Affirm Legal Services Requirements

Effective: July 5, 2023

Affirm, Inc. (“Affirm”) seeks to create an effective partnership with each outside counsel – one that is fair, of high quality, and professional. We expect outside counsel handling our matters to support our company’s business goals. Affirm is extremely sensitive to the amount of fees and costs that may be expended in legal matters and expects outside counsel and other professional service providers to make every reasonable effort to operate as efficiently as possible in order to minimize fees and costs, while providing top-quality legal services. Affirm also finds value in outside counsel that believes that diversity in representation in all forms results in better outcomes. Creating an environment that emphasizes the professional and personal development of diverse attorneys and non-attorneys fosters a culture of inclusion, collaboration and stability. To that end, unless agreed otherwise in writing, outside counsel and his or her law firm, including third-party vendors and consultants (collectively the “Firm”), must adhere to the following billing and diversity commitment requirements (inclusively, “Legal Services Requirements”) when working on all current and future Affirm matters. All service providers should distribute a copy of these Legal Services Requirements to all attorneys, paralegals, litigation support, consultants, experts, billing coordinators, and other assistants working on an Affirm matter. Failure to follow these guidelines may result in invoices being adjusted or rejected.

Diversity and Inclusion

Diversity and Inclusion is a business imperative for Affirm. Affirm heavily invests in its commitment to diversity and monitors its progress closely. Affirm strives to create a workforce that benefits from diverse backgrounds across race, ethnicity, gender, age, religion, sexual orientation, and veteran and disability status. Affirm is also committed to working with its outside counsel to expand opportunities and remove barriers for underrepresented talent in the legal industry.

To this end, Affirm expects that its outside counsel will encourage diversity when assigning professionals to work on Affirm legal matters (which, for this purpose, we define as individuals whose race is other than full white/Caucasian, and/or individuals who have self-identified as female, LGBTQ+, disabled or as veterans). From time to time, we may ask for diversity information about your firm and will track your ability to retain, promote, and staff our matters with diverse individuals.

Staffing Policies

To manage our matters efficiently and cost-effectively, all timekeepers should be appropriately staffed and doing work appropriate for their position. Partners should not bill work that can be done by associates or paralegals; associates should not bill for work that can be done by paralegals.

Affirm expects the Firm will staff the minimum number of timekeepers required to perform the task.

All timekeepers must be approved (by matter) by Affirm in advance of billing. Any new engagement must include a staffing list approved by Affirm. No additional timekeepers may be added without prior approval from Affirm’s matter relationship counsel. Should a timekeeper be replaced, the Firm must substitute him/her with a timekeeper of similar experience at the same or lower rate as the one replaced. Affirm may not be billed for time spent educating new staff or expenses in connection with such activity.

Prior approval is required for: engaging services of a third-party vendor, hiring a consultant, or adjusting staffing that was not previously approved.

Timekeeper Billing Rate Policies

All timekeepers must receive approval, in writing, in advance of billing.

Before performing any billable work, the Firm will provide Affirm with an Approved Rate Card via CounselGo. New matter creation will be delayed if a firm rate card is not submitted. Any rates or services fees that deviate from the Approved Rate Card, including any new timekeepers or timekeeper classifications, must be agreed to in writing before billable work is performed under the engagement. The Firm will discount standard billing rates at least 10-20% as stated in the Approved Rate Card. Any discounts will be reflected on all bills and entered into Affirm’s e-Billing solution in a manner that allows Affirm to track such discounts. The discount must be entered as a line item on all invoices. E-billing information is further detailed below in Time Keeping Practices and e-Billing. 

Requests for rate increases, which must conform to the foregoing requirements, must be submitted no less than 60 days prior to the date on which the Firm seeks to implement the requested rates in writing to the Affirm matter lead and legalops@affirm.com. Rate increases are not effective unless approved by Affirm in writing. Unilateral (i.e., not approved by Affirm) rate increases or retroactive rate increases are not valid and will not be accepted.

In the event of a staffing change, the Firm is not to bill Affirm for bringing a replacement up to speed and Affirm will not reimburse the Firm for time or expenses in connection with such activity.

Time Keeping Practices and e-Billing

Affirm uses SimpleLegal as our e-Billing solution, to make it easier to manage and pay our legal invoices. SimpleLegal provides a vendor portal called CounselGO for your team to submit invoices, check invoice status, and see the matters referred to you. For instructions, please read Getting Started with CounselGO.

All new vendors are expected to provide the name and email of an individual to be made the Main Contact of the vendor’s CounselGO account during the onboarding process. The Main Contact will receive notifications when an invoice is rejected or approved for a lower amount and when there is a request to submit accruals data. New vendors must also provide the names and emails of up to two individuals to designate as Admins of the CounselGO account, allowing them to submit invoices and add additional users to the account. The Main Contact and Admin are not required to be the same user.

