When companies hire a law firm to provide ongoing legal services, the monthly bills can be unpredictable. And unpredictable legal bills can wreak havoc on a company’s legal budget. In his article, Russell Beck offers one solution to the problem of runaway legal fees: the structured agreement.
I had been handling multiple cases every year, year after year, for a particular client. It was complex business litigation. Accordingly, as would be expected, in some years the fees were substantial, and in other years they were comparatively little.
I asked the client whether, for predictability purposes, it would prefer an option in which we agree on an annual fee (to be paid monthly on a pro rata basis) for all of its litigation in Massachusetts (and certain other states). Such arrangements have colloquially been referred to as having a firm “on retainer,” though more recently the term “portfolio billing” has been used.
The client’s reaction was a bit surprising. While it liked the idea of predictable fees, it had a concern — but not the one I expected. Its concern was that the law firm where I practiced at the time would be inundated with all types of small claims litigation that had, to that point, been handled in-house.
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