Frequently Asked Questions:

Q. It seems that every December or so, I get a letter from each of my law firms announcing their annual rate increases. Will I get such a letter from Valorem?

A. No. Ours comes in June.  Just kidding. Once we agree on a fee structure, that’s it. No letters announcing changes in rates or the structure. We may send a letter wishing you Happy Holidays, so don't get nervous if you see our return address on an envelope in your mailbox in December.

Q. Why is collaboration so important to Valorem?

A. Collaboration is one of the values that truly distinguishes Valorem. Ask yourself these questions: if cost was not a factor, would I prefer experienced lawyers handling my case or untrained, inexperienced lawyers? Would I prefer one lawyer thinking about my case or several experienced lawyers brainstorming about my issues? You get the picture. There is great value to clients in having experienced trial lawyers working together. But if you are paying by the hour, it becomes too cost-prohibitive to be effective. At Valorem, we remove that impediment through our fee structure. Large firms pay their attorneys for billings and for hours, so that is where people focus their efforts. Valorem rejects these concepts because they are at odds with client interests. We have a compensation system based entirely on firm performance, not any individual’s performance. And because firm performance improves with collaboration, there is a strong incentive to collaborate and contribute to the team every day in every way.

Q. How do you handle larger cases where your adversary “staffs up” and tries to bury you in documents and discovery?

A. One of our operating premises is that clients do not want to pay to keep law firms staffed on the off chance that they will have a “hundred year flood” kind of case sometime in the future. Another operating premise is that in today’s world, it is easy to retain contract lawyers who are every bit as talented as less experienced but more expensive lawyers at some of the largest and best law firms. In fact, most of our contract lawyers began their careers at elite law firms, where they received great training. We retain these superb lawyers when we need to, at a fraction of the rates charged by their former firms. They stay with us as long as we need them. Because they work on a contract basis, when our engagement ends we no longer pay for the resource, which means we don't pass on any "need-to-feed-our-dormant-army" costs onto you. In today’s world, size is a marketing tool. It does not improve performance.

Q. Let’s say that I agree to pay you a flat fee. How do I know you won’t reduce your effort as the fee is consumed?

A. There are three reasons. First, our Value Adjustment Line on every invoice allows you to make a downward adjustment if you feel we are not providing value as the fixed fee is consumed. We know that under performance on our part will lead you to make use of that line, so we have a built in incentive to provide our strongest efforts all the time. Second, our preferred fee agreement will involve either a holdback or a bonus payment which we will be entitled to based on the results we obtain. The third reason is that we are intensely competitive people (want to arm wrestle?) operating in a world in which the results we obtain for each client become the critical stepping stones for future work. Any misstep or slippage for you jeopardizes our future work and our future pipeline...(not to mention our children's futures, our retirement dreams and our marriages. No pressure intended).

Q. In my experience, law firms view budgets as “guess-timates” and qualify them with “the uncertainty of litigation.” How can you adhere to a set fee proposal?

A. Easy. We collect considerable information about a lawsuit and use that information to generate our fee proposal. The case assessment intake form that we have created is six pages long (aren't you glad we aren't billing by the page?). If the information changes materially during the lawsuit because new information is uncovered, your desired strategy has changed or the lawsuit is altered substantially, we will submit a change order outlining the pros and cons of spending additional money. You then decide whether to do so or not. As an example, if your adversary amends its complaint to add an entirely new claim, with different witnesses and so forth, this would be a material change that would require you to decide if you want to spend additional money to move to dismiss that claim, take additional depositions, etc. In general, changes orders are very, very rare, which is why it is easy to adhere to the original fee proposal.

Q. Does your fee agreement include the use of local counsel?

A. If local counsel is under our control (i.e., we are acting as national counsel for you and therefore directing local counsel), and they are amenable to such an arrangement, then yes, we can and will be happy to structure our fee to include them. If we don’t have that control or they don't agree to an alternative arrangement that works within our structure, their fees will not be included in our arrangement. (Sorry, we can only introduce local counsel to the billable hour revolution; we can't force them to revolt).

Q. Doesn't the holdback make the case potentially more expensive than the matter would be using hourly rates or even a simple fixed fee?

A. We focus on results, not hours. The holdback or bonus is about creating an incentive to obtain a result; an incentive you pay only if you get the result you want. This structure is an insurance policy for you. Of course we will devote maximum efforts to obtain the desired result with or without a holdback—but the additional risk or "skin in the game" that we are contributing with a holdback is an added incentive that has no risk for you. It's true, with a holdback or bonus element, if we are successful, you pay us more than if we did not obtain the desired result, but isn't it worth it?  In-house lawyers frequently complain about outside counsel “boiling an ocean to make a cup of tea” or engaging in protracted litigation (i.e., taking every possible deposition or researching to death every hypothetical issue, regardless of the likelihood that it will influence the outcome). Our fee agreements create an incentive to avoid wasting time and instead, focus only on things that influence the end result. 

Q. What happens if we agree on a fixed fee and then the case settles immediately thereafter? Do I still have to pay the entire fixed fee?

A. In all fixed fee arrangements (actually, in all arrangements with Valorem, fixed or not), there must be an element of trust since it is impossible to envision every potential outcome or permutation of any given case. A settlement may occur before discovery even begins. Or, on the flip side, there may be a case where the true complexity or the manpower required doesn’t reveal itself until discovery is underway and we have agreed on a fee. In either circumstance, our expectation is that, if there is a substantial change in the underlying assumptions or circumstances both of us used to come to the agreed upon fee, we will work together to revise the fee to remedy any unfairness. For example, in the situation posed in your question, our expectation is that we would agree on a percentage of the total -- one that reflects the same type of structure agreed to, but on a prorated basis.  Remember, we look at our relationship as a long-term one.  It's important to us that you are happy so that you not only hire us again, but you tell your friends to do the same.