PERSUIT’s multiple Pricing Item options allow for flexible and detailed customization when building out any request.
Here is a list of the Pricing Item options in the PERSUIT platform.
Alternative Fee Arrangements:
Alternative Fee Arrangements (AFAs) are pricing structures that do not rely solely on hourly rates and the number of hours billed to determine the overall cost to the client.
- Capped Fee: a fee structure used in conjunction with the hourly billing rate. The client and firm agree to an established cap such that the firm is unable to bill for any work beyond the capped amount. The fees under the cap will accrue and be paid based on the agreed upon hourly rates.
- Collared Fee: a fee structure used in conjunction with hourly rates. The client and firm agree to establish a collar targets for the accrued fees. The firm will bill using the previously agreed upon hourly within the collar(s). If the fees exceed the upper collar, an additional concession is provided by the firm for any overages and is typically in the form of additional discounts. If the accrued fees are below the lower collar, the client may reward the firm for this efficiency gain by providing a bonus, typically in the form of a discount reduction or success fee.
- Contingency Fee: a fee structure that establishes a triggering event and an associated fee that is contingent on meeting the requirements of the triggering event. Contingency agreements can be either full or partial contingencies. In a full contingency fee arrangement, the firm will receive a specific fee payment based on the outcome of the matter. In a litigation for example, they may receive a specified percentage of the damages recovered or value at risk for a successful outcome but a much lower fixed price for an unsuccessful outcome. In a partial contingency fee arrangement, the firm agrees to a contingency fee on a distinct and specific piece of the work. This rest of the matter may operate on a separate billing arrangement. In a litigation example, the motion to dismiss may have a contingency fee component on a successful MTD but the rest of the matter may be on a fixed or capped basis.
- Fixed Fee: a fee structure where the law firm agrees to bill the client a predefined amount regardless of actual hours accrued on the matter.
- Success Fee: a fee structure that is similar to the contingency fee but is typically a more defined fee amount and not tied to any values at risk or possible recoveries.
A budgeting estimate is a quote received from law firms which provides an estimate for the potential cost of a specific matter or project. Budgeting estimates are typically used only as a guiding mechanism and to receive an indication of the potential costs. These are often not enforceable.
The discount % is the most common pricing concession from law firms. Clients will often request a % discount on the standard hourly billing rates.
Hourly Billing Rate:
The predominant pricing structure for legal work. The hourly billing rate is the amount of money that is charged by the firm to a client for each hour of work for a particular timekeeper. Most firms have various billing rates that differ by title, location, practice, years of experience, and matter type.
- Hourly Rate: This option is for a single rate option. Typically used for a single blended rate or project specific billable rate.
- Rate Card: This option allows for more flexibility and customization of how the rate card is structured and built.
Other (see instructions): This option allows the client and firm to structure any other type of creative fee structures that are not captured in the items above. Can also be used to capture any quantitative data or information from law firms that may be related to pricing.
No Charge: this removes the fee from the service making the service “free of charge” while still being able to provide the service. Note: this is different from the“Exclude from Scope” option. For more information about excluding a phase or item from scope, please refer to this article.
If you have any questions regarding pricing structures related to a matter, please reach out to your designated CSM.