How do I build Volume Discount Commercial Arrangements in my Rate Review Pro Request?

In PERSUIT, you can create, initiate, and include a section for volume-based discount agreements with your firms within Rate Review Pro. This brings structure and proactivity to the conversation with your firms, resulting in better tracking, negotiating, and operationalizing.

In this article, you'll learn about:

• Navigate to Commercial Arrangements in a Rate Review Pro Request
• Different Control Levels Over Commercial Terms
• Building Volume Discounts if Flexible Option Is Chosen
  • Volume Discounts
  • Tier Preferences
  • About Exclusions

Navigating to Commercial Arrangements in a Rate Review Pro Request

In a Rate Review Pro request, you’ll find the Commercial Arrangements within the Content section of the drafting screen. 

Note: to learn more about how to build a Rate Review Pro request, please view this article here.

Different Control Levels Over Commercial Terms

You can decide how much control to have over setting volume discount terms and requesting information from your firms or you can give firms the power to propose commercial arrangements that fit their business. There are three options to choose from:

1. Flexible - set your preferences first, and firms can propose alternatives.
2. Let Firms Propose - firms submit whatever commercial arrangements they deem appropriate.
3. Opt Out - commercial arrangements are not included in this request at all.

Building Volume Discounts if Flexible Option Is Chosen

If you would like to provide guidelines around how firms set the Volume Discount commercial arrangements, then you must select Flexible within the Flexibility Level.

There are three sections you’ll need to complete:

1. Volume Discounts
2. Tier Preferences
3. About Exclusions

Volume Discounts

First is the Volume Discounts section where you can define the volume discount structure and let firms propose their tiers. Five fields must be set here:

1. Fee Scope - choose between Net Fees, which automatically excludes taxes and disbursements from accruals, and Gross Fees, which counts all billed amounts toward thresholds unless excluded.
2. Recognition Timing - choose between Billed, where spend accrues on the invoice date regardless of when payment is received, and Paid, where spend accrues only once payment is received and recorded.
3. Measurement Period - choose between Rolling 12 Months, where spend is measured over the previous 12 months on a rolling basis, Calendar Year, where spend is measured within each calendar year, or Custom, where spend is measured within the defined custom period. 
4. Discount Type - choose between Threshold, which sets a discount rate at each spend threshold, Range, defines explicit from/to ranges for each discount tier, Rebate, which is a set dollar amount given as credit. 
5. Tier Application - choose between Incremental, where discounts apply only within each tier band, or Retroactive, where new rate applies to all spend once a tier is reached. 

For each field, you'll also find a Strongly Prefer toggle. Use this to signal to firms that your proposed structure for that field is your strongest preference - a visual cue that it's likely best for firms to go with what you've proposed.

Here’s what it will look like from the firm’s POV if this toggle is used:

Tier Preferences

While firms ultimately propose their own tiers, this section allows you to set parameters and guidelines as to how the firm builds their tiers. You can give them guidelines around:

• Minimum v. maximum amount of tiers.

• Currency Preference 

• Add additional written guidelines 

About Exclusions

Firms can define their own exclusions to volume discount arrangements. To keep expectations aligned, share guidelines with firms proactively rather than after they submit a proposal.

Firms typically set two kinds of exclusions. Understanding both in advance helps you evaluate proposals and gives you a shared baseline for discussion.

• From Tier Qualification: Spend that does not count toward reaching discount thresholds. Common examples: Taxes (VAT, GST, sales tax), Disbursements & hard costs, Refunds & credits.
• From Discount Eligibility: Spend that may count toward thresholds but does not receive discounts. Common examples: Alternative Fee Arrangements, Premium timekeepers, Premium practice areas.

If you have any additional questions, please reach out to your designated Customer Success Manager.