Merton Hersh has tried to steer clear of confrontation during his long career as an area staffing executive. But when he decided to file a significant claim against an international employment franchisor, he quickly sought legal help.

Hersh said that his hiring of Stueve Siegel Hanson Woody LLP was based on the firm's reputation and its expertise in business litigation. For Hersh, the decision also made good economic sense.

The Kansas City-based firm regularly accepts cases on a contingency risk-based fee arrangement, rather than bill its clients on an hourly basis, the typical method offered by most practices.

The practice closely evaluates a potential case before negotiating a client's fee. The lawyers realize that they face an empty pay envelope if their efforts fail.

"The case was crucial to our business," Hersh said, "but we estimated that it would require hundreds of legal man-hours to successfully close. We knew we would be working with people who knew their livelihood depended on gaining favorable results for their clients."

Although working on a contingency fee basis has been prevalent for many years in personal injury cases, it's still a rarity in commercial litigation.

But some business clients gradually are opting for alternatives to traditional hourly billing.

In addition to contingency fee agreements, they're contracting with outside firms on flat fees for specific transactions and equity-based compensation in the form of common stock or warrants.

Doug Weems, a partner at Spencer Fane Britt & Browne LLP in Kansas City, said the firm offers a fixed-fee arrangement that works especially well if several cases of the same type are involved.

The plans can help companies ensure the predictability of their legal fees.

Weems said companies have become more prudent when they address their need for commercial representation. It's not unusual for a large company to offer a written set of criteria outlining specific requests, including fee amounts and how payments will be delivered, he said.

"There's a wide variety of payment alternatives," Weems said. "But it's the lawyer's responsibility to discuss with a client what's most appropriate for them."

Firms can offer blended-rate fees as an option to billable hours, said Bruce Baty, a partner at Stinson Morrison Hecker LLP in Kansas City.

A client is billed a rate that is substantially lower than a senior partner's normal hourly fee but slightly higher than a junior associate's fee.

The set rate is applicable to each lawyer who contributes to the case.

Baty said Stinson Morrison has proposed contingency agreements that include a set percentage of the firm's hourly rate plus a portion of money recovered when the case closes. Large, sophisticated companies are at the forefront of experimenting with various fee schedules.

"That's certainly the case for businesses that have large litigation needs," he said. "We find that clients want to control the uncertainty of their litigation costs."

Chris Zahnd, associate general counsel for GE Insurance Solutions in Kansas City, said that he frequently brainstorms with outside counsel for new fee possibilities but that the vast majority of law firms still bill hourly fees.

"It's a very gradual trend to other arrangements," Zahnd said. "It's trying to change a mind-set that's been prevalent for years."

Pat Stueve, a partner and co-founder of Stueve Siegel Hanson Woody, said lawyers often shy away from contingency plans for commercial cases because they are more difficult to evaluate than other types of litigation, including personal injury cases.

Local companies often retain Stueve Siegel because of the resources the practice has developed to secure successful judgments, he said.

"That's where the comfort level has to be with large companies," Stueve said.

"They want to know that we have the expertise, particularly when we may be facing an army of lawyers on the other side."

After years of working as an equity partner at two area firms, Stueve said that working in a contingency fee-based environment is more consistent with his personality.

"When you're representing a client on an hourly basis, there's often this constant tension with how much time you're spending on a case versus the results you're going to get," he said. "The relationships that we're able to develop with our clients and the trust levels that we have are particularly rewarding."

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