Arrangements
Fee Arrangements capture the essence of the deal between firm and client. The Arrangements module stores payment term information, which includes firm-wide fee arrangements (standard rates) as well as those tailored only for a particular client or matter. Umbria Fee Arrangements track the following:
- Fee type
- Rate card
- Additional discounts (bottom-of-the-bill)
- Volume discount
- Billing rules
- Payment terms
- Staff rules
- Expense rules
- Budget reporting
- Targets
Each client should have a default fee arrangement. A new pricing model created in Umbria should default to that arrangement.
Access the Arrangements module from the main drop-down menu located on the Umbria homepage.
Note: Fee Arrangements are also integrated into the Request Matter Plan and Quick Budget Templates wizards. You can either select to create new arrangements or choose existing arrangements from within the wizards.
Search and Display Options
When first accessing the module, all created fee arrangements appear by default.
Click the drop-down arrow next to Arrangement Level to choose to view fee arrangements by: Any, Firm, Client, or Matter.
You can also search for a specific arrangement based on the following filters: Client, Matter, Arrangement type (Collar, Contingency, Fee Cap, Fixed, Hourly (Standard), Partial Contingency (Hourly), Partial Contingency (Non-Hourly), Recurring Fee Cap, Recurring Fixed Amount (Retainer)), and Name.
Search Results
The Arrangements list includes the following information:
| Field | Description |
|---|---|
| Name | Name given to the fee arrangement. |
| Level | Indicates whether arrangement is at firm, client, or matter level. If it is client or matter level, shows matter/client name and provides a link to the matter/client record. |
| Type | Fee arrangement type, with fee arrangement sub-type in parentheses. |
| Status | Shows as Active if the current date falls between the fee arrangement's start date and expiry date. |
| Start Date | Date the fee arrangement becomes effective. |
| Expiry Date | Date on which the fee arrangement is no longer valid. |
Adding a New Arrangement
To add a new fee arrangement:
- In the Arrangements module, click the New Arrangement button in the upper-right of the screen.
Tip: You can restrict the user permission to add a New Arrangement. Admin: Permission Group> Global: Can add arrangement.
- Select a Level of Firm, Matter, or Client. If you choose Matter or Client, select the specific matter or client from the drop-down.
Note: To edit a Firm level arrangement the user must have access to the confidentiality levels of clients. This can be set in Admin: Security> Object Confidentiality.
- Enter a Name to identify the fee arrangement.
- For Type, select from the following: Hourly when fees for a matter are dependent on number of hours worked, or
Non-hourly when fees are not dependent on number of hours worked. - Refer to Arrangement Sub Types below, for instructions on filling out this section.
- Select a Start Date to indicate when this fee arrangement becomes effective. If known/applicable, you can also enter an End Date and specify a Notice Period (parties will receive notice this many days before the arrangement expires). You can set a trigger for this notice in Admin: Manage>Entity Trigger node.
- Enter any applicable Comments and click Save.
Note: The only Fee Type option available for Firm and Client level is Hourly (Standard). The options available in Sub-type are based on your selection in step 4.
The fee arrangement is now added to the system. You can access and edit it to modify information on the Documents, Code & Bill Rules, Invoice Details, Rate Card & Discount, Staffing & Expenses, Budget Reporting, and Targeting tabs.
Arrangement Sub Types
Hourly
| Type | Description |
|---|---|
| Standard | A billable hour arrangement |
| Fee Cap | A maximum fee on the matter or phase |
| Recurring Fee Cap | A maximum fee on a recurring basis. Either Monthly, Quarterly, 6 Months, or Annually. |
| Collar | A range where the fee will be fixed. If the fees come below the range, then the firm may receive a bonus and if the fee exceeds the range, then additional services are provided at a discount. |
| Partial Contingency | There are two type of partial contingency: (1) fee based and (2) outcome based. A fee-based partial contingency is where the firm agrees to do the work at a discount and then receives a bonus if the matter succeeds and optionally, an additional discount if it fails. Another flavor of partial contingency is where the contingent fee amount is shown on the invoice as an additional discount (called a Holdback). The client does not pay the contingent amount until end of matter. The Outcome-based arrangement is when the firm receives a part of the recovery or part of the savings. The hourly work is typically done at a discount. |
Standard (Hourly)
The client is charged for each hour that a resource works on the matter.
Fee Cap (Hourly)
The client is charged for each hour that a resource works on the matter, but a maximum amount of fees is set.
Amount field: The client will not be billed for an amount in excess of the fee cap.
Recurring Fee Cap (Hourly)
The client is charged for each hour that a resource works on the matter, but a fee cap is set. This arrangement is valid for a recurring amount of time that is selected.
Amount field: The client will not be billed for an amount in excess of the fee cap.
The client will not pay more than this amount during the time period (Recurrence) specified.
