13 Tips for Fashioning a Value-Fee Engagement Letter.
Patrick J. Lamb, in a November 7, 2012 post in the on-line version of the ABA Journal, offers these list of issues to be addressed in an engagement letter using value fees (although many of them sound good in retainer agreements in general):
1. Set a specific fee structure -- whether fixed fee, fixed fee with holdback, capped fee, capped fee with shared savings, etc. If a holdback or bonus is involved, need to specify if discretionary or the criteria for determining this feature.
2. Define staffing -- define which lawyers and paralegals will be used and their roles.
3. Specify amounts of payments, and when payments will be billed and paid -- make sure that payment cycles are defined and when payments will be made.
4. Specify the assumptions on which the fee agreement is made -- set forth the scope of services, especially any limitations (e.g., “no counterclaim” involved).
5. Specify work to be performed and any work not to be performed – specify amount of motion work to be done and any work excluded because client wants to outsource.
6. Identify the criteria for change order approval -- specify materially changed circumstances or unforeseeable circumstances that will justify a change order.
7. Require that the client approve any spending outside the fee agreement -- because fees and disbursements are the client’s to bear, make it approve outside experts and vendors and any other expenditures over an agreed-upon threshold.
8. Early case assessments are required and must be updated -- reporting is key, and these assessments should be done on a specific fixed fee basis in the expenditure category.
9. Basic “what-ifs” should be addressed -- if foreseeable things occur such as a key attorney leaving, significant scheduling changes, interlocutory appeals, adversary bankruptcy, etc., these should be specified as renegotiation targets.
10. Specify whether local counsel fees are included or excluded -- usually, if primary counsel chooses, then fees included (control issue); if client chooses, then client pays -- but should be addressed.
11. Specify whether expert fees are included or excluded.
12. Be clear about whether fees for trial and trial preparation are included. Also,specify when the work ends (i.e., post-trial work or appellate work not included).
13. Conclude whether a general retainer agreement providing volume discount is in place. If a general retainer agreement exists with volume discounts, specify whether the new value-fee retention is covered or how it is to be handled (e.g.,base fee could be included under general retainer but bonus excluded from volume discounts).
Nonequity Partner Compensation Ranges From $100,000 to $1.53 Million.
Debra Cassens Weiss, in her ABA Journal post of November 6, 2012, informs us that the average pay for nonequity partners at 168 of America’s top law firms is about $406,000, but there is more to the story. In reality, the pay ranges from a low of $100,000 (at Vorys, Sater, Seymour and Pease) to a high of $1.525 million (at Milbank Tweed). American Lawyer noted this range, observing that the nonequity partner population is “becoming more and more of a mishmash.” Her article also shows the average nonequity partner pay for these well known firms: Patterson Belknap ($1.295 million), Weil Gotshal ($1.295 million), Quinn Emanuel ($1.075 million), and Cahil Gordon ($1.045 million).