Three business lawyers have formed a law firm with what they say is a nontraditional fee structure, tying compensation to the results the firm achieves.
Instead of charging a straight hourly fee, the typical arrangement for business lawyers, the firm of Stueve Siegel Hanson Woody plans to charge its clients contingency-type fees, which more typically are charged by lawyers representing personal injury claimants.
With a contingency fee, a lawyer only gets paid if the client prevails. Typically, contingency fees amount to 25 percent to 40 percent of any recovery if a case is settled and 50 percent if a case goes to trial.
In addition to charging straight contingency fees, Stueve Siegel Hanson Woody plans to charge reverse contingency fees, which tie compensation to the amount the firm saves its clients, and hybrid contingency fees, which combine the hourly arrangement with the contingency approach.
With hybrid contingency fees, said partner Patrick Stueve, "we'll offer substantially reduced hourly rates. But then we adjust the fee based on what the client recovers or saves."
Although variations on the straight hourly fee are not that rare anymore, charging by the hour remains the fee structure of choice for corporate law firms, especially large ones.
That's because big firms tend to incur big overhead costs, making it difficult for them to discount their hourly rates, which build those costs into their structure.
The result is that the longer a case takes to resolve, the higher the legal costs. Stueve Siegel Hanson Woody's lawyers think that approach stands matters on their head. Lawyers, they say, should be rewarded for how quickly they resolve a case, not for the number of hours they expend on it.
"Our incentive won't be the amount of time we put in a case but getting results the client wants," Stueve said.
Stueve and his partners come from big-firm backgrounds. Stueve practiced at Stinson Mag & Fizzell before co-founding Berkowitz Feldmiller Stanton Williams & Stueve with several other Stinson expatriates in 1996.
Siegel was an assistant Missouri attorney general who helped prosecute several high-profile public corruption cases before joining the litigation department of Blackwell Sanders Peper Martin. He left Blackwell to join Sonnenschein in 1998. On the move.
In addition to the departure of Siegel from Sonnenschein Nath & Rosenthal, other changes are afoot at the Kansas City office of the Chicago-based firm.
Jerry Wolf, who left Spencer Fane in 1994 to open Sonnenschein's Kansas City office, is stepping down as its managing partner and giving way to Jim Heeter.
Heeter is a former Kansas City councilman and mayoral candidate. As managing partner, he takes charge of an office that has grown from three lawyers six years ago to more than 50.
Wolf, who specializes in complex litigation, will continue to serve as chairman of Sonnenschein's firm wide marketing committee and as head of the firm's Kansas City litigation group. Woody promoted.
Teresa Woody, a partner with Spencer Fane Britt & Browne, has been named to lead the firm's 38-lawyer litigation department.
Woody replaces Mark Thornhill, who is in charge of blending the practices of Spencer Fane and the St. Louis law firm of Dankenbring Greiman & Osterholt. The firms merged Jan. 1.
Woody becomes one of only a few women to lead a litigation department at a major Kansas City law firm. Spencer Fane was the first big local firm to name a woman as a partner when it promoted Sandy Schermerhorn in 1978.
