Pricing Our Services

Value Based Billing (VBB) Arrangements

For more than a decade, Crowell & Moring's lawyers have been using pricing structures that are built upon an underlying belief that our financial success should be determined more by your perceptions of the value we create, and less by the level of effort we spend on your projects. In many instances, we explicitly reserve a portion of our fees, and ask our clients to determine the value we have delivered through our work and reward us appropriately.

We develop and align incentives with our clients, that reward our output and what has been achieved for our clients, a clear-cut shift away from pricing hourly billing inputs that is the traditional law firm pricing model. We work with our clients to develop fee arrangements that focus on, and reward, our ability to generate or preserve value as defined by you, the clients. We no longer consider these 'alternative' but as our primary fee arrangements.

Crowell & Moring prides itself on not only its enthusiasm for VBBs, but also its ingenuity and creativity in developing arrangements that suit the particular needs of a specific client or matter. Our innovative approach was recognised by the Financial Times when we won the FT Innovative Lawyers Award 2009 for our billing and fee arrangements.

The first step in any discussion about fees is to understand what is important to our clients. For example:

• Incentivizing a particular type of success
• Predictability of fees
• Timing of fees
• Overall level of fees
• A particular staffing model

There is no "one-size - fits-all" and the firm's overall relationship with the client is also an important element of the discussion. Many clients prefer a mix of traditional and non-traditional fees, depending on the needs of particular matters. Below are some examples of the types of VBBs our clients have found valuable. But we craft variations on these every day.

Fixed/Flat Fee
Crowell & Moring will provide certain services for a set fee. This could be for a particular matter or for a particular service. Fixed fees typically are set:

• Per matter or for a book of business
• For a set period of time, or for the life of a specific project
• As a monthly retainer for "access and advice"

Blended Rates
Crowell & Moring will agree to bill the same rate for any attorney who works on a particular matter, regardless of each attorney's individual billing rate. Blended rates are determined based upon the work expected to be provided for a matter and the billing rates of the attorneys anticipated to handle the matter.

Caps and Collars
Fee caps are determined based upon anticipated fees for a matter, and they can be set for the entirety of the matter or for each phase. As an alternative, we agree to a specific targeted fee amount, and then establish "collars" around that amount, with shared risk and shared reward thresholds should the cost of the work exceed the collar in either direction.

Credits Toward New Business
Crowell & Moring may provide a reduction in fees for one matter, in exchange for a client's commitment to "try us out" in a new area. This could take the form of a discount on the instant matter, a credit against future billings for the new area, or some combination.

Holdbacks
In combination with virtually any underlying fee agreement, Crowell & Moring will hold back an agreed-upon percentage from its monthly or project billings. We will have the opportunity to earn, and receive payment of, the full holdback amount, including a performance bonus, at the discretion of the client. Whether we earn back some, all of, or a premium over, the holdback amount will be based upon the client's assessment of our performance against certain criteria, such as quality, results, creativity, efficiency, cost- consciousness, and effective utilization of internal client resources.

Success Fees
At the discretion of the client, Crowell & Moring will be eligible for a success fee or premium, on top of its billings, in the form of a performance bonus. A success fee can be a set fee, a graduated fee or a percentage of our billings or of the agreed value created. Like a holdback, whether we earn a success fee will be based upon the client's assessment of our performance against certain criteria.

Phase-Based Fees
Crowell & Moring will estimate a particular fee for each phase of a matter based upon the work anticipated for each phase. This arrangement can be implemented in a variety of ways. For example, the arrangement can be based upon fixed fees where we charge a set fee for each phase of the matter. Alternatively, the client can pay an estimated, or budgeted, fee for each phase with a true-up against actual billings at an agreed-upon time

Contingency Fees
Clients typically are familiar with traditional contingency fees for plaintiff matters, and Crowell & Moring routinely enters into such arrangements with clients. But we also are willing to use reverse contingency fee arrangements for defense cases. A reverse contingency fee is based on how much we save the client as a defendant. If we can resolve a matter for less than the exposure attributed to it by the client, then we will recover an agreed-upon percentage of that savings.