A Note from Shireen Hilal
I wrote this article because I kept hearing some version of the same frustration from law firm leaders: they know hourly billing has problems, but most of the advice around alternative fees is either too abstract or threatens profitability.
Hourly billing has survived this long because it lets firms move quickly without forcing harder conversations about scope, expectations, value, staffing, and risk. But that ease costs firms and clients alike: vague engagement letters, discounts, and write-offs.
In the article, I walk through how firms can identify what clients are really paying for beyond time - e.g., speed, a clearer process, better reporting, more predictability, etc. From there, I share several ways to turn those strengths into pricing models clients can understand.
One takeaway no matter what model you try: don’t start with the most complicated matter or the most skeptical client. Pick a proving ground where your team already knows the work, the client trusts you, and the scope is clear enough to price with confidence. Then define what’s included, explain why the structure fits the work, track profitability, and debrief before you expand it.
We help law firm leaders with increasing revenue and profitability, including revamping pricing models and proposals. If you are rethinking your pricing model, testing alternative fees, or trying to understand why clients keep pushing back on bills, I’m happy to be a sounding board. Meanwhile, the full Law360 article is below.
As Published in Law360
This isn't another "death of the billable hour" think piece. That debate is tired, and most firms aren't sticking with hourly billing because they believe it works well. They keep it because it's easy. It avoids hard conversations about value and allows them to move fast without defining scope, setting expectations and rethinking default processes.
But that ease may be costing you and your clients.
It leads to behaviors that chip away at your positioning and profitability: setting hourly rates to feel palatable for well-heeled clients with room for quiet, recurring discounts; sending vague engagement letters with rate matrices that include names of attorneys your clients don't know; proactively hacking junior hours off the bill before clients complain; writing off more time when clients raise a brow; and, slipping zero-explanation increases into generic year-end letters.
None of this really reflects value; it's driven by habit, and possibly fear.
But worse, hourly billing shifts all the risk to your clients. You're the expert, but they carry the uncertainty of how long projects will take you, what's in or out of scope, and the total cost. That dynamic erodes trust before the work even begins.
Meanwhile, as all firms know, the market has shifted. Budgets remain tight[1] and legal work is gaining efficiency thanks to AI and automation.[2] Not only does in-house counsel expect you to pass on new efficiencies, but if your pricing model is still tied to time, every gain in efficiency will shrink your revenue.
That's the trap: If you're still pricing by the hour, you're in the labor business. But are you a staffing firm or a law firm? Your value isn't time; it's insight and results.
There are plenty of ways to get started with alternative fee pricing, but the most common formula seems to be — you guessed it — taking the average number of hours a firm thinks an engagement will take times usual hourly rates. While "time spent" should be one input, this article lays out a sharper path forward, including:
- Explaining how firms can identify the differentiators that clients value;
- Showing how to translate those strengths into pricing power by using structure to make your value visible and credible;
- Walking through real-world pricing models, with examples across different types of work; and
- Offering guidance on how to start testing these models inside your firm.
What Clients Pay For: Your Value Beyond Hours Worked
You can't price confidently until you define value, and "legal expertise" is just the floor. But most firms stop there or, when asked what makes them different, say some version of "our service." That's not only vague; it's the same thing everyone else says.
When you do the work to dig into what actually sets you apart and know your strengths, you can structure pricing models that put value up front. So how do you identify those qualities? Start with client feedback, but also ask better questions. Satisfaction surveys with 1 to 5 ratings won't tell you what you need to know.
Here is a starting point for questions your firm can use in client debriefs:
- To understand why they chose you: Why did you pick our firm? Was there a moment or factor that made you feel confident we were the right fit? If you spoke with other firms, how did their approach differ?
- To pinpoint real differentiators: What pleasantly surprised you about working with us? What's something we did better than others, even if it seems small?
- To define how they experience value: What made this feel like a good investment? How do you justify legal spend internally, and how do we help with that?
- To surface hidden friction: Was there any point where you felt unclear, slowed down or unsure what was coming next? What could we have explained better or earlier?
- To test future value and pricing elasticity: Would it be helpful if we offered [faster turnaround/direct partner access/more reporting]? What would that be worth to you?
