Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m N O V E M B E R / D E C E M B E R 2 0 1 5 37 implied that kind of arrangement is pro- hibited there," he says. For those in-house counsel using AFAs, 68 per cent say they introduced the idea to their law firm, while 28 per cent said they discussed it mutually with their law firm partners, and three per cent said their firm introduced the idea. Finding success with AFAs For large Canadian companies with global operations, the use of AFAs has been more common and going on for a longer period of time. Kerry O'Reilly Wilks, head of legal, North Atlantic & U.K., for Vale Base Metals Business, says Vale has been look- ing at AFAs for a number of years. With a team of 10 lawyers in Canada and more than 50 globally, Vale is by no means the largest in-house department in the coun- try. "I think it's because we are so global and we're constantly dealing with interna- tional firms and a lot of American firms, and probably because there is such fierce competition, especially at the higher end of those markets and they are more will- ing to be creative and think of ways to win your work, even if you are under budget- ary restrictions," she says. Vale would prompt its Canadian firms to offer a different kind of arrangement. "A number of years ago, it was fairly novel in the Canadian legal arena — they weren't doing it and were not all that open to it. But certainly more recently, it is one of the first conversations we have with firms even if we've had a long-standing relation- ship with them, to have the conversation at the beginning of a new matter," she says. Especially in a time when commodity markets are not performing all that well, O'Reilly say it's important for firms to be open to negotiations on fees. "It doesn't mean that litigation stops — your project pipeline might slow down, but your litiga- tion doesn't necessarily slow down. So you have to come up with creative solutions with law firm partners to continue to be able to retain great lawyers and the best advisers, but in a way you can accom- do you have written retainer agreements with your primary law firms? what type of billing arrangement do you have with your primary law firm/external service provider? flat fees RFP process other billable hours 1.9 % 1.3 % 6.3 % 12.7 % 31 % 46.8 % Combination of billable hours plus flat fees Alternative fee arrangements (AFAs) if you use alternative fee arrangements, what percentage of the work you send out falls under an AFA? 0 to 25 per cent 25 to 50 per cent 50 to 75 per cent more than 75 per cent 66.2 % 11.8 % 16.2 % 5.9 % from the following examples of AFAs, which ones are you currently using or would consider using? 62.4 % fixed 58.4 % flat 56.4 % discount 44.6 % capped 30.7 % value billing 20.8 % collared 14.9 % holdback/success fee 11.9 % phased fees on specific projects 10.9 % busted deal 10.9 % retainer 9.9 % contingency 73/8& 48/4& yes no % % "i don't ever want to pay regular rate. i always want to have some kind of arrangement whether it's a fixed fee or success fee or whether you build in various milestones." kerry o'reilly wilks, vale base metals business.

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