Each invoice must have:

• Only one matter billed per invoice

• An itemized and clear description of the work performed

• The rate charged by the timekeeper

• The timekeeper’s name and title

• The client matter ID referencing the matter created in SimpleLegal

• An attached PDF of the invoice

Affirm requires the Firm to submit invoices in LEDES format.

Affirm requires task-based billing codes, for more information please visit UTBMS. 

SimpleLegal will not permit the Firm to bill for unapproved timekeepers or at unapproved billing rates. At this time, this check is conducted during the invoice review process, but Affirm reserves the right to request that vendors provide Affirm with all assigned timekeepers and their rates through SimpleLegal for approval.

Time must be billed in units of one-tenth (1/10) of an hour. Block billing is prohibited and block- billed entries will be rejected. Time may be billed only for Affirm approved and necessary tasks, with hours appropriately allocated to the correct matter. Time entries must provide a clear and appropriately detailed description of work. For additional detail regarding non-reimbursable time and expense items, see Attachment A: Non-Billable Time & Expenses.

All invoices will be reviewed and adjustments may be made for time and expense entries that are not in conformity with the Legal Services Requirements or are otherwise deemed to be inappropriate, unreasonable, or unnecessary.

If the Firm seeks reconsideration of adjustments to an invoice, the Firm must submit such a request to Affirm, in writing, with additional information that supports the request. Such a request must be made within 30 days of the date on which the adjustment was made in the e-Billing system. No further requests will be considered.

Fees

Alternative Fee Arrangements

Affirm believes that pushing past traditional methods of billing based on an hourly rate and instead of working towards alternative fee arrangements (AFAs) will lead to a longer, more engaged and predictable relationship with outside counsel. AFAs give outside counsel greater flexibility and reduce the administrative burdens for both Affirm and outside counsel. Affirm values AFAs because they focus on efficiency, effectiveness, while still giving outside counsel the ability to demonstrate its expertise and commitment to Affirm’s business. 

Affirm requests that outside counsel consider providing a fixed fee or other alternative billing proposal, as the primary method of billing against a matter. Some possible AFAAs that Affirm desires you to consider, depending on the matter, are flat or capped fees, blended rates, contingency fees, phased fees or success fees. We look forward to your proposals. 

Hourly Fee Arrangements

If it is not possible to put in place an AFA and you are resorting to hourly rates, Affirm expects to be charged the lowest hourly billing rates provided by the law firm for work of a similar nature provided to other public technology companies.  

Budgets

Budgets will be established by the Firm and Affirm’s matter relationship counsel in all matters unless otherwise specifically provided in a separate, mutually executed agreement. Payment will not be made for any work performed unless the Firm submitted the budget through CounselGO and Affirm’s matter relationship counsel approved the budget (and any increase to the budget) through SimpleLegal in advance of the work being performed. The Firm and Affirm’s matter relationship counsel will have regular conferences to ensure work is being efficiently performed and is aligned with strategic goals. Any budget must set forth major assumptions, conform to the matter strategy provided by Affirm’s matter relationship counsel, and estimate the cost of each phase of the matter. An updated budget should be prepared annually, or after the completion of each phase. Budgets are unnecessary for matters associated with alternative fee arrangements (“AFAs”).

All litigation matters will require use of a budget, unless otherwise noted by Affirm. Affirm reserves the right, at its sole discretion, to require AFAs for litigation or discrete advice projects. Affirm recognizes that the actual cost may vary from the projected budget as a result of circumstances beyond the Firm’s reasonable control. The Firm must advise Affirm as soon as it becomes aware of any such deviation from its submitted budget by providing a revised budget with the justified reasons. Actual changes to any budget must be approved by Affirm’s matter relationship counsel. 

Invoicing and Late Penalties/Timing of Bills

Unless otherwise specifically set forth in a mutually executed agreement, outside counsel must submit all invoices for work performed in a month no later than the last day of the calendar month after the month in which the work is performed (the “Due Date”). The Firm must submit invoices for time and expenses on a monthly basis no later than 30 days after the month in which work was done. For example, invoices for March charges must be sent to Affirm by April 30^th. Late invoice submissions will follow the Affirm late invoicing section below and may result in amounts being discounted or non-payment. Unless otherwise expressly outlined in a mutually executed agreement between the parties, all invoices should reflect Net 45 payment terms. For the avoidance of doubt, specific invoicing and payment terms set forth in a separate and mutually executed services agreement between the parties will control in the event of a conflict between such service agreement and this Legal Service Requirements agreement. 

Payment will be made in full electronically through Affirm’s payment management platform, Coupa. New vendors will receive an email from Coupa during the onboarding process. The email will be sent to the billing contact provided by the Firm on the signature page. The Firm must load their banking information onto Coupa to allow for payment from Affirm. Instructions on how to do  so may be found here. Any questions regarding Coupa and payment status may be directed to  coupa-help@affirm.com.

All charges incurred in the invoice month for the matter must be submitted in one invoice. If the Firm fails to submit its bills on a timely basis, the firm should not request or expect that Affirm will expedite payment to account for the firm’s failure to submit timely bills.