- Also look internally and ask your team: Where do we consistently win? Are there types of matters or clients we land without discounting or pitch gymnastics? What feels easy for us but isn't for others (e.g., delivering calm in crisis, fast turnaround, C-suite ready summaries, etc.)?
This is where pricing power lives — the specific ways you show up differently. The next step is to name those strengths and understand how firms translate them into premium pricing instead of hiding them behind generic seniority-based rate structures.
Below are six common differentiators with examples of how smart firms use them to anchor premium fees.[3]
Speed and Access
Timely responses are expected, but some matters require faster and more flexible answers because waiting may change the outcome or quell a client's (well-founded) anxiety.
Example: A food brand gets reports of potential contamination tied to one of its products and early signs point to consumer illnesses. The in-house legal team needs immediate support navigating recall protocols, coordinating with the U.S. Food and Drug Administration, and preparing external messaging to retailers and the public.
A firm that can activate all avenues that same day limits exposure, protects consumer safety and helps the client take control of the narrative.
Strategic Judgment
Some attorneys are keenly aware of the business and second-order consequences of a decision and are therefore able to frame broader-ranging advice than their peers.
Example: Employment law firms asked how to handle employee terminations are expected to outline the legal risks, but a select few are able to also help the client consider PR fallout, internal morale or team dynamics, and timing, and then structure an exit plan accordingly.
Senior-Level Execution
Every firm promises partner oversight and, yes, clients already pay more for senior talent. But some firms differentiate on the model itself with undiluted precision from start to finish.
Example: A white collar criminal law boutique staffed exclusively by former federal prosecutors doesn't have junior associates. Their executive clients deal exclusively with experts who have run these cases on the government side, know the playbook, and can get ahead of reputational and criminal exposure in real time.
Clear, Repeatable Methodology
Some firms bring processes that add clear structure to their legal skill. Whether it's a proprietary framework, playbook or analysis model, the right methodology shows clients you've done this before, can predict what's coming next and will guide the matter with clarity through a defined path.
Example: A litigation powerhouse creates their own early case assessment report including
timing, risk scoring and settlement benchmark analysis, giving general counsel visibility and decision points upfront. Compare that to the usual, "let's see where discovery takes us" approach.
Market Position and Brand Trust
Some firms command attention with reputation and history, and there are clients who will pay more for a firm whose involvement alone signals gravitas.
Example: A fintech startup navigating a regulatory inquiry chooses a firm known for publishing the leading commentary on crypto compliance, not because they're cheaper, but because their name carries weight with the agency involved.
Operational Clarity
Especially for high-volume work that is consistently touched by clients, an excellent process and frictionless service that reduces ambiguity and prevents fire drills is worth a premium.
Example: A real estate investor juggling multiple closings hires a firm that delivers status summaries every Monday morning and maintains a real-time dashboard for clients, keeping deals on track and decision-makers informed.
Alternative Pricing Models That Align With Value
Once you've done the work to identify what sets your firm apart, the next step is framing your value in a way that means something to your client. Hourly billing rarely does that; it doesn't even tell clients what something costs, let alone what it's worth.
Most firms worry that changing how they price will put margins at risk. But if you've identified and sharpened your differentiators, you're pricing from a position of strength. The key is to translate that value into a structure clients recognize: outcome-driven, practical and aligned with the trust they've already placed in you.
Below are five tried-and-true, but underutilized, models as a starting point. The model you choose is less about math and more about trust. It says: We know what this work involves, we've done it before and we're willing to put structure behind that certainty.
Outcome-Based
What it is: The fee, or a portion of it, is tied to a defined result, whether monetary, regulatory or strategic; used frequently for plaintiff-side litigation matters but ignored more broadly.
Why firms like it: It creates upside and demonstrates confidence in results. Why clients like it: It links spend directly to success and reduces perceived risk.
Example: A white collar boutique representing a chief financial officer in a U.S. Securities and Exchange Commission investigation ties a portion of its fee to outcome. If the client avoids charges, the firm earns a success premium. For the client, the firm's incentives align with theirs: get ahead of exposure and avoid escalation. For the firm, it rewards strategic judgment and early closure, not just hours logged.
Strategic Retainers — Not Prepaid Hours
What it is: A fixed monthly fee that covers access to guidance and ongoing legal support.
Why firms like it: predictable revenue, easy billing with no write-offs, and a foothold to event-driven work given the strong ongoing relationship.
