AFAs and Managing Them Profitably With Engage

1. AFAs and Managing Them Profitably With Engage

2. The Demand for AFAs – CLO Perspective • CLOs’ first choice for change in law firm services was improved budget forecasting, followed by greater cost reduction, more efficient project managementand non-hourlybased pricing structures • 78.5% of CLOs negotiate price reductions from outside counsel to control costs • Pricing preferences (four options offered) • 36.4% of CLOs said they wanted ‘transparent pricing • 33% chose ‘guaranteed pricing’ • 20.3% of CLOs preferred ‘value-based pricing’ • Only 9.6% say they wanted the ‘lowest price’ available The source for this slide is the Altman Weil 2013 Chief Legal Officer Survey released in October 2013. http://www.altmanweil.com/CLO2013/

3. Demand for AFAs – Law Firm Perspective The Source for this slide is the Peer Monitor 2014 Snap Client Survey. Question: What do you expect to happen for each of the listed billing methods in 2014?.

4. Common Types of AFAs • Contingent or Success Fee • Fixed or Flat Fee • Task or Unit-Based Billing • Percentage Fee • Retrospective Fee Based on Value • Statutory or Other Scheduled Fee Systems

5. Hybrid AFAs • Blended Hourly Rate • Fee Collars • Fixed Fee Plus Hourly • Fixed Fee Plus Success Fee • Hourly Rate Plus Contingency

6. AFA Real Life Examples • Cisco Systems - bundle of routine matters bid for fixed fees • Tyco - annual flat fee basis for products liability • Levi’s – fixed fee worldwide representation by one law firm • Pfizer – use of preferred providers • National real estate practice – customized fees by industry • CMS Cameron McKenna – client offer The source for the previous three slides is an article - Marketing Alternative Fee Arrangements by Mark A Robertson published in the magazine Legal Practice by the American Bar Association in October of 2011.

7. Engage 1.17 April 2014 • Scope Changes • Extend to all Budget Types, Disbursements & 3rd Parties • Historical Scope Change Report tracks individual, commented change sets • Portfolios/Multi-matter Reporting • Create ad hoc portfolio, containing matters from multiple clients, practice groups, etc. • Robust search and save of report set ups & filters for regular reporting • What If’s • Extend to type 2 matters • Preserve original budget after adopting what if scenario • Print option for individual scenarios or side-by-side view with original • Fixed Fee Modification on Phase/Task/Subtask Level Demo Demo

8. Engage 1.17 April 2014 • Collars • Ability to specify incentive pricing with rewards and penalties • Phase/Task Trending Report predicts profitability from current performance • Security • Single Sign-on / Windows Authentication • View Matters access removed in favor of separate View All Matters & View My Matters roles for greater administrative flexibility • Budgeted & Actual Discount % • Compares Final Rate to Standard Rate • Budgeting Flexibility • Change Budget LevelDetail – Matter type 1 to 2, 2 to 1 Demo

9. Engage 1.17 April 2014 • Usability/Efficiency • Summary Bars in Phase | Plan Display Hourly Budget, % Complete (Roll Up & Propagate Down) & Complete Dates (Display Last in Phase/Task/Subtask) • Resource Duplication on Clone • Phase/Task/Subtask Renaming within a Budget • Improvements to Match | Estimates workflow (layout, font sizes, etc.) • Whencreatingestimatesfromunmatchedmatters, autoload Data Fields from the FMS Matter (Practice Group, Matter Type, Billing Arrangement) • Increase Field Length to 512 for Phase/Task/Subtask Descriptions and Details • On the Portfolio screen, we display matternumbers & we have a new graph viewerthatlets us page through multiple years. • New Color Scheme Demo

10. Dawn Haberlach Engage 1.17 demonstration