As you probably know, the future is very hard to predict. Lawyers stuck in the hourly-billing model don’t really care about the future, because they are just focusing on doing the work and billing the client for the time they spend on a matter. Did a lawyer zone out for 10 minutes while working on your matter? We are human, so we would be lying if we said we are always 100% laser focused and impervious to distractions. Nonetheless, you will never know, but you will probably pay for the time spent re-focusing and picking up where that lawyer left off.
With fixed-fee and value-based pricing, we have agreed on a price ahead of time and the future is fairly certain (subject to certain issues that we uncover that may be outside the initial engagement). That means, if we get distracted or zone out, you don’t pay for that, we do. It means we are now incentivized to be efficient and make sure we deliver on what is promised.
Might you end up paying more with fixed fees, possibly, but you have to weigh the advantage of predictability and aligned incentives versus being billed for a matter where the end cost could be 5x what you budgeted.
Founder of Carbon Law Group, Pankaj Raval has been practicing intellectual property and corporate law for ten years. He has worked with budding entrepreneurs, startups, and fast-growing companies. He takes a special interest in helping his clients solve challenging legal and business problems in an effort to build their ventures and make a positive impact on society.