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Fixed fee billing is on the rise
Fixed fee work has increased by 34%
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Client demand is high
71% of clients want to pay a fixed fee
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Firms are more efficient with fixed fees
Sole practitioners are increasing their technology spend at 2x the industry average
“Fixed fee billing can help law firms maintain pricing and revenue for individual cases while creating more predictability for revenue-generating work”
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Law firms are doing more fixed fee work
Firms are logging 34% more billables on a fixed fee basis compared to 2016. Altogether, fixed fee cases are worth an average of 20% more since then.
While AI automation stands to reduce the value of hourly billable work, shifting to fixed fee billing can help firms create more predictability and transparency in pricing for both firms and their clients.
Clients prefer fixed fees
71% of clients prefer to pay a fixed fee for their entire case, and 51% want to pay fixed fees for individual activities within their case. Still, hourly billing is the most common, offered by 71% of law firms.
“Paying by fixed fee is the most preferred way to pay for legal services among clients.”
Firms get fixed fee bills out quicker
Firms billing with fixed fees are over five times more likely to get bills out almost immediately.
Firms get fixed fee bills paid quicker
Law firms billing with fixed fees are nearly twice as likely to collect payments right away.
However, fixed fee bills are also more likely to go unpaid over time—which is an area firms should focus on improving.
Read more on the advantages to fixed fee billing in law
Download the full analysis on fixed fee billing to get:
- Practice-area breakdowns on which types of firms are more likely to offer fixed fees
- Highest case values by practice area
- Insights into both the pros and cons of offering fixed fees at a law firm
- And much more…
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FAQs
What does “fixed fee” mean for a lawyer?
Fixed fee billing is a form of value-based billing. Rather than bill clients solely based on the time spent on their case, fixed fees take a broader look at the overall value that a legal service offers.
Why do some firms prefer a fee structure other than an hourly rate?
Alternative fee structures—such as flat or fixed-fee billing—provide more transparency, predictability, and efficiency when compared to the more traditional billable hour model, which can create price uncertainties for clients.
What is the difference between an hourly bill and a fixed fee bill?
Hourly billing is based primarily on the amount of time that a lawyer spends on a particular case. A fixed fee bill is based on a set amount, determined by the law firm, which reflects the overall value of the work being delivered.
The Legal Trends Report provides information on the most important issues faced within the legal profession. By analyzing aggregated and anonymized data from tens of thousands of legal professionals in the US, supported by extensive survey research, the report offers unique insights into law firm efficiencies, hourly rates, and other key metrics for success.