Orrick Herrington & Sutcliffe has signed a deal with client Levi Strauss that is the firm's broadest alternative fee arrangement ever, reports The Recorder.

Orrick will handle all of Levi Strauss's legal work worldwide in exchange for a fixed yearly fee paid in monthly increments.

Levi Strauss will retain just one other firm, intellectual property specialist Townsend and Townsend and Crew, to continue its brand protection work. Where Orrick does not have an office, the firm itself will retain and pay outside counsel.

Orrick partner Karen Johnson-McKewan has worked closely over the last year with Levi Strauss general counsel Hilary Krane to iron out the details of the multimillion-dollar arrangement. They agreed to a contract in May, and since then 116 Orrick lawyers in seven different countries have worked on matters for the clothing company.

"The only way to make it work is to be open and flexible with the issues as they come up," Johnson-McKewan said. "The core principle that we are operating with here is that we're trusting each other. We all are committed to doing whatever we can to make it work. We know there will be bits and pieces where it may not."

Alternative fee billing has been a buzzword for decades, but many believe the financial downturn has finally given the trend some teeth.

The responsibility for determining how much Orrick charged for its work was given to David Fries, a non-practising lawyer and a member of the firm's management team.

Fries, who was a partner at Orrick during the 1990s, rejoined the firm as a consultant in 2006. Earlier this year, the firm made him its full-time chief client relations officer, with a large portion of his time spent advising partners on alternative billing.

"We looked at applying the most basic client relationship management practices of other industries to the law firm," Fries said. Prior to 2006, he was an executive at a public company that decided to orient itself more to understanding its customers' "points of pain," a concept he brought to Orrick.

"Very rarely do lawyers ask their clients, 'What is the approach you want me to take? Here are two options: I can treat this like it's the most important case in the world, put 10 people on it and it will cost X. Or I can do it differently,'" Fries said. "It's understanding the objective of the clients, and that involves deep dialogue. This is something customers and suppliers do in the rest of the business world."

Orrick declined to disclose how much Levi Strauss would pay it, or how much it expects to save the company.

The Recorder is a US sister title of Legal Week.

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