How does the PFAF Model work?

The PFAF Model charges you a fixed annual fee for typical corporate/commercial and litigation legal services.

PFAF Annual Fee
The PFAF Model is a subscription-based payment system under which Procido LLP will provide typical corporate/commercial and litigation legal services for a fixed yearly amount. Based on our review of your past legal invoices, we will provide a detailed list and description of legal services we consider typical in advance of commencing the PFAF Model. Limitations apply on what are considered typical legal services which are described further below. However, the PFAF Model is flexible and can accommodate all types of clients with ongoing legal needs from across multiple locations and in different industries.

The PFAF Model works like this:

  1. You upload or email us all your invoices for legal services for at least the past 3 complete years;
  2. We review your invoices and then generate a list of typical legal services we believe you will require in the next year – we review, discuss, and tailor this list of typical legal services to your specific requirements;
  3. We then add up all the invoices and calculate the amount of money spent on legal services in each of the past 3 years;
  4. We then calculate your average annual spend on legal services and reduce this average amount by 10% – this is your PFAF number;
  5. Your PFAF number represents your initial PFAF Annual Fee we charge you for the next 12 months.

Payment of your PFAF Annual Fee
Payment of the PFAF Annual Fee can be done one of three ways (upfront, bi-annually, or monthly):

  1. You pay the full 12-month PFAF Annual Fee upfront. We will hold these funds in trust and will pay them out on a monthly basis based on 1/12 of the PFAF Annual Fee;
  2. You pay in installments every six months, in advance. In this case, you would pay 1/2 of the PFAF Annual Fee, up front. Such fees would be due on the 1st day of the first and 7th month for the term of the retainer agreement. We will hold these funds in trust and will pay them out on a monthly basis based on 1/12 of the PFAF Annual Fee;
  3. You pay on a monthly basis. In this case, you would pay 1/12 of the PFAF Annual Fee. Such fees would be due on the 1st day of each month for the term of the retainer agreement. For this option we would require one month’s fee deposited into trust as the Initial Retainer, which we will hold until the end of the solicitor-client relationship or any other such time as agreed upon by the parties.

Accounts
Under the PFAF Model you will not receive detailed account statements. Instead, you will receive a basic monthly account statement providing: (i) the monthly subscription amount; and (ii) a list of your matter or matters on which work was provided that month. We will not itemize daily work nor will we itemize the individual time entries each day. It is assumed that we have been conducting all typical legal work that has been agreed in advance to be provided as part of the PFAF Model.

Annual Increases
The PFAF Annual Fee is only fixed for 1 calendar year. However, at Procido LLP, when providing high quality legal services, we aim to provide clients with as much cost certainty as we can for as long as we can. As with all legal fees, such as those provided for under the Billable Hour Model, annual increases are a necessity so that we may account for inflation and pay increasing expenses to grow our team to provide you with additional legal services. To provide this longer term cost certainty to our clients, we have determined fixed percentage increases in advance depending on the number of years you commit to – the longer you commit to the PFAF Model, the better the rates we can offer as that gives us certainty on our revenues. Annual increases to the PFAF Annual Fee will occur January 1st based on the length of the subscription term agreed to in advance, as follows:

1 year subscription (i.e. year by year)2 year subscription3 year subscription
End of year 115%10%10%
End of year 220%15%10%
End of year 320%20%15%

Limitations
While the intent of the PFAF Model, and the Procido LLP’s goal, is to move away from the traditional billable hour model, and to provide more certainty to clients regarding annual legal costs to allow clients to stay on budget, Procido LLP does not provide unlimited legal services under the PFAF Model. There will be a limitation on the amount of both litigation and transactional work that is provided under the PFAF Model. Typically, the following are not included:

  • transactions to purchase or supply goods and services exceeding One Million Canadian Dollars ($1,000,000); and
  • litigation for claims, whether the Client is the plaintiff of defendant, exceeding Five Hundred Thousand Canadian Dollars ($500,000).

For these items that fall outside the scope of the PFAF Model, and/or are not included in the agreed upon list of typical services to be provided under the PFAF Model, fees will be determined using the flat fee model, unless the Client prefers the billable hour model.

The PFAF Model is intended for clients with a minimum requirement for legal services and is not designed to allow clients to obtain legal services they may not otherwise wish to pay for. Therefore, in order for clients to take advantage of the PFAF Model, there is a minimum PFAF Annual Fee of $36,000 / year or $3,000 / month.

To make the process easier and more efficient (and to get to know you and your business better), we are planning PFAF Model intake days in-person in our offices in Saskatoon, Calgary, and Toronto. Watch the News section of our website for further details on dates and times.

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