A survey conducted by BTI Consulting Group in mid-2015 shows that alternative fee arrangements (AFAs) are experiencing a massive growth in popularity, particularly among larger clients.
A report on the survey in BTI’s blog, The Mad Clientist, indicates that in 2015, AFAs accounted for $23.1 billion in outside counsel spending in the U.S. – up 8.2 billion over 2013. “AFAs are the biggest growth market around – registering a 19.8% compound annual growth rate for the last 3 years,” says Michael B. Rynowecer, president of BTI. The survey also shows that fixed fees are the number one alternative fee structure of choice.
In his Mad Clientist post on the survey, Rynowecer goes on to say, “Top legal decision makers credit their new love of AFAs to improved client focus, predictability in budgets, a more streamlined approach to the work, and the savings — which remain well in the double digits.”
These results dispel a widespread myth among legal pundits who believe that AFAs have little future in legal practice. Not only are AFAs being adopted by the largest consumers of legal work in the U.S., they are saving these clients millions of dollars every year.
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