The survey of 80 multinational companies was carried out by Field Fisher Waterhouse and revealed a particular interest in building fixed fee arrangements in disputes to replace the hourly rate. Corporate counsel also said that law firms should provide ‘budget certainty’ before a case starts especially for dispute work.
According to partner Peter Stewart of Field Fisher, ‘..many of the companies we spoke to already use conditional fees – that is where a different rate is charged by the firm depending on the outcome of the case.’ He said that ‘senior executives and their legal teams increasingly feel it is fair that law firms share in the litigation risk. Alternative fee arrangements in disputes are being expected by more and more companies.’
Alternative fees
The research revealed that 94 per cent of those surveyed had discussed using other fee arrangements. The legal counsel at a construction company in Spain said the company preferred ‘a fixed sum for commercial disputes, although we do use a pay-per-hour method initially when calculating the amount of work that will be required. The hourly method is preferred by a lot of law firms , but we only use it as an initial method. Then we negotiate a fair, fixed fee arrangement.’
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