Many law firms assume that transitioning to flat fees is just about crunching numbers—taking your hourly rate, figuring out an average case length, and adjusting your billing model. But that’s the wrong way to go about it.
Flat fees, when done right, require a complete shift in mindset. You’re not just changing how you charge; you’re transforming your approach from offering a service to delivering a product. This shift requires optimizing your processes, improving efficiency, and focusing on value for both your firm and your clients.
Here’s how to successfully transition to flat fees by changing your mindset and operations.
This post was developed with content from a Financially Legal episode with law firm owner, Elise Buie and consultant, John Grant of Agile Attorney. See the Financially Legal home for the full episode.
1. Shift Your Mindset: Efficiency First
Before diving into flat fees, focus on improving your law firm's internal processes. Start by streamlining your workflows, reducing waiting times, and eliminating unnecessary steps. Your goal should be to handle cases more efficiently without sacrificing quality. The better you become at optimizing processes, the less sense it will make to bill hourly.
As John Grant from Agile Attorney Consulting points out, flat fees work best when you’re already efficient. Once you’ve optimized your workflows and the hours required to complete a task have significantly dropped, that’s when flat fees become profitable and the hourly model often doesn't make sense anymore.
2. Start Small: Flat Fee Phases
Instead of rolling out flat fees across the board, start by offering them for predictable phases of cases. For instance, Elise Buie’s firm began with estate planning and specific stages of family law, where the work was more predictable. This phased approach allows you to test the waters without taking on too much risk.
By breaking cases into clear phases, you can control the scope and prevent the “creep” that often leads to unexpected extra work. Set clear boundaries for what’s included in each flat fee and communicate these upfront to your clients.
3. Use Data to Set and Adjust Fees
Data is your best friend when transitioning to flat fees. Use your practice management software to track time, billables, and non-billables. This will help you set accurate pricing based on how long different types of cases or phases typically take. Once you have this data, you can price your flat fees not just on time but on the value of the work you provide.
Buie discovered hundreds of thousands of dollars in lost non-billable work by analyzing the data at her firm. Having this insight lets you refine pricing and make informed decisions on where flat fees make sense.
4. Prioritize Client Experience
Flat fees offer predictability for clients, but to make the most of this model, keep clients engaged throughout the process. Provide them with clear expectations of what the flat fee covers and where clients are in the process. John Grant suggests treating this as a “Domino's Pizza Tracker” for legal services. Clients feel reassured when they know what’s happening and what’s coming next.
5. Iterate and Optimize
Flat fees aren’t an all-or-nothing switch. Continue to offer hourly billing for more complex or unpredictable cases while expanding flat fee options where efficiency is highest. As your processes improve, you’ll gather more data and refine your approach. The key is constant iteration: optimize your workflows, track your results, and adjust your pricing based on both efficiency and client value.
Ready to transition to flat fees? Don't start by coming up with your fee structure. Start by reviewing your processes and making them more efficient. As your cases become streamlined, you’ll see where flat fees can benefit both your clients and your law firm.
