit.

Want to view a little more on an outside view of in-house counsel and alternative fee arrangements? View Nicole's article in the September issue of CC Connect – "Outside Views on the New Normal."

About the author

Nicole Nehama Auerbach is a founding partner of Valorem Law Group. Valorem was founded in 2008 by BigLaw refugees intent on handling litigation on a national basis using alternative fee arrangements. With offices in Chicago and Silicon Valley, Valorem provides clients with high quality representation, budget certainty and results, not hours. Nicole handles general commercial litigation matters in federal and state courts around the country. She also represents clients in arbitration, mediation, appeals and provides "second opinions" to clients facing key strategic issues in lawsuits. In addition to her substantive work, she is committed to working on issues that impact women attorneys.