Issue link: http://read.uberflip.com/i/83718
www.iltanet.org The tasks to be performed should also be shared with the client to provide them with a clear understanding of the nature of the work. Once completed, the budget is now a clear road map for the legal team to follow. Legal team members who historically billed time without constraints now have guidelines for a reasonable amount of time necessary to complete their tasks. However, law firms should not stop there. A value- based fee requires some assumption of risk. This responsibility is solely on the shoulders of the firm. The client must rely upon the firm's expertise to identify potential risks in like engagements. The firm must first clearly identify and communicate potential risks to the client and then confirm which risks will be assumed in the value-based fee. Firms can only achieve this step if they have good historical information upon which to base the fee. There will be some wins and some losses in this approach, but each matter will add to the firm's organizational assets and enable the firm to improve the fee arrangement on subsequent matters. Monitoring Performance Against the Value-Based Fee Clients may want to monitor performance against the budget to evaluate the reasonableness of the fee estimate. An LPM system should include tools to monitor schedules, key milestones, resource allocation and performance against the fee estimate or budget. The collection of this information also enables an LPM system to provide clients, managing attorneys and team members with alerts and automated reports on performance. This is a vast improvement over the standard billing system, which only provides clients with performance metrics on a 30-day window. An Increase in AFA Volume Baker Donelson has definitely seen a steady increase in the volume of AFA evaluations since the program began in December 2010. Initially, the evaluation process was 22 ILTA White Paper more reactive, working only with those attorneys who were aggressively seeking out AFAs. However, as the repository of task lists, budgets and experience has grown, the AFA team has become more proactive with all attorneys within the firm. AFA implementation includes large corporate clients as well as one-off cases for small companies and individuals where they are seeking to cap exposure and legal spending. We envision AFAs will continue to increase and become an even more integral part of the firm's business in the future.