Forget image of personal injury attorneys taking a third of any verdict or settlement. Consider instead contingency fees—fees based on outcome of case and performance of your counsel. Creative use of contingency fees can create efficiencies in even most high-level corporate settings. If you retain a lawyer to help your company avoid litigation, couple a reduced hourly rate with a bonus for successfully lowering your litigation outlays.

You also can establish an incentive based on a percentage of money won or saved in trial. If you're a defendant in a case where plaintiff has a strong shot at a $1 million settlement, negotiate a flat fee if case goes to trial, plus a bonus if plaintiff ends up getting less than $1 million. If you're a plaintiff and estimate your case is worth between $1 and $2 million, you might negotiate services for a flat fee plus a percentage of any settlement over $1 million.

Contingency fees turn matter into a shared risk or shared incentive, making law firm your business partner, not just representation. Contingency fees can work well with both flat fee and reduced hourly fee arrangements. Because a number of variations on "pay-according-to-success" theme exist, you should ask firms for options they're willing to discuss.

Multi-layered tasks

If you're shopping for a firm for substantial legal work involving a number of legal specialties, consider using blended hourly fees. Rather than each attorney billing at usual hourly rate, firm calculates in advance an "average" rate based on anticipated time each attorney spends on matter.

The value of this arrangement is twofold—it helps define responsibility in a project and it provides a fair price schedule for client, who avoids paying a senior partner's hourly rate for research that should be conducted by a junior associate

Legal "Insurance"

Firms without in-house counsel that frequently hire legal services might consider contracting with a firm. In this legal billing option, firms and clients agree to a specific charge per month in exchange for a predetermined set of legal services. The contract fee permits client to pick up phone and talk to attorney without needing to eye clock. This approach works like a legal insurance policy. It encourages companies to contact their counsel on non-litigation, non-crisis matters, and to save money in long run by engaging in more preventive legal action.

Just as in business, impetus for change comes from consumer demand. The sooner businesses take lead in securing more effectively tailored billing methods from their legal counsel, sooner they'll get better, more cost-effective legal assistance.

Due to repeatability and increased operational structure, major role shifts from senior professionals to junior staff and temporary help. The firm uses senior staff to go out and hunt for new business.

Skill-building is up to people' individual drive, and largely left in their own hands. The firm' mission is to exploit skills these people have already acquired, and there is no interest in helping them to build new skills. Senior talent is used mainly for managing engagements and reinforcing policies and procedures.

Since these firms deal with issues as problems to their pre-packaged solutions, there is some compartmentalisation. There is a clear hierarchical difference between implementers (junior staff) and business getters (senior staff). In these firms there is an increasing pressure to provide career opportunities for juniors, as opposed to merely giving them jobs. However, juniors are still often treated by seniors as necessary evils eating away seniors' margins.

HIGHLY PERSONALISED PREMIUM WORK

These firms do not have well-defined approaches. They can be regarded as "organised confusion" in which people of diverse backgrounds and expertise perform a pretty broad range of work in an unpredictable fashion. This firm' mantra is "How can we deliver higher client value at higher fees using less of our time, effort and resources?"

They stay on cutting edge of their disciplines and walk into every new assignment with a clean slate and an open mind. You can recognise them because they ask a hell of a lot of questions.

The success of these firms is based on unique knowledge base of their people. They do not have "standard approaches". Everything they do is "frontier" stuff, involving lots of experimentations.

The use of junior staff is almost zero. Leverage is usually achieved by using clients’ own implementing team, which also becomes part of knowledge transfer process. This way one single consultant, co-ordinating implementing team, can achieve amazing results.

And here lies another difference. There is a huge difference in focus between first two and this type of firm. The first two type of firms focus on tasks, activities and deliverables. For example, we write 12 1000 page reports, we deliver 10 half day workshops with 50-page student manuals.

Premium firms go for results and outcomes. For instance, we help you to increase sales by as much as 20% in next six months, we help you to reduce talent turnover by up to 15% in next three months.

Can you see difference? One firm can build you a website. It is nice but useless. The other firm can help you to reduce cost of acquiring new business from global market place. That is something. Having a web site only for sake of having a web site is just as useful as putting a pimple on an elephant’s arse. It makes no difference at all. At least not to elephant. Well, unless it is a small elephant and a huge pimple, but now we are into zoology, so let us get back on track.

The other differentiating factor of these firms is that head count is bare minimum with minimum operating overheads and maximum margins.

Talking about "frontier" work, clients are looking for best and most reputable firm. For firm it is vitally important to seek this pre-eminence by building reputation of individuals.

Among three type of professional service firms, this is only one that recognises that people build relationships, thus do business with people, not with firms.

ON SUMMARY Now take some time and have a hard look at your firm. Think about how you present your solutions and how you interact with clients.

* Which type of firm is yours?

* How could you step up to next highest level?

* Who do you have to become and what do you have to do to be able to step up?

* What would be pay-offs of stepping up?

* What are investments you have to make in order to step up?