The Truth About Hourly Billing: A Ridiculous Tradition that Must End

For more great articles and FREE attorney resources visit us:


If you are wondering how lawyers get clients you would probably never think about billing as a competitive advantage.  It’s time to think again.

The majority of my time is spent working with lawyers.  Every one of the lawyers who come to me wants to provide great service to their clients at a fair fee.  They want to make a great living and live a great life®.

Yet so many of these well-intentioned professionals embrace a fee model that is antithetical to building a great relationship with their clients and antithetical to allowing professional practitioners to make a great living and live a great life®.

I’m talking about hourly billing.

I know all the reasons you feel you need to bill by the hour.  At the top of the list is the fact that everyone else is doing it.  Also on the list is the tacit acceptance of this methodology by clients.  Finally, on the list is your ability to invest your time in thoroughly educating yourself on the facts and background of the matter and be compensated for doing so.

None of those reasons is good enough to continue this practice.

I teach my clients (lawyers and other professionals) a value based billing methodology that is today, a competitive advantage.

This methodology begins with a demonstration of the value you provide to the client.  This allows you to frame the discussion around improving the client’s situation and away from the work it takes to achieve that outcome.

Think about that for a moment.

Would you pay the manufacturer of an airplane for the hours it took to assemble it?  This would mean the first flight on a 747 would cost $14 million per passenger.  And then after the first group of people paid the plane off in full, the next group of people would be asked to pay for the hours involved in manufacturing the airplane again.  And then the next group.  And so on.

This is a ridiculous scenario.

When you board a 747, you are paying to get from point A to point B.  That’s why you are paying the fee charged by the airline.

As a professional services provider, people are coming to you to improve their situation.  Hopefully, you have helped other people improve similar situations.  Your experience, your skill, your talent, have value beyond the number of hours you invest in a client’s matter.

Why not bill a fair fee (fair to you and to the client) based upon a number of factors the client considers critically important?

If you want to learn more about these factors, listen to the podcast I recorded this past week.  You can find it by following the link below.

Secrets of Value Based Billing

You don’t have to agree with me on this issue.  Not everybody will.

The truth is, enough people agree with me on this issue that we have lawyers in just about every practice area using value based billing right now.

This is one of the reasons these lawyers get clients.

So if you’re not a client, I hope you don’t agree with us.  Because right now, in your neighborhood, in your practice area, there IS someone who gets this.  There is someone who has a value based methodology for setting fees.

That person is competing with you right now.  And he is probably eating your lunch.