Primary reasons why you need to implement fixed fee billing

Written by Erika Winston

5 min read

Gone are the days when the billable hour controlled the practice of law. In large numbers, attorneys have turned to alternative billing options when seeking compensation for their legal services. While these wise lawyers recognize the numerous benefits of implementing fixed-fee billing arrangements, many law firms continuously resist this industry-wide movement. So, in an effort to help these lawyers see the light, I have come up with this list of some primary reasons why your law office needs to implement fixed fee billing.


A Profitable Set-Up

When implemented correctly, flat fee billing is all about planning and proactive measures. To set appropriate fixed fees, an attorney must take a close look at previous matters. For example, let’s say a new client needs assistance with a contract dispute. In order to quote a fixed fee that adequately compensates you for your efforts, while also providing the client a fair and appropriate price, you need to carefully consider what tasks would go into this type of matter.

If you’ve handled a similar contract dispute in the past, you will want to look back at the file to review the required tasks and how long each of them took to complete. If this is a new practice area for you, you will want to do your research and possibly solicit some advice from a mentor or other practitioners with more experience in this area of law. Armed with this information, you can make an educated decision about an appropriate fixed fee for the new matter.

This preparation can translate into law firm profits because you are essentially taking a proactive look at the pending case to prevent wasted time and uncompensated tasks.  TimeSolv time tracking and legal billing software helps with this task. With more than 30 reporting options, you can quickly and easily review previous contract dispute matters to ensure the efficiency and promote maximum profitability for this new case.

Benefits of Fixed Fee Billing

Happy clients, happy practice

Billing is one the most common sources of contention between attorneys and their clients. From unanticipated expenses to larger than expected invoices, financial disagreements can lead to unhappy clients, and even lawyer grievance complaints. How would you feel if you received an invoice that billed you double the amount that was quoted to you? I feel confident in assuming that you wouldn’t be happy and would probably complain. These types of disputes can breed distrust between you and your client. They can also lead to a negative reputation for your law firm.

Fixed fee billing can effectively reduce the risk of client disputes and grievance complaints. These arrangements strengthen the attorney-client relationship in the following ways:

  • Upfront review of the case forces the attorney to take a real look at what is truly necessary to advance the client’s goals
  • With a detailed view of the matter, you can give the more consideration and time to the tasks that are most relevant to successfully concluding the case.
  • Your firm members can have substantive conversations with potential clients up front to explain the matter and provide a flat fee amount. This lessens back-end surprises and helps to strengthen the client’s confidence in your firm.


Moving the case along

While hourly billing is a staple of legal practice, it can be somewhat counter-productive for the advancement of the client’s interests. When billing by the hour, all tasks provide value to the firm, whether highly necessary or just minimally connected. For example, a law firm partner may assign unlimited hours to an associate for research about some aspect of a property dispute that is only slightly relevant to the case, even though spending substantial hours on the issue does not further the client’s overall goal.

With fixed fees, there is an incentive to move the case along, instead of spending wasteful hours on lesser productive tasks. Since it is in the firm’s best interest to timely complete the matter and move on to additional cases, tasks that actually advance the case receive the most attention. Let’s take another look at the property dispute. Under an hourly fee arrangement, a longer case equates to a higher fee. So, an associate may spend numerous hours researching one particular issue that is only slightly relevant to the case. While she is busy conducting unnecessary research, a third party unexpectedly comes in and makes a claim that would have been without merit had the matter been completed in a timely manner. How would your client likely respond? You may have just lost repeat business from a lucrative client, received a negative review in the community, and put yourself in danger of receiving a complaint with your state Bar.

With fixed fee billing, you would assess the needs of the case prior to commencement. Therefore, you would have a greater understanding about what is necessary for successful completion. This prior assessment would alert you to the fact that in-depth research into the property issue in question is not necessary for progression of the case. Therefore, you know that it is counterproductive to spend any significant amount of time on it. You instead work efficiently to complete the necessary duties and settle the dispute before the third party can come in and undermine your client’s interests. With a flat fee, the amount of payment is predetermined, so whether the matter takes 15 hours or 45 hours, the firm is compensated the same.


What are you waiting for?

These are only some of the valuable reasons why your law practice should implement fixed fee billing. If you are still unsure, why not start with some of your smaller matters, such as uncontested divorces or misdemeanor criminal cases? Don’t forget to review and prepare before quoting a fixed fee – and use TimeSolv for the reporting capabilities you need to establish a fixed fee rate that you can trust to properly compensate you, while adequately providing for the client’s best interests. Click here for a free TimeSolv trial.

Benefits of Fixed Fee Billing

About Erika Winston:

Erika Winston is a freelance writer with a passion for law. Through her business, The Legal Writing Studio, she helps legal professionals deliver effective written messages. Erika is a regular contributor to TimeSolv and a variety of other publications. 

Subscribe to

our Newsletter

Stay up to date with the latest
articles, educational resources, and news.