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What is an Alternative Fee Agreement?

In an attempt to strengthen the company without decreasing client satisfaction, law firms are investigating alternative fee arrangements (AFA), instead of traditional fee agreements.

Examples of traditional fee agreements include hourly billing-commonly used by family and divorce lawyers, and contingency fee agreements or–only when you win agreements offered by personal injury attorneys.

With alternative fee arrangements, attorneys can offer fixed-fee or a hybrid billing contract for a win-win scenario. According to, AFAs can increase client satisfaction in addition to strengthening long-term attorney-client relationships.

The idea of an AFA is not new. It has been common practice for many estate planning lawyers that focus on drafting wills. In April 2011, the New York Bar Association issued a report that urged law firms to consider expanding the use of AFAs. The association suggests that AFA agreements may become the dominant law-firm billing structure in the near future.

To successfully provide AFAs, law firms need to compose a unique agreement that meets both the firm’s needs and the client’s needs- a win-win situation for both parties. Successful AFAS should not be centered on increasing firm profits, but rather the client’s values and goals and how meeting those expectations can lead to profits.



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