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 6 33 78.8 % 21.2 % Yes No 0 ARE YOU INTERESTED IN ENGAGING WITH YOUR LAW FIRM(S) IN AFAS? jobs and trying to internalize more work or if they are too rushed to ana- lyze what's best for their billing. O'Reilly says that whatever might be happening with AFAs, it continues to be a hot topic and the senior lead- ership he talks to still expects some sort of different fee arrangement from the external counsel with which they work. Rotstein agrees, saying that, in his experience, external law firms are looking for ways to provide models of billing that work for corporate clients. "I think we're an evolving legal mar- ket where constantly things are tried and if they don't work we try some- thing else," he says. O'Reilly says most firms are more than willing to work on a different fee basis in Alberta. Some are providing a budget and identifying different expertise that can be provided such as a project manager. He wonders if any pushback on AFAs stems from poor RFPs that are being put out where the firms have to put a considerable amount of work into try- ing to understand what the organization wants. Billable hours are back as the most common billing arrangement in-house counsel have with their primary law firm or external service provider, sitting at 50.2 per cent this year compared with 46.8 per cent last year. Staying in line with what the survey said last year, flat fees are still the least popular option, weighing in at 2 per cent. The combination of billable hours plus AFAs spiked to 42.9 per cent from 31 per cent last year. "I think the challenge has always been, both for our organizations being in-house organizations and law firms, how to structure models that work for both players in the arrangement," Rot- stein says. 50.2 % Billable hours 42.9 % Combination of billable hours and AFAs 2 % 4.9 % Flat fees Alternative fee arrangements (AFAs) 0 to 25 per cent 26 to 50 per cent 51 to 75 per cent more than 75 per cent 64 % 24.3 % 5.4 % 6.3 % WHAT TYPE OF BILLING ARRANGEMENT DO YOU HAVE WITH YOUR PRIMARY LAW FIRM/EXTERNAL SERVICE PROVIDER? IF YOU USE ALTERNATIVE FEE ARRANGEMENTS WHAT PERCENTAGE OF THE WORK YOU SEND OUT FALLS UNDER AN AFA? Specific lawyer(s) Industry/practice area expertise Technical expertise Law firm reputation 65.6 % 56.4 % 40.1 % 30 % IF NOT WHY? 47.5 % 42.5 % 62.1 % 37.9 % We prefer a billable hour model Doesn't apply to the work we send out to external firms 22.5 % Don't fully understand AFAs DO YOU CHOOSE YOUR EXTERNAL LAW FIRM BASED ON: IS THE VOLUME OF LEGAL WORK CARRIED OUT BY YOUR DEPARTMENT AND EXTERNAL COUNSEL COMBINED LIKELY TO GROW FOR YOUR COMPANY IN 2016 FROM 2015? Yes No

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