Benjamin W. Heineman, Jr. and William Lee, both veteran lawyers by anybodys measure suggest that now is the time to look at moving toward “fixed fees” for some but not necessarily all legal matters. Of course, we know that attorneys got into the hourly fee game because years ago in a effort to track costs of delivery of services attorneys began tracking hours. From then on, the genie was out of the box, seemingly never to be put back in again.
Then comes a major, major recession that reaches way down (or is that way up) to the legal profession. Clients are scrutinizing bills more carefully, requesting budgets on the front end, and even making selections of counsel using pricing as a major factor.
The article which can be found here gives a number of guidelines if you are thinking of looking at a fixed fee model.
Here’s the key, (and they’ve hit it on the head):
“As in all business, a total price for a matter or a book of business is built up from costs (and, at times, also derived from the significance of the matter).”
So in order for you to know whether you could go fixed fee, or even whether you should, you’ll need a good and reliable understanding of your costs of delivery. This is the place to start.
It’s clear to me that if your practice contains work that is reasonably predictable in effort and value, a fixed fee model should be considered. Again, however, you’ve got to know your costs.