Issue link: http://read.uberflip.com/i/12204
• Fee and billing term classification: The design of a common fee arrangement classification scheme is critical to support near- and long-term AFA strategies. Historical fee classification schemes used within the firm should be examined to see if they support the various types of AFAs in use today. KM can help consider classification schemes to support these efforts, looking at rate-based (e.g., standard, discounts and rate year) and alternative (e.g., fixed fee by matter, phase or period, or contingency) arrangements. Additional classification schemes may be appropriate to track payment and billing terms to support fee analysis and tracking (e.g., retainer payments, risk sharing components or volume discounts). • Matter classification: The KM, business intake, and business development departments may have designed systems to capture detailed matter information. For example, deal and case profiles support pitches, proposals, legal publication rankings, expertise locators and, perhaps, work product location. This information may also define more clearly the nature of the work performed under a specific fee arrangement. KM can consider how these classifications can be used to support AFA analysis and management. • Fee proposals: Business development proposal-tracking systems help manage information about client and prospective client opportunities. The nature of the information captured in these systems is designed to support client relationships and business development strategies. Given that targeted business development activities may also include specific fee proposal 30 Knowledge Management ILTA White Paper information, KM could examine how these systems could support AFA strategies as well. For example, the capture of this information may provide some additional knowledge about what types of arrangements work, what arrangements do not, as well as insights into how the arrangements were crafted. • Budgets: KM can work with lawyers within and across practices and regions to consider the development of budget templates, similar to substantive precedent collection efforts. Budgets by client, matter, phase or even phase/task can deliver more accurate and consistent information to help lawyers manage the engagement and support firm efforts to analyze the cost of legal services. As firms consider their AFA strategy, a review of these and other firm systems may suggest opportunities to align or re-engineer systems to support both hourly and AFA fee structures. CONCLUSION KM efforts to identify best practices and uncover knowledge within a firm can help identify practice-, regional-, firm- and client-specific needs. A “flat fee” arrangement might be viewed as “alternative” to a U.S. lawyer, while the same arrangement may be considered “standard” by a European lawyer. Separately, the dynamics of practice, regional or client approaches may suggest what fee information can be tracked and when. Broader considerations like these are critical to help firms align AFA-related workflows and systems internally as well as between the firms and their clients. Ultimately, this alignment enables clients and firms to manage their matters effectively, not the other way around. ILTA