A Few Not So-Obvious Benefits of Alternative Fee Arrangements (AFAs) - Nexl

A Few Not So-Obvious Benefits of Alternative Fee Arrangements (AFAs)




Find out more about the hidden benefits of utilising alternative fee arrangements (AFAs) in your law firm.


Improved Collections


By having the law firm and client agree to a fee in advance of starting a project, not only is the law firm decreasing the likelihood of fee reductions at the end of the projects, but they are also increasing their likelihood of collecting that agreed upon fee amount. Further, they are also significantly reducing the amount of accounts receivable related administrative work required.


Noteworthy stat: 88% of the hours worked are collected, or in other words – 12% of the time working directly on client’s projects are never collected (according to Clio Trends Report – https://www.clio.com/resources/legal- trends/2020-report/read-online/)


Reduce Burnout


Through the use of AFAs, reduce the number of difficult and stressful cost conversations with clients after a project is completed; and move away from the grinder mentality instilled in the industry, where you have to be present and spend long hours working in order to be considered successful.


Increase Accessibility


Accessibility to legal services is a significant issue in the industry, and one factor around people’s reluctance to seek legal assistance is the uncertainty around cost – this factor can be solved with the use of AFAs.


Noteworthy stat: A 2017/2018 study shows that approximately 77% of people facing legal problems in the United States do not turn to an authority or third party to help them resolve the problem, and that percentage is 83% in Canada.

(source: https://worldjusticeproject.org/sites/default/f iles/documents/WJP_Access- Justice_February_2018_LowResolution.pdf)


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