Why clients like it: easy to budget, access to judgment as needed and no nickel-and-diming.
Example: A startup healthcare company pays a monthly retainer to a boutique firm for day to-day legal support including commercial contracts, employment issues and early compliance questions. The client gets seamless support from a firm that learns their business, and the firm avoids discount pressure and becomes embedded in the client's decision-making.
Tiered and Options-Based Pricing
What it is: Clients choose from multiple levels of service, each with clear deliverables and pricing.
Why firms like it: It prevents race-to-the-bottom pricing and scope creep.
Why clients like it: It gives control over spend and clarity about what's included and what's not.
Example: A firm offers three tiers of trademark services: (1) Basic: filing only; (2) Standard: filing and one round of U.S. Patent and Trademark Office response; (3) Premium: filing, unlimited USPTO responses and quarterly monitoring. Clients stop negotiating line items and start choosing value levels, while the firm anchors pricing, upsells strategically and avoids endless customization for every proposal.
Phase- or Milestone-Based Pricing
What it is: Fees are tied to specific stages or deliverables within the matter. Why firms like it: It improves scoping accuracy and reduces pricing disputes. Why clients like it: It makes large matters feel manageable, with fewer billing surprises.
Example: A litigation team structures its pricing around pretrial phases, including flat fees for threshold motions and discovery pricing in tiers depending on volume of documents, witnesses and expert reports. This model avoids open-ended hourly estimates and gives clients clear spend checkpoints.
Risk Collar or Performance Band Pricing
What it is: Collar or performance band pricing is a sliding scale where the final fee depends on the result within agreed-upon parameters.
Why firms like it: It encourages efficiency without giving up all upside.
Why clients like it: They pay less if things don't go as planned, but they're willing to pay more if the outcome exceeds expectations.
Example: A firm defending a patent case structures a fee with a collar: If the case resolves for under $250,000 in fees, the firm gets a 10% bonus. If it goes over $400,000, the client gets a 10% discount. Between $250,000-$400,000, standard fees apply. This gives both sides predictability and alignment. The client isn't exposed to runaway costs, but the firm is rewarded for efficiency and favorable resolution.
From Idea to Action: A Tactical Road Map
So how can your firm get started?
- Pick the right proving ground: Don't start with the most complex client or matter. Choose a matter type where your firm delivers repeatedly with confidence or an existing client who knows your value and is open to new structures.
- Scope tightly and set the terms upfront: Be surgical. Define what's included, how the work will unfold, etc. Avoid fuzzy scope that leads to overwork or surprises; this is a test, not a free-for-all. Share the structure with the client and explain why it fits: timing, predictability, visibility, whatever the angle.
- Debrief and iterate: Once the work is complete, ask what landed well and what didn't. Track profitability. Note what your team struggled to scope. Adjust. Then apply it again — but better.
You don't need a formal pricing committee to get started. You need one team willing to try. Get the win, then scale.
Conclusion
When pricing is vague, it signals the work might be too. Alternative fee models are how you turn your strengths into structure, and structure into trust.
You don't need to overhaul everything overnight, but don't wait. Every time you fall back on hourly billing out of habit, you train clients to ask for discounts because they're skeptical of your efficiency and value, and give your competitors a wide-open lane to show up differently. There's no better time to get started, other than yesterday.
Shireen Hilal is the chief executive officer at Maior Strategic Consulting.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Thompson Reuters, Legal Departments Meet Budget Challenges with Strategic Spend Management, https://legal.thomsonreuters.com/blog/legal-departments-meet-budget challenges-with-strategic-spend-management/#:~:text=Legal%20departments%20are%20doubling% 20down,with%20stable%20or%20reduced%20headcount.
[2] Thompson Reuters, 2025 Report on the State of the US Legal Market, 14-
16. https://www.thomsonreuters.com/en-us/posts/wp
content/uploads/sites/20/2025/01/State-of-the-US-Legal-Market-Report-2025.pdf.
[3] But first, two notes: (1) This exercise should also help you create more resonant marketing collateral that move beyond the usual platitudes and generic value statements. (2) If you are still struggling to find your firm's differentiators after going through this exercise, cost efficiency may be your advantage, and that means lower prices and high volume will be your best avenue to increasing top-line revenue.