For example, if you enter a Recurrence of Monthly and an Amount of 5,000, the client will not pay more than 5,000 in any month even if the worked hours exceed that amount.
Collar (Hourly)
A range above and below the budget.
Budget: A base amount is entered. In a "collar up" agreement, the client is not charged for any amount in excess of the budget amount until the fees exceed a certain percentage above the budget amount (the Top Collar). An Over Budget Rate Discount can be specified for this instance.
In a "collar down" agreement, a bonus is charged if the fees end up being a certain percentage (the Bottom Collar) below the budget. Use the Below Budget Bonus field to specify a percentage of the difference between the actual fees and the budgeted amount; this will comprise the bonus amount.
Partial Contingency (Hourly/Non-Hourly)
The amount charged is dependent on the success of the matter.
This can be based on strict success or failure of the matter, or you can select Stair Stepped if multiple levels of success or failure can be defined.
For the Basis of Contingency field, select one of the following:
- Fees: The client receives a discount if the matter fails and/or must pay a bonus to the firm if it succeeds. If applicable, select Yes for Bust/Abort Discount.
- Outcome: The firm receives a part of the savings/recovery upon successful completion of the matter.
If applicable, select Yes for Success Premium.
Select a Type of Penalty Discount, Penalty Discount Amount, or Penalty Fee Amount and enter the corresponding percentage or amount. If you selected Stair Stepped, you can enter multiple fee ranges and specify a discount for each, as well as the probability of each outcome.
Outcome (recovery, savings and deal size): The firm receives a part of the savings/recovery upon successful completion of the matter.
If applicable, select Yes for Success Premium. Select a Type of Success Holdback (discount), Success Premium, Success Premium Amount, or Success Fee Amount and enter the corresponding percentage or amount. (A success holdback is shown on bills as a discount until the successful completion of the matter, at which point the client is charged.) If you selected Stair Stepped, you can enter multiple fee ranges and specify a premium for each, as well as the probability of each outcome.
Select a Type of Success Holdback (discount), Success Premium, Success Premium Amount, or Success Fee Amount and enter the corresponding percentage or amount. (A success holdback is shown on bills as a discount until the successful completion of the matter, at which point the client is charged.) If you selected Stair Stepped, you can enter multiple fee ranges and specify a premium for each, as well as the probability of each outcome.
From the Expenses payor drop-down, choose Client pays all expenses, Client pays up to x amount, or Firm pays expenses.
If the client is paying expenses, in Client reimburses firm out of recovery, select Yes or No. For the How are expenses calculated field, select Expenses will be deducted from outcome amount and then fees are calculated or Fees will be calculated from outcome and then expenses will be paid from remainder.
Non-Hourly
| Type | Description |
|---|---|
| Fixed Fee | An agreed upon amount |
| Partial Contingency | The firm is receiving some payments for its fees and otherwise, typically this includes a payment schedule through the life of the matter. Then there is bonus amount dependent which rewards on a percentage of the outcome, fee bonus based on amount of fixed fee or a certain amount. There can also be an additional discount if the matter does not succeed. The primary difference between the hourly version and the fixed fee version is providing a certainty of amount on the non-contingent portion of the fee. |
| Recurring Fee Cap | When a fixed fee amount is recurring |
| Contingency | The firm's compensation depends on the success of the matter. |
Fixed Fee (Non-Hourly)
The client is charged an agreed-upon amount regardless of hours worked.
Amount: The agreed-upon amount client is charged.
Recurring Fixed Amount (Retainer) (Non-Hourly)
The client is charged an agreed-upon amount each month, quarter, six months, or year.
Recurrence: The recurrence (Monthly, Yearly, Quarterly, 1/2 yearly) that a client will be charged the fixed amount.
Amount: The fee that the client is charged on a reoccurring basis.
Contingency (Non-Hourly)
The client pays only if the matter is successful.
One of two Type selections: Reward Percentage or Recovery Amount.
For Reward Percentage, enter the percentage of the amount awarded that should be paid to the firm.
For Recovery Amount, enter the estimated amount that should be paid in the Est. Settlement/Judgement field.
From the Expenses payor drop-down, choose Client pays all expenses, Client pays up to x amount, or Firm pays expenses.
If the client is paying expenses, select Yes or No for Client reimburses firm out of recovery. For the How are expenses calculated field, select Expenses will be deducted from outcome amount and then fees are calculated or Fees will be calculated from outcome and then expenses will be paid from remainder.
Sub-Type information for Hourly & Non- Hourly Fee Type:
Editing a Fee Arrangement
To modify an existing fee arrangement:
Click the fee arrangement on the list. The sections below describe each of the different tabs in fee arrangements.
