Do what the Ambrose Law Group of Portland, Oregon did. Switch to flat fees.

I first reported on the Ambrose firm last October in the context of the Fortune Small Business’ free makeover offer the firm took advantage of. As part of that makeover, the firm switched to flat fees for transactions and some aspects of litigation. My earlier post quoted David Ambrose as saying that getting away from the billable hour was “better for clients and better for us.”

He didn’t say just how much better it was for the firm, but a recent article by Sandhya Bathija on’s Small Firm Business does. Apparently, the firm reported “a 90 percent increase in profits” as a result of their switching to fixed fees.

So, what are the advantages to flat fees (I mean other than that increasing “profits” thing):

  • Clients are happier knowing up front what their matter is going to cost them,
  • More clients will be attracted to the firm (thanks to the word-of-mouth effect from those happier clients), and
  • As a result of technology gains, the firm is more efficient as a result, and repeat matters take less time (but firm can charge same flat fee vs. a fraction of a billable hour), which of course brings us back to that profit thing.

Naturally, in order to establish flat fees, a firm has to understand and capture the costs of similar matters it has done in the past, in order to set a profitable fee in the first place. Are there risks? Sure, but in light of one firm’s experience and the other advantages mentioned, it seems to me that flat fees are a no brainer.

Thanks to the posts on  Law Practice Management and Ed Poll’s for steering me to the current article.