Affirm requires the Firm to notify simplelegaladmin@affirm.comthat a matter has been closed as soon as practicable, but no later than ninety (90) days after the matter has concluded.

Late Invoicing 

Affirm will discount every invoice by 5% per month that the invoice is late up to a maximum of 15%  if it is received after the Due Date following an initial courtesy email encouraging on-time billing. Affirm has no obligation to pay for any invoices submitted more than four (4) months after the completion date of a matter. 

Expenses

Affirm will reimburse the Firm for the following expenses only. As a general rule, prior approval should be obtained before incurring extraordinary expenses or expenses in excess of $500. Receipts are required for all expenses over $200 for which you seek reimbursement. All receipts must be properly itemized and attached to an Expense Report form. Attachment A to these Legal Services Requirements sets forth additional details regarding certain Non- Billable Time & Expenses.

Photocopying, Faxing, or Scanning: Affirm will not pay for internal photocopying, faxing, or scanning. External copying must be approved in advance by Affirm and is reimbursable only at cost, not to exceed $0.08 per page for copies and $.25 per page for photocopies. Your invoice must identify the number of copies and the total amount being billed for copying.

Mail: Messengers or overnight express delivery services should not be used except when a compelling reason exists. When used, the Firm should always use the most cost-efficient method.

Travel: Travel should be undertaken only when necessary and only by the appropriate number of attorneys (usually one, unless approved by Affirm’s relationship matter counsel). Business class is appropriate only for intercontinental flights in excess of six hours. Firms shall use their best efforts to obtain the lowest available airfare and car rental rates. Back-up documentation for travel expenses must be provided by the firm whenthe invoice is submitted.

Third-Party Expenses: The Firm must obtain prior approval from Affirm’s matter relationship counsel for any retention, payment or reimbursement of third parties (excluding transcript expenses), including experts, local or other counsel, and consultants. Third parties should receive a copy of the Affirm Legal Services Requirements and work performed must be in compliance with these Requirements. Invoices for third- party expenses, other than local counsel, should be paid by the Firm and included as a line item disbursement on the firm’s invoice to Affirm. Local counsel is expected to submit invoices through Affirm’s e-Billing system in accordance with these Legal Services Requirements, unless instructed otherwise by Affirm or by the Firm with whom the local counsel firm is working on the particular matter.

Back-up documentation for third-party expenses submitted by the firm must be provided by the firmwhen the invoice is submitted. We expect that the Firm will review these bills, ensure compliance with Affirm Legal Services Requirements and submit for payment only reasonable costs and fees for work incurred.

The firm is not authorized to approve billing rates for third-party timekeepers such as experts, local or other counsel, and consultants. Billing rates for such third parties must be submitted to Affirm for approval.

To the extent possible, the Firm will manage costs associated with various legal service providers (e.g., eDiscovery, temporary legal services, etc.).

Back-up materials for expenses: Back-up documentation for non-travel expenses over $200 must be submitted with the invoice where the charge occurs. Back-up documentation for travel-related expenses and third-party expenses (e.g., experts), regardless of amount, must be submitted with the invoice where the charge occurs. All other back-up expense documentation is to be retained by the firm for a period of one year following conclusion of the matter and is to be made available to Affirm upon request.

Overpayments

Duplicate payments are to be refunded immediately by check to Affirm and NOT applied to current charges unless approval is given by Affirm’s relationship matter counsel to apply the payment to the current charges. This decision is at the sole discretion of Affirm’s relationship matter counsel supervising the matter. The refund should be accompanied by a letter identifying the check, the invoice number, Affirm matter name and matter number. If approval is given for application to current charges, unless instructed otherwise by Affirm’s relationship matter counsel, the refund should appear as a separate line item on the next subsequent bill for the same matter, identifying the invoice from which the refund is due.

Certification

Affirm views every bill from the Firm as a certification by the firm and the relationship partner that the legal services and disbursements reflected on the bill are reasonable for the matter, the proper provision of legal services, and are compliant with Affirm’s requirements.

Other requirements

Affirm may find it necessary to impose other requirements or policies during the engagement as appropriate to manage the matter properly. Prior notice will be given and the new requirements/policies will be discussed with the Firm.

ATTACHMENT A – NON-BILLABLE TIME & EXPENSE DETAILS

TIME CATEGORIES: Below are examples of the types of tasks for which Affirm will not reimburse the Firm. This is a representative list of non-billable tasks and is not exhaustive.

EXPENSE CATEGORIES: Below is a sample list of expenses for which Affirm will not reimburse the Firm.

At the center of matters are the broader business goals of Affirm. In addition to well defined legal strategies, successful firms will embed the business principles of organizational effectiveness and operational efficiency in their work plans and teams. The Firm must always strive to achieve our desired results while taking steps to minimize costs to achieve these results.

Key Elements to Effective Management of Cases and Controlling Costs