Many professional firms price advisory work by the hour because it is how the firm records time and how clients expect to be billed. It is simple, but it has costs that are easy to overlook, and a clearly scoped fee often serves both the firm and the client better.
What is wrong with the hourly rate
- It rewards slowness. The firm that gets better and faster at the work earns less for the same result.
- It makes cost unpredictable. Clients cannot plan, so they hold back from asking for advice they would value.
- It focuses the conversation on time. Clients ask what the hours are spent on instead of what the work achieves.
- It caps income at the hours available. In a firm where senior time is the constraint, this limits growth.
What a scoped fee needs
A fixed or scoped fee is only as good as the scope behind it. Before offering one, the firm needs to:
- define the outcome the client wants and how it will be recognised;
- list what is included, and just as importantly what is not;
- estimate the effort from the firm’s own records, with a sensible allowance for risk;
- agree how changes to scope are handled and priced; and
- review the result after the first few jobs, and adjust.
Where the hourly rate still fits
Some work cannot be scoped in advance, and for that, hourly rates or a capped estimate are reasonable. Some firms also work under professional rules that affect how fees are set and communicated, and those rules come first. The point is not that one method is always right, but that the choice should be deliberate.
Hexarch’s work on services and pricing helps firms design clear offers and decide how to price them. If you would like to talk it through, get in touch.