Note: When a Fee Arrangement is imported, you might encounter a 500 internal server error on opening a matter link associated to an opportunity. To resolve this, fix the IsOwnership flag for old imports in the FeeArrangementMapping table. This table holds all the matter, client, and pricing model mappings to fee arrangements, and the IsOwnership flag will tell if the matter/client/pricing model owns the arrangement.
Note: To edit the firm level fee arrangement, the user role must be granted Global Arrangements access. Admin: Security>Object Confidentiality.
Note: Phase level Fee Arrangements cannot be edited from the Arrangements page. You can edit the phase level arrangements from the Matter Planning page.
Fee Tab
This tab includes basic information such as the type of arrangement and its effective period. See the Adding a New Arrangement section for more information.
Documents Tab
On this tab you can store any documents relevant to the arrangement, such as signed agreements with the client and outside counsel guidelines.
To add a document:
Click the Choose Files button to locate and upload files from your computer. When you have finished adding documents, click Save.
Code & Bill Rules Tab (Matter-Level Only)
To determine task codes & bill rules:
Select the following:
- Code Rules: Determine the task codes used for the arrangement. From the Source field, select Task Code Set or Task Code Template. A task code template is more complex than a task code set and includes further configuration such as what tasks are in what phases. Select the appropriate set or template from the drop-down list.
- Billing Rules: Select one of the following from the Type drop-down to determine when the client will be billed:
- Event: Client is billed when a specified event happens.
- Select the Event from the drop-down list. If you choose an event that requires further specification, such as End of Phase Code or Milestone, enter the phase/milestone in the field provided.
- Enter a Target Date for this event to occur.
- Enter an Est. Payment Amount and Est. Payment Date.
- For the Issue Interim Invoices option, select Yes or No. If you select Yes, specify a basis for when interim invoices should be issued.
- Number of Days: Client is billed every X number of days (you will need to specify a number).
- Number of Months: Client is billed every X number of months (you will need to specify a number).
- Monthly: Client is billed each month.
- Quarterly: Client is billed each quarter. Determine whether interim invoices will be issued and, if so, select a basis for issuing them.
- 1/2 Yearly: Client is billed every six months. Determine whether interim invoices will be issued and, if so, select a basis for issuing them.
- Yearly: Client is billed each year. Determine whether interim invoices will be issued and, if so, select a basis for issuing them.
- Fixed Amount with True Up
- Event: Client is billed when a specified event happens.
- Pre-payment: If you select Yes for Is pre-payment required?, choose one of the following types of pre-payment:
- Initial: Enter an Estimated Amount and determine whether the pre-payment is applied As Needed or when a particular Event happens. If you select Event, choose the event from the drop-down list and enter an Estimated Date.
- Schedule: Click the Add button to schedule each pre-payment. For each pre-payment, you will need to specify the event that triggers the pre-payment, the estimated amount, and the estimated date.
Invoice Details Tab (Client and Matter Level Only)
On this tab, you can determine who is responsible for payment and enter payment terms.
To determine responsibility of payment and payment terms:
- In the Responsible for Payment field, select Client or Others. If you select Others, click the Add button under the Other Payors list to add one or more third parties who will be paying on behalf of the client. For each vendor you add, enter the Percentage of the invoice balance this vendor is responsible for paying.
- Specify any of the following payment terms that apply:
- Early Payment Due Days: If the client receives a discount for paying early, enter the number of days after the invoice issuance they must pay to receive the discount, then enter the percentage in the Discount field.
- Payment Due Days (Net): Enter the number of days after invoice issuance by which full payment is due.
- Late Payment Due Days: If the client will be penalized (charged interest) if the invoice is not paid by a certain time, enter the number of days after invoice issuance at which the payment would be considered late, then enter the penalty percentage in the Interest field.
- Click Save to apply your changes.
Rate Card & Discount Tab
On this tab, choose the rate card that should be used with this fee arrangement.
To select a rate card for the fee arrangement:
- Select Pre-exsisting Firm Card to select from one of the firm's standard rate cards, or Custom Card to create a new rate card specific to this fee arrangement.
- If you select Custom Card, further options are displayed for New Rate Card and Custom Card.
You can create a new rate card for the matter, or copy an existing rate card.
Note: You can click the Rate Lookup link to view rates for all persons/fee earner classes based on a certain rate card or to search for a particular timekeeper's rate.
- If an additional discount should be applied to the invoiced amount, select Yes for the Plan bottom of Invoice Discount? option. Your next step depends on the Discount Type you select:
- Total Discount: Enter the percentage that should be taken off the invoice as a whole.
- By Phase Code: Click Add to select the phase code that should be discounted, then enter the percentage by which invoices should be discounted for this phase. Repeat until all discounted phases have been entered.
- By Fee Class: Enter a discount percentage for each applicable fee earner class.
- By Fee Category (broader categorization of timekeeper than fee earner class): Enter a discount percentage for each applicable category.
Note: Additional Discount will not be applied for any ongoing budgets.
