By -

Legal bill shock could become a thing of the past, if a recent trend of clients demanding fixed-fee pricing from small law firms and conveyancers continues.

A survey of 134 small law firms across Australia by Smokeball in February 2021 revealed almost half (43 per cent) of small firms and conveyancers had seen an increase in requests for fixed-fee pricing over the past year.

Firms in NSW reported a 50 per cent increase in requests for fixed fees. Most lawyers quoted market forces and a need for bill certainty as reasons for the trend. But firms also said there were reasons for lawyers to opt for fixed fees as a preference to timesheet billing: there was a rising unwillingness among clients to pay large legal fees, even for work that has been completed.

Firms noted one of the difficulties of moving to fixed-fee arrangements came in managing profitability through the process. A quarter (24 per cent) of NSW firms reported that matters often took more time than they felt they could bill in a fixed-fee arrangement. 

Firms also reported clients tended to shop around for cheaper rates that may not reflect the work done.

“The most important thing … is that one price doesn’t fit all so you need to build a scope for your fixed fee prices that can be moved up or down depending on the client’s needs, complexity, timing and where the matter may go,” said Clarissa Rayward, Director and Creator of the Brisbane Family Law Centre. 

More than half of firms surveyed (53 per cent) expected an increase in fixed-fee pricing in the next year. Only 12 per cent did not expect an increase, and 35 per cent were unsure.