Aligned Incentives & Cost Safety

How structural fee design affects litigation behaviour.

Published: 7 July 2024 | Reviewed: 15 February 2026
(3-minute read)

The Incentive Question in Litigation

In most civil litigation, lawyers are remunerated either:

• on an hourly basis, or

• under conditional cost agreements tied to outcomes.

Under hourly structures, revenue increases as work increases.
When settlement work and trial preparation are performed within the same retainer, financial incentives and early resolution do not always point in the same direction.

This is not a question of integrity.
It is a question of structure.

Clean Law was designed to separate these incentives so that cost control does not depend on personal restraint.

Clean Law’s Structural Incentive Design

Clean Law operates through three mechanisms:

1. Fixed-fee settlement and escrow oversight

2. Separation between settlement and trial advocacy

3. A results-based bonus linked only to avoided trial costs

Each mechanism affects behaviour in a specific way.

Alignment One: Fixed-Fee Escrow Oversight

Clean Law charges a fixed fee for settlement strategy, timing control, and escrow supervision.

Because that fee does not increase if a matter extends:

• we do not earn more from delay

• we do not benefit from scope expansion

• we do not profit from escalation

Escrow requires client approval before funds are released and before new stages begin.

This places cost authority with the client rather than within the billing structure.

(See Escrow and Switching Flexibility for operational detail.)

Alignment Two: Separation of Roles

Clean Law does not conduct contested hearings, draft pleadings for filing, or brief counsel in substantive litigation.

Those functions are performed by the client’s separately retained courtroom lawyer.

If a matter proceeds to trial, the trial lawyer earns the trial fees.

Clean Law does not.

This structural separation removes financial incentive to recommend litigation for revenue purposes.

(See Advocacy Boundaries & Independence Policy for scope limits.)

Alignment Three: Results-Based Bonus Linked to Avoided Trial Costs

Clean Law earns a results-based bonus only when early settlement demonstrably avoids projected trial costs.

The bonus is calculated against avoided trial expenditure - not against damages and not as a percentage of recovery.

If no trial costs are avoided, no bonus applies.

This means:

• early resolution aligns with our remuneration

• delay does not increase our fee

• escalation does not increase our fee

In practical terms: if the matter expands without necessity, our workload increases while our fee remains fixed.

Why These Mechanisms Matter

Taken together, these safeguards mean:

• settlement incentives and remuneration move in the same direction

• trial advocacy remains independent

• early trial preparation cannot begin without client approval

• funds remain visible and controlled through escrow

• mobility between courtroom lawyers remains intact

Cost safety therefore arises from structure, not assurance.

Bottom Line

Two independent lawyers often cost less than one because the matter funds only the path it actually takes.

The objective is not to criticise existing models, but to provide an alternative structure where:

• delay does not increase Clean Law’s revenue

• litigation does not increase Clean Law’s revenue

• early resolution aligns with both client and firm interests

Cost control becomes structural. Integrity follows from alignment.

By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)

Prepared in accordance with public-interest governance, annual Law Society trust-account audits, and ACNC-reported standards.

Disclaimer: General information only. Not legal advice.