FEE ARRANGEMENTS

In 2010 how much will your company spend on

2010 2009
outside legal counsel?
$0-$100,000 16% 13%
$100,001-$500,000 23% 24%
$500,001-$1,000,000 14% 14%
More than $1,000,000 46% 49%

In 2010, approximately what percent of your

outside counsel spend is or will be valued
through an arrangement that is not based solely
on hourly, discounted or blended rates, but
2010 2009
which includes fee arrangements incorporating
incentives, caps, alternative providers, pricing
fixed by stage, matter, portfolio, contingency
arrangements, etc.?
0-5% 53% 55%
6-10% 14% 14%
11-15% 7% 6%
16-20% 6% 6%
21-25% 5% 4%
26-30% 3% 2%
31-40% 4% 3%
41-50% 3% 3%
51+% 6% 6%

In 2010 approximately what percent of your

company's matters handled by outside counsel 2010 2009
included such alternative components?
0-5% 56% 59%
6-10% 15% 12%
11-15% 6% 5%
16-20% 7% 6%
21-25% 4% 4%
26-30% 2% 2%
31-40% 2% 2%
41-50% 4% 3%
51+% 5% 7%

Compared the previous year, has work billed on

other than an hourly rate basis increased, 2010 2009
decreased, or remained the same?
Increased 29% 39%
Decreased 9% 8%
Stayed the same 62% 53%

If you anticipate an increase or decrease for

question 4, please estimate the percentage 2010 2009
increase or decrease:
More than -30% 2% 2%
-21 to -30% 2% 0%

-11 to -20% 0% 3%

-1 to -10% 2% 3%
0 to 10% 53% 42%
11 to 20% 23% 23%

21 to 30% 9% 13%

More than 30% 8% 13%

What kinds of alternative fee arrangements have

2010 2009
you used in 2010? (check all that apply)
Flat fee for an entire matter 53% 48%
Flat fees for some stages of a matter 34% 36%
Contingency fees 20% 19%
Incentive or success fees 18% 19%
Disincentive or failure fees 3% 2%
Collars, caps, etc. 30% 25%
Periodic retainer fee for a portfiolio of services 18% 20%
None 22% 24%
Other 5% 7%

If your outside firms have used alternative

staffing arrangements this year, please indicate 2010 2009
which they have used: (check all that apply)
Secondments 12% 10%
Shared staffing 4% 3%
Work outsourced to a third party and handled by
10% 8%
non lawyers
Work outsourced to a third party and handled by
12% 10%
lawyers
Work handled by contract lawyers at the firm
13% 18%
and/or in the legal department
None 67% 67%
Other 1% 1%
If applicable, who initiated the alternative fee
2010 2009
arrangements that you used in 2010?
The law department 51% 54%
Law firms 3% 3%

Some of both 20% 18%

Does not apply 26% 26%

Do you think that more or fewer firms are willing

to discuss changing their fee or service structures 2010 2009
to offer you alternative arrangements?
More firms 61% 64%
Fewer firms 4% 3%
About the same 21% 17%
Don't know 15% 16%

Have you ever started working with a new firm

because they offer alternative services or fee 2010 2009
arrangements?
Yes 26% N/A
No 74% N/A

Have you ever stopped working with a firm

because they didn't offer alternative services or 2010 2009
fee arrangements?
Yes 13% N/A
No 87% N/A

In 2010, did you require some of your firms to:

2010 2009
(check all that apply)
Cut back their proposed hourly rates 38% 34%
Offer discounts on billable hours 61% 54%
Offer alternative fee arrangements 39% 31%
None of the above 24% 31%
If you have not used alternative fee
arrangements in 2010, do you plan to try to 2010 2009
implement them in 2011?
Yes 24% N/A
No 18% N/A
Not Applicable 58% N/A

In your judgment, what is the biggest reason why

there have not been more alternative fee billing 2010
arrangements?
Law firms are comfortable with the billable hour 17%

Clients are comfortable with the billable hour 5%

Many law firms and clients have insufficient
experience defining or managing work on an 37%
alternative fee basis
Alternative arrangements are too difficult to
7%
negotiate or stick to
Law firms are unwilling to participate in
8%
alternative arrangements
Absent better metrics and data, it is difficult to
20%
detemine alternative values
Alternative fee arrangements are too risky 2%
Other 4%

In what practice areas have you used alternative

2010
fee arrangements? (check all that apply)
Litigation 47%
Transactional 46%
Compliance 20%
IP 24%
None 19%
Other 10%

DEMOGRAPHICS

Your job title

GC/CLO/VP of Legal 91%
Deputy GC/Assistant GC/Associate GC 4%
Other 5%

The number of lawyers working in your

company's legal department worldwide
0-5 69%
6-50 26%
51-200 5%
More than 200 1%

Law department budget

0-500,000 29%
501,000-1,000,000 19%
1,000,000-25,000,000 45%
More than 25,000,000 7%

Annual gross revenue of your company

$0-$50,000,000 24%
$50,000,001-$500,000,000 30%
$500,000,001-$1,000,000,000 15%
More than $1,000,000,000 31%

Number of law firms with which your company

will spend at least $50,000 during 2010
0 7%
1-10 68%
11-25 18%
26-50 5%
51-100 2%
More than 100 1%