When is a fixed fee not a fixed fee?

Pricing is our penultimate session in The Legal Mini-MBA, partly because of the alliteration, but mainly because there's some hard yards to cover before we get to it

What are you trying to achieve, what sort of clients are you targeting and what services are you offering all need considering before working out how to price those services, for those clients, and to meet those aims

Reflecting on the conversations in the pricing sessions over the past couple of weeks, most groups came to a similar issue around hourly rates vs fixed fees

Not in advocating for one or the other, or even the impact of AI (although that did come up), but rather an acknowledgement that it's not all that clear cut

When a lawyer provides an 'estimate', the client might hear 'fixed' or 'capped' and each of those create a very different dynamic when it comes to communicating progress, under- or over-runs, and billing throughout and at the end of the matter

That mismatch in expectations can create friction and, beyond the immediate problems of write offs or not capturing value in £ terms, it can also be damaging to the wider relationship with the client

In some cases, it may be best to bite the bullet and fix the fee, having done a bit more work upfront in scoping the matter

In other cases, it may be best to establish regular reporting against the estimate early on in the matter to flush out any differences of opinion on estimate vs fixed

I have a different soapbox to climb on regarding fee caps, but probably best to park that one for now 🙂

In any case, really good discussions around pricing recently and looking forward to wrapping up this term with legal Operation

When is a fixed fee not a fixed fee?