- Update All Unlocked Budgets & Pricing Models Select Yes to update all unlocked budgets and pricing models associated to this arrangement. Click on the View Unlocked link to view a list all the budgets & pricing models using this arrangement.
Note: This option will only be visible for Arrangements that are used in multiple unlocked pricing models/ budgets and if the arrangement is accessed from the Fee Arrangement dashboard.
- Click Save to apply your changes.
To create a new rate card:
- After selecting the Custom Card radio button, click the New Rate Card link. A New Rate Card pop-up window displays.
- Select the rate card you are basing this rate card on from the Base Rate Card drop-down.
- Select an Action:
- Edit Rules- Set rates, discounts, or rate caps for specific timekeepers or classes of timekeepers. Click Add to add a rule, then enter all applicable information:
- Level- Leave the default of All if this rule should apply to all timekeepers. If it should apply only to a certain Person or a certain Class, Type, or Category of timekeeper, you can specify the person/class/type/category in the field provided.
- Blended Rate- Enter an hourly rate that will apply to all timekeepers included in this rule. If you enter a blended rate, all remaining fields are disabled, as it is assumed that this rate includes any agreed-upon discounts and will be applied regardless of circumstances.
- Discount (%)- Enter a discount percentage that will apply to all timekeepers included in this rule.
- Lock Date- Enter a date at which this rate becomes locked, meaning there cannot be a rate increase.
- Step Up- Select Yes if timekeepers included in this rule should be eligible for a rate increase (e.g., if a third-year associate becomes a fourth-year associate).
- Rate Cap- Enter a maximum rate that can be charged for all timekeepers included in this rule.
- Set Card Level Parameters- The process is the same as editing rules, but these parameters apply to everyone included on the rate card rather than just specific people or classes.
- Set Group Level Discount- A list of timekeeper categories included on the rate card displays. Enter a discount percentage for each applicable category.
To copy a rate card:
- After selecting the Custom Card radio button, click the Copy Rate Card link. A Copy Rate Card pop-up window displays.
- Select the Matter, Client, and Rate Card from the Filter drop-down. Click Save.
Staffing & Expenses Tab
On this tab you can set up certain fee earner classes or time entries as disallowed, meaning the client will not be billed for their work. You can also determine what, if any, expenses will be reimbursed.
To set up a fee earner rule,
- In the Class field, click Add. Select All if this rule applies to all classes, or Specific if it applies only to a certain fee earner class.
- If you selected Specific, choose the appropriate Class.
- Select the Disallowed check box if all work for the selected class should not be billed. Alternatively, enter Disallowed Keywords, meaning that any time entries containing these keywords (e.g., "Travel") will not be billed to the client.
- Click Save to add the rule.
If any expenses will be reimbursed, select Only following or All except following and click the Add button to select the appropriate expense types. When adding expense types to be reimbursed or to be excluded from reimbursement, you can also enter explanatory Notes.
Budget Reporting Tab
On this tab you can enter client requirements pertaining to budget figures and when the budget reports need to be available. The following settings are available on this tab:
- Is a total budget required after matter opening?: If you select Yes, select Days, Weeks, or Months from the When? drop-down and then enter the number of days, weeks, or months after the matter opening that the total budget will be due.
- What is the start date of the client's fiscal year?: Enter the month and day.
- Is a yearly budget required?: If you select Yes, enter the date the budget is due.
- Is a quarterly budget required?: If you select Yes, select Before Start of Quarter or After Start of Quarter for the When Due? field, then enter the number of days before or after the start of the quarter the budget will be due.
- Is a monthly budget required?: If you select Yes, select Before Start of Month or After Start of Month for the When Due? field, then enter the number of days before or after the start of the month the budget will be due.
Click Save to apply your changes.
Targeting Tab
The following settings are available on this tab:
- Planned Total Write-down Hours Percentage: Targeted percentage of hours worked to be written down (not billed to client).
- Planned Total Write-off Amount Percentage: Targeted percentage of amount invoiced to be written off (not paid by client).
- Planned Total Billed Realization Percentage: Targeted realization percentage (billed amount/value of hours billed at firm standard rate).
- Minimum Leverage: Select Yes if a minimum leverage should apply and enter the minimum number of non-Partner hours that should be worked for every Partner hour.
- Amount at which third party invoices should be submitted directly to client: The client will be responsible for paying any vendor invoice at or above this amount.
- Does arrangement require planning?: Select Yes or No.
Click Save to apply your changes.
Viewing Fee Arrangement Use
To see a list of all matters and clients currently using this fee arrangement, click the menu icon in the far right column of the list and select Where Used. A Where Used (Mappings) pop-up displays, with a Matters tab and a Clients tab.
Deleting a Fee Arrangement
To delete a fee arrangement, click the menu icon in the far right column of the list and select Delete. Click OK to confirm.
