An alternative fee arrangement is frequently required as part of a law firm’s response to a client’s request for proposals to handle new litigation matters. In-house attorneys routinely receive, review and compare such proposals, and nearly all law firms regularly submit them, but the parties often do not follow a disciplined approach in developing a realistic budget. The risks to clients of retaining outside counsel subject to a poorly constructed AFA are very real, while outside counsel have their own set of considerations regarding whether to submit a proposal. To help ensure that the interests and goals of outside counsel and their clients are properly aligned throughout a litigation matter — and stay that way — it is crucial that AFA proposals be intentional in their construction.

Originally published in Law360 - July 5, 2017.