When flat or fixed fees started to be bantered about in the last few years, partners in several of my firms said: “Won’t work for litigation, since it is too unpredictable.” Well, welcome to the new world.
A recent article by Catherine Ho that appeared on The Washington Post’s “Capital Business” raised the question about the death of the billable hour. She pointed out that five years ago only 28% of law firms “believed that non-hourly billing would be a permanent change in the legal industry.” That is according to the Altman Weil’s “2013 Law Firms in Transition” flash survey. In 2013, that percentage had grown to 80%. Amazing, even though there are those (yours truly being one of many) who believed that it was a definite trend just waiting to be fully realized.
Ho also pointed out how some large firms – Holland & Knight and McDermott Will & Emery – “have even ditched the billable hour model altogether for entire teams of people.”
What is the point? you may ask. The point is that offering fixed fees is smart marketing. Firms that do will have an advantage over law firms that don’t. Those that won’t offer fixed fees may just be sending a message to potential clients that includes: (1) we may not have enough experience in the practice area to predict how a case is likely to proceed, (2) don’t have a history of similar cases so we don’t know how much it will cost, and (3) are not willing to share in the risk.
So, law firms that are prepared to offer alternative fees, including fixed fees, have a jump on the competition IMHO.