When appropriate, MLG offers a blended fee arrangement to its clients. In these situations, the fine-tuned billing structure is designed to align the interests of the firm with those of its clients. Oftentimes, hourly-rate billing encourages some law firms and their lawyers to bill as many hours as possible to maximize their fees. Whereas contingency cases tend to incentivize some law firms and their lawyers to bill the least amount possible, settle and recover as quickly as possible, even if a long-term opportunity may be superior. Our alternative fee structure eliminates these problems and maximizes value for our clients.
To avoid these extremes, we partner with our clients, in appropriate situations, to provide services on a fixed fee basis, plus a contingency fee. This arrangement involves a flat monthly fee that is fixed for the duration of the engagement, plus some portion of a recovery (or savings) significantly less than the 35% to 40% contingency fee that lawyers typically charge. The result is a law firm motivated to maximize recovery for its clients yet has no incentive to quickly settle a case if there is a better long-term opportunity. The additional upside is that the client knows how much it will be paying every month for the cost of litigation.
Advantages of Alignment Billing
|Firm incentivized to work productively and efficiently||Firm potentially incentivized to bill more||Firm potentially incentivized to work less|
|Firm incentivized to settle only if settlement maximizes client’s return||Firm potentially incentivized to never settle||Firm potentially incentivized to settle quickly regardless of whether better settlement can be reached later|
|Fixed, certain fees||Expenses vary often at the whim of the firm||Highest total cost|