September/October 2019

Simple Steps

Combating Scope Creep with Alternative Fee Arrangements

Allison C. Shields

While it seems that more and more lawyers are incorporating alternative fees into their practices, the billable hour isn’t dead yet. But new technology and data analytics tools may soon mean that even clients who used to be more comfortable with the billable hour may insist on alternative fee arrangements and more transparent pricing in the future, so billable hour holdouts may need to get on board. But working with alternative fee structures takes practice.

One of the major problems encountered by lawyers when using alternative fees, whether starting from scratch with a new practice or transitioning an hourly practice to an alternative pricing structure, is avoiding scope creep. Tools that can be used to combat scope creep include conducting an in-depth initial consultation with the client that defines the scope of the engagement and the fee, memorializing that conversation in a detailed engagement agreement, pricing in stages and/or using supplemental services agreements.

The Initial Consultation

Successful use of alternative fees requires good planning, which begins with the initial consultation. During the initial consultation it is critical to take the time to listen to the client and define the client’s needs and priorities, the desired outcome or results and the reasons for wanting that outcome. All clients are not created equal, and clients that seem to have similar legal problems may not all share the same definition of success.

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