between sneaking suspicion & absolute certainty.jpeg

This discussion continues to populate discussion threads on a number of LinkedIn lawyer groups. Comments are coalescing around two polar views: 1) It's necessary; 2) "Calculating a fixed fee is difficult. Ergo, we can't or shouldn't do it, or be expected to do it." Here's a representative example of the latter:

"It is extremely difficult in litigation cases to give fixed fees where there is the potential for appeals or pre-hearing meetings which may or may not take place."

That's akin to saying, "It's hard to eat right, exercise and stay fit, because there are so many variables such as travel, illness, long work hours, etc., so I won't." That's certainly an option, but ultimately, there'll be a price for you to pay.

Clients want legal service cost predictability, not arguments about why they can't have it. IMO, the intellectual energy that lawyers spend defending hourly billing would be better applied to viewing the topic through a different lens, specifically, one in which hourly billing isn't an option, forcing you to come up with alternatives.

For example, what if, by legislative fiat or massive client collusion, hourly billing was to be completely eliminated by Jan 1, 2014? Under such conditions, lawyers would immediately redirect their intelligence and creativity away from attempts to justify hourly billing in favor of figuring out how to thrive once it's no longer an option.

Clients are moving inexorably toward greater cost certainty which makes hourly billing anathema. You have two choices:

  1. Trail the trend, dragged kicking and screaming by clients, giving them good reason to resent your recalcitrance, and convincing them that you care more for your convenience than their business needs. 
  2. Lead the trend, declaring to clients your eagerness to help them achieve the greater cost certainty they want, while acknowledging that this is a new area for you and asking them to do this cooperatively, with client and outside counsel sharing the risk of innovation as you both traverse the learning curve.

Clinging to hourly billing simply because the alternative is difficult sends a message that can't possibly endear you to any client.

Mike O'Horo

Want to learn how to have a fixed-price discussion with a prospect or client, in which they share the risk of the estimate's accuracy? Take a look at A Collaborative Approach to Pricing. It's a litigator's dream.