Moving to Fixed Fee, Flat or Value Pricing: The Basics

Tired of pouring over time sheets and hours every month? Endless invoice negotiations with clients wearing you out? Many firms have left the billable hour behind and moved to a flat, fixed fee or value priced model. While this model might not be a perfect fit for everyone it is suitable for numerous areas of practice.

Today I’ll share areas you’ll need to evaluate to determine your firm’s potential for these models and the steps you can take to begin your transition.


It is critically important that you know or can at least estimate the average amount of time it takes you to complete a task, or series of tasks. If you are not already tracking time, do so for at least a month or a few cases to accurately gauge the time and effort it takes to execute. This includes emails sent from your couch, car ride client calls, and late night legal research.


Once you are confident in the average amount of time for each type of task or matter, add in the expenses. Really think about anything you may incur while delivering this particular service. Filing fees, court costs, parking at the courthouse, credit counseling, debtor education, etc. Planning for these now allows you to present a very clear and salable picture to your client, and avoid invoice surprises later.

Identify Common Patterns

Do you find yourself manually filling out forms or paperwork that could be automated by technology or outsourced to a virtual paralegal or support person? Small firms need to take advantage of the technology resources available to stay competitive and achieve sustainable margins. There are inexpensive solutions for document assembly, templated forms, including free do-it-yourself intake questionnaires in Google docs, which can be exported into Excel, or using a client portal to offer 24 hour options to clients who need to complete documents.

Define the “True Value” of Your Services

What’s the value a bouquet of flowers & Chinese take-out has when delivered to a mom on the edge of a kid-induced breakdown? Pretty priceless.

The cost of the services shouldn’t always drive the price of a legal matter. The value and long term peace of mind that properly delivered legal services can bring to a client should play a part in pricing. Yes it’s possible for a client to self-file Business Incorporation paperwork with the help of Legal Zoom, or templated documents they find online, or a kit from Staples. But when a lawsuit arises, partners bump heads, or a potential acquisition is on the table, it comes down to the initial planning, forethought, experience and insight the authoring attorney took into consideration when the agreement was drafted. The outcome is what we all focus on, as should you when you are explaining what is different between your $1500 start-up package, and the $175 bundle they saw online. (Should the potential client decline, feel free to remind them that your firm will still be here if something goes wrong. However rates for clean up are billed on an hourly basis.)

First Draft Pricing

Build your pricing menu. This will be a first draft, list a low end price, and a high end price for the same service. Why? Because it could potentially increase sales if clients have 2 options. When they decline the first, you can combat it with a second lower price, which may require them to participate in the process more or less such as completing forms, self-filing or communicating with you primarily online, while a higher fee offers in office meetings, phone calls, full service preparation, filing, and court costs. Multiple flat fee options allows you to capture business from both ends of your customer spectrum. Tiered pricing options have worked well for Carpenter Law P.A., a Kissimmee, Florida based Family Law firm who offers both full service and less expensive online legal options to it’s clients. Also read Jay Sheperd’s How to increase revenue 43%.


A commonly overlooked set of expenses, at any given time you should know what it costs you to operate your business. As a business owner it’s easy to commingle your personal and professional life, for most of us, there doesn’t seem to even be a dividing line. Your quality of life is an important factor to consider when pricing services, and a good way to do ensure you won’t have to worry is to account for everything; gas, cell phone, home internet, credit card interest, insurance (car and business) the coffee you had this morning, absolutely everything.


Carefully review your numbers and measure your margins. Next multiply the number of cases or services you estimate the firm will deliver in a given month by the lowest price you’ve determined you need to charge, minus expenses and overhead.This is not the number of cases you think you can get if the stars align and you get a celebrity endorsement that month. The final number provides projected revenue for the month. Are you comfortable with that number? If not play with it, move some prices up. Look for ways to shorten the preparation time necessary for cases, maybe document automation or providing intake forms to clients to speed up the consultation process.


Review your margins & overhead. Do your figures work with the first draft of your pricing guide or fee chart? Are you comfortable with your projected revenue and feel there’s enough profit to set some aside for extra marketing, or a rainy day?

Remember you can always test this pricing out with potential new clients and adjust it as you go. The transition is a process and will most likely never be complete and prices are rarely ever set in stone. Client situations are all different, and if you feel you need to charge extra to accommodate the nervous late night phone calls you know you’ll receive, raise it. Maybe a year later you’re running efficiently and have streamlined to the point you can offer packages, or incentives to new clients to generate additional business. These new pricing models are exciting and lend themselves to endless options with less headaches, take advantage, try them out and remember never to sell yourself and your expertise short.

When complete you can use your pricing menu as an internal pricing cheat sheet, or publish your rates on your website. Check out the presentation of fees by these pioneering law firms:

Still unsure if flat fee & value pricing is for you? Review some of these post for some pros & cons of alternative billing models.

From @ABAJournal | ABA

From @Lawyerist |

From @JayShep | |

From @MattHomann | |

Please share your billing successes and experience with alternative fees with us!