In the recent issue of Forum magazine, the litigation boutique Bartlit Beck Herman Palenchar & Scott LLP described how it has made a history of trying to stay ahead of the curve. Established in 1993 with the idea to offer clients an alternative to the billable hour, the firm gained ground with its “success-based” fee model that sought to align both parties’ interests. Today, with 81 lawyers in offices in Chicago and Denver, the firm keeps alive its innovative streak with infusions of technology and staffing and process management.
Partners Chris Landgraff and J.B. Heaton spoke to Forum about how the firm incorporates technological innovation into its practice, co-designing its own software and the urge for disruptive change that is in its DNA.
FORUM: Bartlit Beck got a lot of attention early on for bucking the traditional billable hour price model. Could you describe how being formed around that idea has influenced the firm?
CHRIS LANDGRAFF: The firm was founded in part to get away from the hourly model, and the original idea was to try to develop fee models that align our interests with the client’s. One way we do this is with an arrangement that involves a flat fee and what we call a hold-back – an amount that is accounted for but the client doesn’t pay each month. If the bill was $100 a month, for example, we would ask the client to pay $80 and account for the remaining $20, which would build up every month. At the end of the case, if the result was a good one, the client would typically be asked to multiply that hold-back amount. If the result was a settlement, we typically just ask the client to pay the hold-back amount. If the result wasn’t a good one, the client would keep the hold-back amount.
Using the flat fee plus a bonus model allows us to align our interests with the client’s interests from the get-go.
J.B. HEATON: Exactly, and the idea of the fixed-fee approach was also largely because the firm, from the beginning, had a concept that we wanted more senior lawyers doing more of the work. And once you’ve made the decision that you’re not going to leverage a lot of associates, then that decision drives you to rely more on technology to be more efficient.
FORUM: How does this work in practice?
LANDGRAFF: One example is the idea of technology- assisted document review. We partner with leaders in that area so that we can use and utilize technology- assisted document review in large cases where you have these amazing linguists and programmers developing algorithms to help identify key documents or responsive documents.
HEATON: And that’s a great example – where a technology that is disruptive to an hourly firm is exactly the kind of thing that we’re looking for because it allows us to be more efficient and not need that army of associates – and the technology does it better than the associates can.