SJ BERWIN is launching a new fixed-fee service for IP litigation work, which it says is the first of its kind.
Called ALFA – Agreed Litigation Fee Arrangement – the new system was created by intellectual property partner Ray Black, who heads up the department's litigation team.
It will be used in contentious IP litigation, although Black says that other departments within the firm are interested in how it will work.
“ALFA is a two-part agreement which we will enter into with clients,” explains Black. “There is one fee set for pre-litigation work and then once we enter litigation we set another fee.
“We can predict with some degree of certainty the amount of work needed to prepare for litigation. As soon as we are instructed we will sit down with the clients and set fees for milestones along the way. It will be a very detailed breakdown of costs, almost like a bill of costs for taxation purposes,” he said.
“Within the fee is a fixed amount of 'air time'. If they want to take up a huge amount of time and want their hand held all the way through, then that will be reflected in the fee we negotiate.”
Black believes that the fixed-fee approach will make clients more willing to enter into litigation because they will know from the outset how much it will cost.
It will also enable financial controllers within a company to sign off accounts in good faith.
“It is a managed approach to litigation. If we choose to put three people onto the job then that is our risk.
“There is a lot of pressure on lawyers now not to just bill by the hour as it is an inefficient way of working.
“A solicitor could come in with a hangover one morning and take five hours to do the work which would normally take one to do, but the client is not to know that.”
To ease the cost still further, the team has prepared a number of standard documents to complete routine tasks more quickly.
Nick Gardner, IP partner at Herbert Smith, says: “I am quite happy to be transparent about costs and to stage particular bits of litigation work but I cannot see how fixed fee agreements could work for litigation work.
“I would want to see the small print of the agreement. If it got to the stage where SJ Berwin had overshot its set budget and was working at a loss then I cannot think that it would be a good situation for the client, although I am sure that SJ Berwin would hold to the agreement and do its best for the client.
“For example a piece of patent litigation could cost anywhere between £100,000 and several million pounds depending on what issues are involved.
“There are also still ways for the other side to delay litigation to bring the other side's costs up.
“Perhaps Ray Black has an accurate crystal ball but I would not do it.”