“A flat fee is not an alternative fee, it is a budget!” Come again?

When I heard this statement from a keynote speaker, I felt the urge to stop, drop and role. I was fired up, smoke coming out of my ears!

The statement fails utterly to recognize the huge differences that can follow from a cost-plus operation by law firms where everything spent is house money (the corporate client’s) to a my-own-dime is on the line of a flat fee. Assuming the law firm believes the set fee is fair and assuming the firm understands that some fee arrangements bring profit and others loss, a flat fee could (and should) significantly alter many aspects of how they staff and work matters. A flat fee is a dramatic alternative to hourly billing and its effect should go far beyond that of a budget. That comment burned me up.